WASHINGTON, December 21, 2015 – The World Bank Board of Directors approved today two loans that will support public policies that promote the expansion of sustainable agriculture, education and other key sectors for social inclusion in Piauí, one of Brazil’s poorest states.
Together, the US$120 million Investment Project Finance (IPF) “Piauí Pillars of Growth and Social Inclusion” and the US$200 million Development Policy Loan (DPL) “Piauí Productive and Social Inclusion” will benefit the state’s rural poor by increasing and improving services in education, health, agriculture and water resources. The programs aim at generating higher incomes and improving standards of living for poor and vulnerable groups, especially poor farmers, incorporating gender and citizen-engagement considerations.
"These projects recognize the state’s efforts on the implementation of public policies that enhance social and economic inclusion, improve access to education and health, and help small and medium producers make the most of their lands through sustainable processes and with improved technical capacity," said Wellington Dias, governor of Piaui. These measures will not only promote economic growth, but will also build human capital, improve the educational level and the health services provided to the poor.""
Located in Brazil’s drought-prone Northeast, Piauí has significant natural resources and six million hectares of land suitable for high-value agriculture. However, it has very low social and economic indicators, including the third highest illiteracy rate in the country, and the highest income inequality among the Brazilian states.
Almost 40 percent of the rural population live with less than the monthly minimum wage. Although 90 percent of agricultural establishments in Piauí are family subsistence farms, they represent only 39 percent of the total farmed area, and are located mostly in semi-arid areas. Social programs such as the Bolsa Família conditional cash transfer directly benefits 49 percent of the State’s population.
Poor health conditions also contribute to the vicious cycle of poverty among Piauí’s most vulnerable groups. Child mortality rate is 20.4 per thousand in the state, while the national average is 14.4 per thousand.
“Through these projects, traditionally social excluded communities will be given opportunities to improve their standards of living,” explained Martin Raiser, World Bank Director for Brazil. “By offering better diagnosis and treatment of chronic diseases and improving their educational level, these populations will have a chance to become more economically active and finally leave poverty behind”.
Among the outcomes supported by the programs are:
- Improved performance of secondary education students in state public schools;
- Expanded coverage of public health services, especially for chronic and neglected diseases;
- Increased access of vulnerable groups to productive chains;
- Expanded access to natural resources management services, especially water resources and land regularization;
- Increased capacity for environmental, water resource and land management;
- Strengthened systematic monitoring of priority investments;
- Built the state capacity to improve water and land management as well as rural development; and
- Strengthened institutions for gender mainstreaming and channeling the citizens’ voice in strategic programs.
These loans from the International Bank for Reconstruction and Development (IBRD) to the State of Piauí are guaranteed by the Federative Republic of Brazil. They have a final maturity of 20 years, with a 3-year grace period for the “Piauí Productive and Social Inclusion” DPL and a 4-year grace period for the “Piauí Pillars of Growth and Social Inclusion” IPF.
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