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World Bank Loans Brazil US$ 7 Bi for Infrastructure and the Poor

Basic sanitation in Brazil Less large loans for the federal government and more small and medium loans for state governments, with emphasis on investment in infrastructure and on the reduction of inequality. This is the strategy that should guide the US$ 7 billion loan that the World Bank (IBRD) should grant Brazil up to 2011.

The contract had its guidelines approved last week by the Executive Board at the Bank, in United States capital Washington D.C.

According to the IBRD, 70% of the financing should be turned to states. The projects to have priority will be those considered "daring", but with "modest financial volume".

The preference will be for projects that contribute to the improvement of quality of public spending (with stimulation to investment in infrastructure and education), the reduction of income inequality between the Northeast and the rest of Brazil and the fight against deforestation in the Amazon.

These objectives, according to the document, have already been defined by the Federal Government in actions like the Growth Acceleration Programme (PAC). According to the IBRD, the next financing should focus on the current government agenda of priorities, instead of trying to identify new needs.

The IBRD has also agreed to export to other developing nations experiences that proved successful in Brazil. The document mentions fiscal federalism (the sharing of taxes between the Union, states and cities), biofuels and clean energy, the fight against Aids and income transfer programs as examples of actions that may be applied to other countries.

The document, pointed out the World Bank, was elaborated based on enquiries with representatives of the Federal Government, states, cities, the Legislative Power, environmental and social movements as well as the private sector.

The bank's Executive Board has already approved the first loans to Brazil under the new criteria. In all, the loans total US$ 1.6 billion to two states and to the Ministry of Health.

One of the loans granted was for the Partnership Program for the Development of Minas Gerais, which received US$ 976 million to promote the actions for growth of the state and for reduction of poverty. The other, for the value of 550 million reais (US$ 333 million dollars), was for improvement of the train and subway system in the metropolitan region of São Paulo.

The request for the loan for the Ministry of Health approved by the bank was for the Expansion Project for the Family Health Program, to receive US$ 84 million for the expansion of medical services to people with disabilities who find access to hospitals difficult and to reduce infant mortality.

ABr

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