World Bank Assistance Strategy Projects Up To $240 Million To Nicaragua Over Five Years

The Board of Executive Directors of the World Bank Group discussed a new Country Partnership Strategy (CPS) for Nicaragua, with project and investment loans and credits by the International Development Association (IDA) concessional lending arm of the World Bank to assist the poorest countries and will total $240 million for five years from 2008 to 2012. 

“With a record of sound macroeconomic policy, Nicaragua has the potential and resources to grow its way out of poverty,” said Jane Armitage, Country Director for Nicaragua at the World Bank. “Through this new strategy, our aim is help Nicaragua build a stronger economy and improve social equity and opportunity for all.”

The new strategy is closely aligned to the Governments priorities and its evolving poverty reduction strategy structured around four strategic objectives which are: i) reactivating the economy, stimulating productivity and competitiveness; ii) human capital development – improving social equity and opportunity, iii) infrastructure and sustainable development; iv) strengthening governance and accountability by modernizing state institutions and promoting citizen participation.

Specifically, budgetary support and analytical work would further public sector modernization, improve the investment climate and ensure better targeting and quality of social sector social spending.  Additionally, new investment operations are planned in urban and rural water and sanitation programs, public sector management, land administration and rural roads, and small and medium enterprise (SME) development.

“Our aim is to make sure that Nicaragua receives continued strong donor support from the International Development Association and the donor community,” said Joseph Owen, World Bank Country Manager in Nicaragua. “The Bank also intends to support Nicaragua to cope with the emergency reconstruction needs of the north Atlantic coast in the aftermath of hurricane Felix with a credit of $17 million.  I am confident that the new partnership strategy will help to reduce poverty and create wealth that is broadly shared by all citizens.”

The Bank currently has a total of 11 projects in Nicaragua, for US$ 214.6 million total net commitments, with $4 million in support by the Global Environment Facility.

The new strategy will also be supported by the International Finance Corporation (IFC), the Bank’s private sector arm.  IFC’s strategy aims to help accelerate private sector development and help facilitate Nicaraguans to take advantage of globalization and free trade agreements, supporting projects at both the regional and country levels. 

The news of this important announcement comes two weeks after the Executive Board of Directors and the new President Robert Zoellick of the World Bank Group (WBG) took another crucial step with the decision to contribute a record sum of US$3.5 billion of its own income to grants and credits for the world’s poorest countries while completing the 15th replenishment of IDA. 

This contribution is more than double the US$1.5 billion pledged by the WBG for IDA 14 in 2005.  In Latin America, recipient countries include Bolivia, Guyana, Haiti, Honduras and Nicaragua.

 
SOURCE: WORLD BANK

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