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 Published Monday, June 29, 2020 World
Bank approves
$300 million loan By the A.M. Costa Rica staff The World Bank announced on Friday the approval of a $300 million loan to the country to finance the economic crisis caused by the pandemic. The Washington, D.C.- based World Bank comprises two institutions: the International Bank for Reconstruction and Development (IBRD), and the International Development Association (IDA). This loan is financed by IBRD, with a term of 34.5 years, including a five-year grace period. Authorities did not mention the interest rate on the loan. "The mitigation measures, backed by our development policy loan, will contribute to the authorities' efforts to save jobs and to prevent people from falling into poverty during this difficult time," said Seynabou Sakho, director of the World Bank for Central America. According to Elían Villegas, Minister of Finance, the World Bank loan complements the spending made by the government during the pandemic. "We have made an effort to satisfy the health and social assistance needs of the population, although there is still a long way to go towards sustainable growth." According to the authorities, the money will be used to give cash support to small and medium-sized businesses, financing the tax reform, and improving the economy. In the economic area, green growth and low-carbon development would be supported, said the ministry in its statement. According to the ministry, the government responded to the pandemic by implementing containment measures, which caused a slowdown in the economy occurring in "a sharp contraction in the economy." In May, the World Bank approved a loan of $75 million to support the fishery sector, however, the ministry reported that money will be used to finance the expenses of the economic crisis. That $75.1 million for a term of 33.5 years, with a grace period of 6 years, was settled to finance fishing activity in the country. According to the bank's first statement on the loan, it was designed to help tuna fishermen and other independent fishermen sectors, while allowing the recovery of coastal fishing to improve employment opportunities for residents of those regions. The goal of the loan was to invest in a project to identify and take advantage of higher-value markets for the export of fishery and aquaculture products, in addition to improving the quality of the product for domestic consumption, said the World Bank in its statement. "Fisheries represent a vital source of jobs for many coastal communities and this project aims to capitalize on Costa Rica's marine resources in a sustainable way to boost economic growth and prosperity," said Daniel Carrasco, Executive Director of the National Institute of Fisheries and Aquaculture. The 24 coastal cantons that depend most on fishing are among the poorest in Costa Rica. In recent years, the over exploitation of fishery resources in these areas has led to an abrupt drop in the volume and size of the catch. The volume of fishing decreased by 45% between 2000 and 2015. Fishing and aquaculture generated $145.4 million in 2015, 14% less than in 2011, authorities said. -------------------------- Should the government ask for more loans to international banks? We would like to know your thoughts on this story. Send your comments to news@amcostarica.com |
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