'We expect that this transition programme will help consolidate the current economic recovery and set the basis for a longer-term programme by the new government,' said Axel van Trotsenburg, the World Bank's country director for Argentina, Chile, Paraguay and Uruguay. 'The proposed loan would strengthen Argentina's ability to resume growth and to improve the implementation of social programmes targeted to the poor.'
The loan will support the government's plan to retire federal and provincial quasi-monies, worth the equivalent of about Arg$7.8bn, as well as the continued deficit reduction efforts by the provinces.
'Eliminating quasi-monies,' said van Trotsenburg will help to reestablish a normal payment system based on the peso and thereby strengthen the central bank's ability to conduct monetary policy. It would also normalise federal-provincial fiscal relations, improve trade among the provinces and help [those] who had to accept payments in quasi-monies.'
It also supports the government's priority social assistance programmes such as Jefes de Hogar, school scholarships, conditional cash transfers and feeding programmes, and includes the adoption of measures to improve their efficiency and coordination across the country.
Also supported are schemes to ensure basic health services to the most vulnerable.
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