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Brazil to target poorest regions with World Bank loan

In June this year, Brazil’s President Dilma Rousseff launched the new ‘Brazil Without Poverty/Misery’ welfare initiative, aimed at improving the lives of 16 million of the country’s poorest people. Yesterday, the World Bank Group announced the granting of an 8 billion dollar loan (July 2011-June 2015) towards this poverty eradication programme.

Approved as part of the World Bank’s Country Partnership Strategy (CPS), the loan will particularly bolster support for families in the Northeast, Brazil’s poorest region. 59% of the country’s extreme poor live here and money will be targeted on reducing the gap between the Northeast and other regions of the country. This will include spending on sewage treatment services (to widen access to 75% of households) and encouraging investments in transport and clean energy. Funding from the loan will also go into improving services for low-income families. The government plans to make pre-school places available to at least 85% of the poorest two-fifths of the population. It also aims to increase access to the state family health care system and affordable housing.

While 5.8 billion dollars will come from the International Bank for Reconstruction and Development in the form of subsidized loans to Brazil’s federal, state and municipal governments, 2 billion dollars in 2012-13 will come from the private sector via the International Finance Corporation (IFC). The involvement of the IFC is seen as a way to improve the efficiency of investments, by encouraging public-private partnerships and better planning and procurement at state and municipal level. The IFC’s manager in Brazil said “our focus on innovation aims to help raise the country’s productivity and competitiveness levels”.

The CPS hopes that knowledge and experience gained from the development work will be made available to other developing countries, as has been the case with Brazil’s successful poverty-reduction strategies in the past. For example, other countries have adopted family grant programmes similar to Brazil’s ‘Bolsa Familia’, which is credited with raising 20 million Brazilians out of extreme poverty.

The World Bank’s CPS for Brazil also aims to encourage development changes which address environmental issues. Some of the money will be aimed at managing natural resources and preparation for climate events. Funding will go to support the reduction of Brazil’s carbon footprint by reducing emissions from agriculture by at least 100 million metric tonnes per year. And areas under environmental protection will be expanded by 15 million hectares.

Overall, the significant support being offered through the CPS is testimony to Brazil’s successes in poverty reduction to-date and of the government’s desire to “push these efforts still further and eradicate extreme poverty”. 

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