04.12.2009, 09:09
WB Approves First Development Policy Loan to Belarus
OREANDA-NEWS. December 04, 2009. The World Bank Board of Executive Directors approved a US200 million Development Policy Loan (DPL) to the Republic of Belarus to support the Government’s economic program aimed at addressing the social impact of the financial crisis and advancing reforms to help enable a sustained economic recovery, reported the press-centre of World Bank.
The Board discussed the DPL in the context of a mid-term review of the World Bank Country Assistance Strategy for Belarus (2008-2011). The World Bank expanded the scope and size of its financial assistance planned under the Strategy and included budget support through the DPL in reflection of significant changes in the external environment and acceleration in the pace of structural reforms in Belarus.
“Belarus has established a good track record in the implementation of Bank Group activities to date. A window of opportunity has opened for the Bank to support deepened structural reforms in Belarus,” says Martin Raiser, Country Director for Belarus, Moldova and Ukraine. “We hope that the agreement reached with the authorities will also serve as a signal to private investors that Belarus is opening up.”
The Development Policy Loan supports a program of reforms built around two pillars. The first pillar aims to strengthen social assistance programs by making them more targeted to the poor, who are likely to be most affected by the impact of the global economic and financial crisis on the Belarussian economy. The second pillar supports the government’s liberalization program to promote private investment and job creation, including measures such as the inspections decree which would lift a significant burden from businesses, price liberalization measures (including the removal of restrictions of trade margins for most products), the gradual elimination of turnover taxes, and the preparation of key legislation to launch the privatization process.
“Belarus has started to ease the constraints on businesses in recent years, and this operation supports further steps in price liberalization, deregulation, and tax policy,” said Pablo Saavedra, Senior Economist and Task Team leader of the Development Policy Loan. “The crisis made these reforms more urgent, but also highlighted the need to deepen reforms to ensure a sustained recovery.”
The World Bank single-tranche loan has a maturity of 16 years including a 6 year grace period. The loan proceeds would be made available to the Borrower upon loan effectiveness.
Belarus joined the World Bank in 1992. Since then, the Bank’s lending commitments in Belarus totaled US643 million for 9 projects; about thirty national programs received grant financing totaling US 18 million. Belarus is currently using World Bank financing in 4 infrastructure projects.
The Board discussed the DPL in the context of a mid-term review of the World Bank Country Assistance Strategy for Belarus (2008-2011). The World Bank expanded the scope and size of its financial assistance planned under the Strategy and included budget support through the DPL in reflection of significant changes in the external environment and acceleration in the pace of structural reforms in Belarus.
“Belarus has established a good track record in the implementation of Bank Group activities to date. A window of opportunity has opened for the Bank to support deepened structural reforms in Belarus,” says Martin Raiser, Country Director for Belarus, Moldova and Ukraine. “We hope that the agreement reached with the authorities will also serve as a signal to private investors that Belarus is opening up.”
The Development Policy Loan supports a program of reforms built around two pillars. The first pillar aims to strengthen social assistance programs by making them more targeted to the poor, who are likely to be most affected by the impact of the global economic and financial crisis on the Belarussian economy. The second pillar supports the government’s liberalization program to promote private investment and job creation, including measures such as the inspections decree which would lift a significant burden from businesses, price liberalization measures (including the removal of restrictions of trade margins for most products), the gradual elimination of turnover taxes, and the preparation of key legislation to launch the privatization process.
“Belarus has started to ease the constraints on businesses in recent years, and this operation supports further steps in price liberalization, deregulation, and tax policy,” said Pablo Saavedra, Senior Economist and Task Team leader of the Development Policy Loan. “The crisis made these reforms more urgent, but also highlighted the need to deepen reforms to ensure a sustained recovery.”
The World Bank single-tranche loan has a maturity of 16 years including a 6 year grace period. The loan proceeds would be made available to the Borrower upon loan effectiveness.
Belarus joined the World Bank in 1992. Since then, the Bank’s lending commitments in Belarus totaled US643 million for 9 projects; about thirty national programs received grant financing totaling US 18 million. Belarus is currently using World Bank financing in 4 infrastructure projects.
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