World Bank provides $400 million in response to pandemic

By Pittaluga Abogados

On June 25, 2020, the World Bank Board of Directors approved a budget support operation for $400 million to support the Uruguayan economy. At a juncture when public resources are targeted to cover the cost of the ongoing Covid-19 pandemic, this World Bank funding will allow Uruguay to sustain policies geared to the protection of families, workers and businesses more affected by the economic and social impact of the pandemic, and will contribute to set the stage for a sustainable economic recovery.

“This support from the World Bank is a clear signal of their trust in the relevance of fiscal, social and credit-access measures taken by our country in response to this crisis. Having financial instruments such as these allows us to implement policies critical to mitigate the economic and social consequences of this pandemic, and foster the recovery of the Uruguayan economy,” said Azucena Arbeleche, Minister of Economy and Finance of Uruguay.

This loan provides an answer to the emergency, as it supports the measures adopted by the government to cushion the strong social and economic consequences of the pandemic, with a focus on the most vulnerable homes and businesses. In particular, it supports social programs, such as the extension of Social Uruguay Card (Tarjeta Uruguay Social) AFAM-PE and food baskets, and those actions geared to the protection of workers in high-impact sectors. It also supports temporary measures targeted to improving access of micro, small and medium-sized enterprises to credit.

“Uruguay is determined to reduce the impact of this pandemic and foster an economic rebound and at the World Bank we accompany these initiatives. We highlight the commitment of the Uruguayan government to protect the most vulnerable from the impact of this crisis and, at the same time, to plan and adopt appropriate policies to return to the path of inclusive and sustainable economic growth,” said Jordan Schwartz, World Bank Director for the Southern Cone.

In the medium term, the funding will support the post-pandemic economic recovery efforts, in particular, measures such as facilitating the creation of new enterprises, consolidating non-essential spending in response to the crisis and strengthening institutional capacity in emergency risk management to improve the business climate and contribute to the transformation of the economic model to make it more sustainable and resilient to economic, environmental and health shocks.