WB/Dominican Republic: More support to bolster Public Financial Management
WASHINGTON, November 4,2015. —The World Bank’s Board of Executive Directors today approved a US$60million Development Policy Loan (DPL) to the Dominican Republic for its effortsto promote inclusive growth by strengthening management of public expendituresand enhancing the transparency and monitoring of government operations.
“This financingsupports the Government’s efforts to improve public financial management andstrengthen its results-based use of public funds,” said Magin Diaz, ViceMinister of Public Credit. “These efforts will lead to more efficient deliveryof public services for the poorest by allocating and managing public resourcesmore strategically”.
The Dominican Republicregistered the highest growth rate in Latin America and the Caribbean in 2014(7.3%), recovering from the slowdown in 2011 and 2012. This has helped boostemployment and reduce poverty. A total of 169,000 jobs were created betweenOctober 2013 and 2014. The current account deficit is expected to shrink below2 percent of GDP in 2015. However, macroeconomic and fiscal forecasts estimatethe public sector debt stock to remain between 47.4 and 51.2 percent of GDP in2018.
“We are encouraged bythe Dominican authorities’ commitment to improve service delivery to thepoorest and most vulnerable,” said Sophie Sirtaine, World Bank Country Directorfor the Caribbean. "The government’s reforms to manage its public financesmore effectively are a clear sign of this commitment, and the followingmeasures will be important for consolidating the gains achieved in recentyears."
The operation isaligned with the Dominican Republic’s National Development Strategy 2030.Specifically, the main reforms to be achieved by this DPL are:
Improving theflexibility and transparency of public debt management: This means strengtheningthe sustainability of public finances and reducing overall public debt throughimproved coordination between institutions that issue public debt, and lawsthat enable renegotiation of existing debt under more favorable conditions.
Strengthening planning,budgeting, implementation, monitoring and evaluation of public expenditures:This includes efforts to improve service delivery in the health sector throughthe implementation of results based financing to benefit the poorest and theuninsured. A national system for monitoring and evaluation of public programs,and the establishment of an e-Procurement portal for all public procurementprocesses, will also help improve efficiency in public financial management.
Enhancing transparencyand monitoring of government operations: Improved accuracy and regularpublishing of validated poverty statistics and the establishment ofparticipatory monitoring mechanisms will help better monitor the use of publicfunds, including those allocated to the National Education Pact and tonon-profit organizations that play a key role in monitoring the delivery ofquality goods and services to the poorest.
The loan is a flexibleDevelopment Policy Loan from the International Bank for Reconstruction andDevelopment (IBRD), with fixed spread, customized repayment schedule and atotal repayment of 23 years, including a grace period of 11 years.