Argentina: World Bank Continues Support

WASHINGTON, July 19, 2002-- The World Bank today expressed its continued support to Argentina as the country works through the reforms designed to restore growth.

The Bank expects disbursements could reach US$150 million over the next three months. This reflects a return to normal implementation conditions that were hampered by the imposition of the freeze of deposits at the end of 2001.

" Increasing disbursements under ongoing development projects will have multiple benefits," said Myrna Alexander, World Bank Director for Argentina, Chile, Paraguay and Uruguay. "Goods and services will be bought, mainly from local suppliers, the general population will benefit from project services, and the poor and needy will receive vital social assistance."

Members of the World Bank Executive Board were briefed yesterday by management on the overall process in Argentina and the present efforts of the Bank and the government of Argentina to overcome the present crisis.

While the International Monetary Fund (IMF) and Argentine authorities work to reach an agreement, there are encouraging improvements in the implementation of the Bank's on-going portfolio of investment loans. The undisbursed portions of these loans total almost US$ 1.3 billion, including the $100 million recently redirected to finance critical social emergency programs in health, education and community food programs.

"Bank officials are working with the Argentine authorities in key areas, such as the banking sector and corporate restructuring, and on the support that we could provide so that we are ready when an agreement with the Fund is reached," said Ms. Alexander. "The critical support of the IMF would permit the country to restore full access to the Bank's financial assistance including new loans."

An IMF agreement would permit expanded support for the social emergency program and also to advance on several already approved reform loans with pending releases, which total US$ 670 million. Subject to satisfactory compliance and a satisfactory macro-economic agreement, most of these funds could be available quickly.