The FINANCIAL — Build capacities to achieve safer communities, improve the performance of secondary-school students and generate jobs for youth are the central themes of the World Bank Group’s (WBG) new partnership strategy with El Salvador. The work program for the 2016-2019 period will also support the country increase its population’s access to the financial system, promote public spending efficiency and reinforce its capacity to confront environmental and natural disaster risks.
The strategy, also called Country Partnership Framework, stands on two pillars: establish the foundation for the promotion of inclusive growth and foster sustainability and resilience. On this basis, one of the priorities of this strategy is to contribute to a reduction in crime and violence, whose economic cost is estimated at 11 percent of the country’s Gross Domestic Product. To this end, the WBG will support prevention efforts in municipalities with high crime and violence rates, as well as among youngsters, women and children, especially, according to the World Bank.
The new strategy also seeks to:
Improve the performance of secondary-school students and build capacities among youth in order to facilitate their entrance into the labor market. Currently, more than 60 percent of Salvadoran youth aged between 25 and 29 have not completed secondary education, which companies consider one of the most important aspects in terms of fostering an adequate business climate. Moreover, barely two thirds of all ninth-grade students advance to tenth grade.
Promote financial inclusion, which is currently low, especially among the poorest 40 percent of the population. According to WBG studies, barely 14 percent of all Salvadorans have an account at a formal banking institution, below the 39 percent average for Latin America. To this end, the International Financial Corporation (IFC) will facilitate access to credit among small- and medium-sized enterprises, as well as micro-enterprises.
Promote the efficiency of public spending via technical assistance and analytical work, as well as contribute to strengthen the institutional capacity to cope with adverse natural events.
The plan, which will provide continuity to the work undertaken to date by the World Bank Group in El Salvador, is aligned with the objectives of the Government’s Five-Year Plan, while supporting the main goals of our institution, that of eradicating extreme poverty and promoting shared prosperity,” said Fabrizio Zarcone, World Bank Representative in El Salvador.
The World Bank’s current portfolio in El Salvador includes technical assistance initiatives and five investment projects funded by the International Bank for Reconstruction and Development (IBRD) totaling US$290 million, aimed at improving income levels and employment opportunities among the most vulnerable; strengthening local government; increasing educational quality; reinforcing the public healthcare system; and improving fiscal management and public sector performance.
Moreover, the IFC’s portfolio of commitments in El Salvador totals US$130 million and focuses on strengthening the business sector by improving financial access among micro-, small- and medium-sized enterprises as well as contributing to improve El Salvador’s infrastructure, among other things. The Multilateral Agency for the Guarantee of Investments (MIGA) has granted US$150 million in guarantees to three active projects in the country, supporting investments in the financial and service sectors.