Costa Rica is on its way to approving a World Bank credit line that could save the country as much as $70,000 a day, the government said Wednesday.
The World Bank’s $500 million development policy loan passed first debate in the Legislative Assembly Tuesday, with approval from 42 of the 46 lawmakers present. The policy loan bill is expected to pass in the second, final vote on Thursday.
“The political will is clear from all the parties to seek urgent solutions for the country,” Marco Vargas, minister of the presidency, said in a statement.
He explained that the savings were calculated by President Laura Chinchilla’s economic advisers based on the new resources the credit line would free up “to achieve important progress for the country,” according to the statement.
The World Bank approved the loan in April 2009, authorizing its International Bank for Reconstruction and Development to disburse $500 million in one tranche, payable in 30 years, including a five-year grace period.
The loan is meant to bolster Costa Rica’s public finances and competitiveness “with respect to infrastructure shortcomings, skills gaps and excessive red tape,” the World Bank said in a statement to publicize its approval.
Just as global economies were buckling last year, in February 2009, the World Bank’s vice president for Latin America, Pamela Cox, visited this Central American country and announced plans to offer the loan “to give help to the government in this difficult time,” she said (TT Daily News, Feb. 12, 2009).
However, it has taken the legislature until now to give the funds the go-ahead. The offer was met with some skepticism.
“We’re swiping a credit card we can’t afford to pay,” Luis Barrantes, then legislator with the Libertarian Movement Party, said at the time of Cox’s visit.
In an interview with The Tico Times, Cox stressed that the World Bank does not add conditions on development policy loans, other than the promise from the country to repay and not misuse the money.