Public Finance and Competitiveness Development Policy Loan with Deferred Drawdown Option

closed

The objectives of the Public Finance and Competitiveness Development Policy Loan with Deferred Draw-Dawn Option (DPL-DDO) Program for Costa Rica are to: (i) strengthen public finances and their transparency by enhancing the efficiency of revenue generation and results-based management of expenditures; and (ii) improve competitiveness by enhancing secondary education attainment, facilitating market entry in the telecommunications and insurance sectors, and strengthening the legal framework pertaining to intellectual property rights. This Public Finance and Competitiveness DPL-DDO, together with a parallel loan from the Inter-American Development Bank (IDB) approved on December 17, 2008, and a precautionary stand-by arrangement, are integral to Costa Rica's strategy to manage financing risks associated with the crisis on different fronts. Similarly, the precautionary stand-by arrangement provides a contingent line of liquidity to support the Central Bank's international reserves if needed. Finally, the DPL-DDO will provide a contingent line of credit to the Ministry of Finance in case a worsening in the economic environment makes the financing of the deficit more difficult than anticipated.