The World Bank is going to make its rule for disbursements to Brazilian social programs more flexible in an effort to help Brazil use World Bank funds more quickly.
The change would exempt Brazil from the World Bank's requirement of the Brazilian government having to put up the equivalent amount of money, or so-called counterpart funding, as the bank does for projects to go ahead.
Spending cuts by President Luiz Inacio Lula da Silva's government meant that his government has not come up with enough counterpart funding for the World Bank to be able to disburse the full $2 billion it had earmarked for Brazil this fiscal year.
"This is a recognition of the efforts and of what was already achieved by the government and its commitment to economic growth," said David de Ferranti, World Bank Vice President for Latin America and the Caribbean.
The change will benefit key programs of Lula's government, such as its plan to boost the number of jobs for first-time job seekers.
Because of Brazil's tight budgets, it had used just $600 million of the World Bank's $2 billion, which was earmarked for Brazil to use during the bank's fiscal year that started in July last year and will end in June 2004.
"We believe there is an opportunity of increasing our help to the country to accelerate the programs," said Ferranti.
Ferranti met with Finance Minister Antonio Palocci on Thursday.
The World Bank has been a strong supporter of Lula's mix of market-friendly fiscal and monetary policies along with his drive to help Brazil's poor.
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