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IFC Congress Participation Underscores Commitment to Municipal Development


Adriana Gomez
Phone:  (202) 458-5204

Fax:     (202) 974-4384

Email:
 agomez@ifc.org

Paul Melton

Phone: (202) 473-7349

Email:
pmelton@ifc.org


SANTA CRUZ, BOLIVIA, April 20, 2004- Over 400 municipal leaders have converged on Santa Cruz, Bolivia, for Experiencia América, the First Latin American Congress of City and Local Governments.

The congress, organized by the FLACMA (Federación Latinoamericana de Ciudades, Municipios, y Asociaciones) and co-sponsored by the International Finance Corporation's Latin America Small and Medium Enterprise Facility, provides a regional forum for exploring key issues facing municipal development-economic competitiveness, urban poverty, environmental sustainability, decentralization, and local autonomy.  The International Finance Corporation is the private sector arm of the World Bank Group.


In bringing together municipal leaders to exchange experiences and ideas, the Congress seeks to define policies and strategies for the region's development and foster closer coordination between municipal governments and international organizations.

The Congress provides an excellent venue for the IFC to promote its work with municipalities through the LAC SME Facility and the Municipal Fund. The LAC SME Facility's conference participation centers on its work on simplifying municipal business regulations.  Cumbersome administrative procedures disproportionately affect small and medium enterprises, limiting their growth and contribution to their countries' economies.  Establishing a new business in Honduras, for example, averages 80 days and costs 72 percent of GDP per capita.  In Colombia, the same process averages 60 days and costs almost 30% of GDP per capita.


In its plenary session, the Facility will present the results of its pilot program in the municipality of La Paz, Bolivia, which reduced the time required to register a new business by more than half.  As a result, the number of new registered business grew significantly, and the municipal government increased its revenues from operating licenses.

The success of the La Paz pilot program helped create the National Plan for Simplification, aiming to replicate this success throughout the country.  "Our collaboration with IFC on this project has not only benefited new businesses but has fostered greater efficiency throughout other areas of municipal administration," affirmed La Paz Mayor Juan del Granado.  


According to Bernard Pasquier, IFC’s director for Latin America and the Caribbean,,"The Facility's work in promoting SME development through this and other projects reinforces IFC's commitment to social development as part of its investment program."

The Municipal Fund, a joint venture between the World Bank and IFC, provides investment for state, provincial, and municipal projects without reliance on central government funding.  During the Congress, IFC highlighted a recent project in Tlalnepantla, Mexico, where IFC provided a partial credit guarantee for issuing municipal bonds for a water treatment facility.

"The success of the Tlalnepantla project has provided an innovative model for IFC to apply its investment expertise to municipal development.  With the Municipal Fund, we will continue to develop new approaches to financing at the subnational level," said Declan Duff, director of the Municipal Fund.

IFC's participation in Experiencia América, through the Municipal Fund and the LAC SME Facility, underscores its commitment to innovative and sustainable development.  In applying its international investment expertise to municipal projects, IFC seeks to maximize its impact and promote social responsibility.  Innovation, impact, and sustainability are the hallmarks of IFC development investments, whether for municipal-level or larger-scale projects.

ABOUT IFC

The mission of IFC (
www.ifc.org) is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people's lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY03, IFC has committed more than $37 billion of its own funds and arranged $22 billion in syndications for 2,990 companies in 140 developing countries. IFC's worldwide committed portfolio as of FY03 was $16.8 billion for its own account and $6.6 billion held for participants in loan syndications.

ABOUT IFC LAC SME FACILITY

IFC’s Latin America and Caribbean Small and Medium Enterprise Facility promotes private sector development by supporting small and medium enterprises, thus contributing to job creation and poverty reduction in Latin America and the Caribbean.  It is a multidonor initiative backed by a $10 million commitment from IFC and an expected $20 million in donor contributions. Its activities focus on building SME capacity; increasing access to new markets and customers for the region’s SMEs; making it easier for SMEs to do business by simplifying business regulations; broadening access to finance; and fostering indigenous and social enterprise.