The Inter-American Development Bank (IDB) reported this Monday that it has arranged a fund of 1,600 million dollars so that Nicaragua, Guatemala and Honduras can access in the next two years to deal with the reconstruction of the damage caused by hurricanes Iota and Eta, as well as supporting adaptation to climate change.
“Countries can use part of these funds to finance their priorities in areas such as the development of resilient infrastructure, disaster risk management, and the provision of basic services to vulnerable populations,” the IDB said in a statement after a forum called Building Resilience against natural disasters.
Mauricio Claver-Carone, president of the IDB, said that “hurricanes Eta and Iota highlighted the urgent need for resilient infrastructure, mitigation of climate change and risk management in Central America that reduces the impact on affected populations.”
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“When the hurricanes arrived, we responded immediately and in coordination with the rest of the multilaterals, and today we presented a plan to continue supporting the region,” he added.
Two years without funding
Cyclones Iota and Eta hit Nicaragua in category five, with a lapse of 15 days between each other in November last year. The Daniel Ortega government estimated the damage caused by both phenomena at 738.6 million dollars.
Ortega had not had access to the IDB window for almost two years, after the approval of the Nica Act, which had reduced the ability to obtain more resources. The legislation of the United States sought to harden the access to resources to the regime until it gave way to an institutional reform, which would guarantee free and fair elections next November.
The United States, according to the legislation, must use its influence to prevent the Ortega regime from accessing resources, with the exception of requests that are intended to address humanitarian emergencies, such as hurricanes and the pandemic.
It is in this context that the Government has been able to contract new loans with multilaterals, with the exception of the Central American Bank for Economic Integration (CABEI), which has not stopped giving money despite state violence, repression and the murder of at least 325 Nicaraguans, according to international human rights organizations.
Now Ortega has the opportunity to access the pocket of the 1,600 million dollars announced by the Inter-American Development Bank.
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Already the World Bank, where the regime also had two years without new approvals, has begun to give money, after a recent approval for 80 million dollars to attend the emergency of the hurricanes.
The IDB funds will be executed in coordination with other agencies such as the World Bank, CABEI and the Economic Commission for Latin America and the Caribbean (Cepal), as well as other partners such as the Central American Integration System (Sica) and partners at the Of each country.
Interest payment postponed
The IDB authorities announced that they are also going to design “new financial facilities to better support both emergency care and risk coverage and adaptation to climate change.”
For example, they mentioned that in December the IDB approved “the postponement of the payment of interest on their loans as a result of a natural disaster and the so-called ‘catastrophe bonds’ were launched as a pilot, which offer coverage against risks related to disasters and adapt to those risks on which the countries want to have coverage ”.
For the IDB, although the countries have developed warning systems for natural disasters, the challenge is to move towards the prevention and management of vulnerability to these events, thus accelerating the implementation of an adaptation and resilient infrastructure development agenda.
And a third component of the program announced by the IDB is the creation of a knowledge agenda to “disseminate good practices in risk management, through a series of dialogues in the region, in which lessons learned in other countries will be shared, like, for example, the experience of New Orleans in the United States ”.
Fund for MSMEs approved
The Inter-American Development Bank also reported the approval of a $ 60 million fund under the IDB Lab, the bank’s innovation laboratory. This is to serve micro, small and medium-sized companies affected by emergencies.
“This initiative, which has the Covelo Foundation as a partner, will provide 60 million dollars to benefit 40,000 micro and small businesses affected by both the pandemic and the hurricanes, to access loans that help to reactivate their businesses immediately ”, Explained the agency.
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The Central American Bank for Economic Integration (CABEI) has already approved a similar fund for more than 350 million dollars, but of the quota that Nicaragua had access, a little more than 50 percent was executed, due to the multiple obstacles imposed by the banking system. to this segment of companies. In the end the sectors were disappointed by the regional initiative, which now the IDB seems to promote one.
What the Ortega regime has achieved
The Daniel Ortega regime has expressed its interest in seeking more resources this year, despite the fact that last year it managed to hire close to a billion dollars.
By 2021, according to the head of the Ministry of Finance and Credit, Iván Acosta, he estimated to manage an additional 200 million dollars to those that have already been completed since last year. This is what has allowed the General Budget of the Republic to increase by 25 percent, that is, 20 billion córdobas.
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