Washington, 20 December 1996 (RFE/RL) - The World Bank has approved a loan of $60 million to help Latvia implement its economic reform program.
The Bank says the loan is needed to allow Riga to refinance exceptionally high debt service payments it has coming due in 1997. This will improve the budget cash flow and reduce the country's vulnerability to very expensive short-term debt exposure.
The money will also be used to free more resources for several long-delayed programs of public investment as well as to reduce the need for government borrowing on the domestic market, thereby freeing more resources for productive private investment.
Latvia's reform program this year has as its main priorities to maintain a stable economic environment and to encourage efficient growth by expediting privatization, enforcing financial discipline on banks and enterprises, and improve the efficiency of markets.
The government also aims to reform public sector resource management to make it more efficient and cost-effective.