WASHINGTON, D.C., November 25, 2024 – The World Bank’s Board of Executive Directors today approved a project aimed at strengthening the targeting and efficiency of Costa Rica’s social protection system. This project makes it possible to quickly mobilize liquidity to finance priority expenditures, for example, in the event that an urgent response to a shock, such as a social, climate, or economic emergency is needed in the country.
The “Social Risk Management DPL DDO” focuses on two pillars. The first pillar aims to improve the targeting of social programs by strengthening the National Information System and Single Registry of State Beneficiaries (SINIRUBE) to increase its coverage, robustness, and inclusiveness. The second pillar is aimed at enhancing the efficiency of social spending by reducing fragmentation and promoting better delivery systems for social transfers.
“This type of credit is vital for managing and mitigating social impacts in emergency situations. It will allow us to respond quickly and effectively to adverse events that may affect our economy and social well-being. It will also give us the flexibility to protect the most vulnerable populations and ensure the country’s fiscal stability in uncertain times,” said Nogui Acosta Jaén, Costa Rica’s Minister of Finance.
Forecasts suggest that by 2026, 85 percent of social spending will be targeted using SINIRUBE for eligibility, a sharp increase from 73 percent in 2023. In addition, 70 percent of household information is expected to be updated in the next 18 months, compared to 53 percent in 2024. Efforts will also be made to ensure that 45 percent of the poorest households have their data georeferenced and their risk situation identified, which will help build capacity to respond to shocks and emergencies.
To improve social spending efficiency, the project aims to ensure that by 2026, 75 percent of the resources of the programs implemented by the Joint Institute for Social Assistance (IMAS) will reach the population in the first income quintile, that is, those with the lowest incomes. At the same time, the number of beneficiaries receiving transfers through the Single System for the Payment of Social Resources (SUPRES) is expected to increase from 440,000 in 2024 to 600,000 in 2026. The estimates are based on data collected by IMAS and SINIRUBE.
Carine Clert, Country Manager for El Salvador and Costa Rica at the World Bank, noted that “Although the social protection system is an essential pillar of Costa’s Rica’s social compact, it is plagued by shortcomings that make it difficult to provide full coverage for the most vulnerable populations, especially in times of emergency. The project is an integral part of the Bank’s efforts to help Costa Rica address its socioeconomic challenges and continue along the path of inclusive growth.”
The US$200 million operation, which is financed by the International Bank for Reconstruction and Development (IBRD), is a variable rate loan with 33.5-year maturity and a grace period of six years.
Download the new Country Partnership Framework for Costa Rica.
More information about World Bank's work in Costa Rica.
Visit us on Facebook.
Be updated via Twitter.
Watch our YouTube channel.
