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Tuesday, 17 February 1987
Page: 48

(Question No. 1574)

Senator Zakharov asked the Minister representing the Minister for Foreign Affairs, upon notice on 9 December 1986:

(1) What is the total of IMF loans recently directed to Chile.

(2) What conditions are placed on the way in which those funds are to be disbursed.

(3) What specific projects are to be funded and what is the allocations of money to each project.

Senator Gareth Evans —The Minister for Foreign Affairs has provided the following answer to the honourable senator's question:

(1) There has been no recent IMF loan to Chile. However, on 20 November 1986 the Executive Board of the International Bank for Reconstruction and Development (The World Bank) approved a US$250 million structural adjustment loan (SAL) to Chile. Structural adjustment loans are quick-disbursing loans designed to support the economic policy and institutional changes necessary to reduce current account deficits while maintaining the development effort.

(2) The loan will support the government's program to accelerate exports and domestic savings so as to continue the recovery of economic growth and employment. The loan will finance the CIF (cost, insurance and freight) cost of eligible imports, subject to documentary evidence that they have been paid for on or after loan signing. Public and private sector imports will be eligible, except for military equipment and luxury consumer goods. Procurement under the loan will be in accordance with the Bank's Procurement Guidelines of May 1985 which include the application of international competitive bidding. The Bank will have access to all detailed documentation relating to withdrawal applications under the loan, and will review these as appropriate. The loan will be disbursed in two tranches: US$150 million immediately, and US$100 million after a six-month performance review.

(3) As this is a structural adjustment loan, it is not allocated to any specific projects, but helps finance imports in support of an approved structural program.