The proposed operation is a one tranche Development Policy Loan (DPL) to the Municipality of Belo Horizonte (BH) in the amount of US$200 million. The operation will support integrated urban development and the reduction of social vulnerability in Belo Horizonte through innovative approaches to social inclusion and sustainable governance. This DPL will present a comprehensive set of policy reforms to enable socially sustainable urban governance, as well as implement inclusive urban development through innovative policies that focus on poor and vulnerable citizens.
Belo Horizonte has been characterized by growth and service improvements on the one hand, and informal settlement sprawl and inequality on the other. The city of Belo Horizonte, state capital of Minas Gerais, has 2.4 million inhabitants living in 331.4 km2 (demographic density is almost 7,300 inhabitants per square kilometers). Due to its geography and historical negligence of the more vulnerable population, the city’s poorest dwellers have suffered from inadequate housing and poor access to basic infrastructure and services, resulting in a higher prevalence of unsatisfactory social and economic indicators in the slums (vilas).
Proactive integrated urban development strategies are urgently needed to ensure that the social exclusion gap is addressed, and that the city can benefit from effective and long-term sustainable governance. Recognizing these priorities, Belo Horizonte embraced a hands-on approach by proposing new participatory decision-making mechanisms to foster direct citizen inclusion and ownership of budget allocation, policy decisions, and planning. The municipality also supports state-of-the-art resettlement programs and is spearheading a very innovative approach to reach vulnerable families by designing a development plan for each family not currently reached by existing social programs. This operation will thus reward and support these policies.
The proposed operation is Brazil’s second municipal DPL, and follows the positive experience of the loan to the municipality of Rio de Janeiro. In the loan to Rio, work at the municipal level was accompanied by policy support at the state level, which created strong territorial development synergies. The proposed operation will similarly benefit from the Bank’s long-standing relationship with the state. The operation is fully aligned with the upcoming CPS, and will create the environment to permit the fine-tuned coordination of policies between the state and municipal governments through an integrated development approach.
The objective of the proposed operation is to promote integrated urban development and reduced social vulnerability in Belo Horizonte through innovative approaches to address social inclusion and sustainable development and improve public sector governance and service delivery.
Document Date: 2011/11/08. Document Type: Project Information Document.Report Number: AB6662.Volume No: 1.Country: Brazil.
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