Policy News - October 20, 2004

Brazil’s environmental sustainability loan

In few countries is the national environment as crucial to development and people’s welfare as in Brazil, according to the World Bank. In August, the bank announced that it is lending Brazil U.S.$505 million to help support the country’s goal of balancing economic growth with social development and the maintenance and improvement of environmental quality. Brazil has one-third of the world’s tropical rain forests, the largest reservoir of freshwater, and the savanna with the highest biodiversity. A significant part of the country’s economy is based on its natural resources, and historically the country has used these resources unsustainably. Vinod Thomas, the World Bank’s director for Brazil, estimates that this environmental destruction has cost as much as 4% of the country’s gross domestic product. The loan is meant to fund policy reforms promoting sustainable development in key ecosystems such as the Amazon and improving water resources management. For more information, go to www.worldbank.org/br.