73108
           Republic of Guatemala: Country Partnership Strategy (CPS) FY13-FY16
                                            and
    Fiscal Space for Greater Opportunities First Programmatic Development Policy Loan

                                 Meeting of Executive Directors

                                       September 27, 2012


                                    Chairman’s Summing Up ∗

         Executive Directors discussed the joint IBRD/IFC Country Partnership Strategy for the
Republic of Guatemala (R2012-0184[IFC/R2012-0292]). Directors commended Guatemala’s
stable macroeconomic performance, recovery from the economic crisis of 2008, and the recent
fiscal reform efforts but stressed the importance of continued monitoring and coordination of the
reforms. Specifically, they noted the passage of a landmark tax reform which would help the
country make progress in meeting the promises outlined in the Peace Accords and supported by
the DPL. Directors also emphasized that serious development challenges remain, including the
need to address deep-rooted poverty and malnutrition, inequality, poor social indicators, high
rates of crime and violence, as well as the effects of climate change and vulnerability to natural
disasters.

        Directors expressed broad support for the CPS and its approach. They welcomed the
CPS’s focus on improving social development outcomes and promoting sustainable and
inclusive growth. Directors additionally considered the inclusion of two transversal themes,
gender and citizen security, important for helping the government to address the country’s core
development challenges. Directors commended the strong alignment with the Government’s
own policy agenda and budget cycle. Directors also noted the close coordination with the IDB
but urged avoidance of overlapping or conflicting goals to maximize the impact of development
interventions. Directors welcomed IFC’s significant and growing role in Guatemala and
encouraged further joint Bank/IFC efforts going forward.


                                     Summary of Discussion∗

      Executive Directors approved the Fiscal Space for Greater Opportunities First
Programmatic Development Policy Loan (DPL) in the amount of US$200 million for the
Republic of Guatemala on the payment terms and conditions set out in the President’s
Memorandum (R2012-0188).

       Directors expressed support for the objectives of the loan, noting that it will enhance
implementation of the Government’s reform program in the key areas of public sector
management and social inclusion. Directors stressed the need to prioritize strengthening of tax
administration and also noted that revenue-enhancing measures are important to preserve social
spending. Directors underlined the importance of continued donor collaboration.

∗
 This summary is not an approved record.