MercoPress. South Atlantic News Agency

New World Bank delegate in Argentina; 'country strategy' to be considered next month

Economist Henstchel is considered well informed of Argentine issues since he spent time in the country following the 2001 meltdown of the economy

The World Bank board of directors will be discussing sometime next month a new aid program for Argentina focused on combating poverty, but the loans approval can't be expected until next year, according to the bank's new representative in Argentina, Jesko Hentschel.

 “In mid September it can be expected for the bank's board to meet and address 'country strategy' regarding Argentina” confirmed Henstchel.

However it is not yet clear what the attitude of the US government will be on the issue but this is crucial since Washington holds 15% of votes of the board. US policy has been that to approve loans, Argentina must solve all its pending default issues, (as it was doing), but since the pari-passu ruling regarding the holdouts and 'selective default', it is not clear what attitude Washington will adopt.

However, most European countries will in effect approve the 'country strategy' with two main pre-conditions: loans are geared to poverty combat programs, not to major infrastructure programs, and it does not commit the immediate approval of new loans, which will have to be debated on a case by case basis in coming months.

World Bank sources quoted in the Buenos Aires media said that approval of the 'country strategy' will most probably be agreed pointed out that the bank has 4.9bn dollars in Argentine projects.

The arrival of German economist Hentschel who is an expert in reducing poverty and promoting human development, came as a relief for the Argentine government, since the bank's office in Buenos Aires had been empty for over six months.

Hentschel has already been in Argentina, particularly following the 2001 crisis, so he is considered well documented on the country. In his speech the economist praised the changes achieved by Argentina in the last decade and said he was willing to work in consolidating the links of the bank with the government.