Cape Verde guarantees support from World Bank after change of status to “medium-developed country”

1 June 2006

Praia, Cape Verde, 01 June – The World Bank (WB) and the African development Bank (ADB) will continue to grant loans to Cape Verde after the country’s change of status to Medium Developed Country (MDC), expected in 2008.

The statement was made by Cape Verde’s foreign minister, Victor Borges during a press conference after two days of meetings with international partners to discuss an gentle transition from Least developed Country (LDC) to MDC.

The decision to make Cape Verde climb one level on the scale that defines the development of countries that are part of the United Nations Economic and Social Council (ECOSOC) was the result of a UN resolution in 2004.

This move will have “sensitive” implications for the Cape Verdean economy and its growth, both the archipelago’s government and its international development partners believe.

However, the decision by the WB and the ADB, two of Cape Verde’s main partners may, according to Borges, minimize the impact of the transition from LDC to MDC in 2008.

After two days of meetings with international partners a group for supporting the transition was set up.

The group is made up of Cape Verde’s main partners: Portugal, USA, Spain, France, the Netherlands, Austria and the People’s Republic of China, as well as the WB, the ADB, the European Union, and the United Nations’ system in the country.

One of the “risks” that is inherent to the status of MDC is the substantial reduction of funding from international financial institutions which, over the last few decades, has allowed Cape Verde to consolidate its position at the top of the Human Development Index of the United Nations Program for Development in Africa.

Low interest rates and long payment periods of debts as well as long periods of non-payment that can last up to a decade are the benefits Cape Verde stands to lose with its change of status. (macauhub)