The World Bank has approved a project to enhance Costa Rica's social protection system, aiming to improve its targeting and efficiency. The initiative, known as the "Social Risk Management DPL DDO," is structured around two main pillars. The first pillar focuses on improving the targeting of social programs by enhancing the National Information System and Single Registry of State Beneficiaries (SINIRUBE). This enhancement aims to increase coverage, robustness, and inclusiveness. The second pillar seeks to boost the efficiency of social spending by reducing fragmentation and promoting better delivery systems for social transfers.
Nogui Acosta Jaén, Costa Rica’s Minister of Finance, stated, “This type of credit is vital for managing and mitigating social impacts in emergency situations. It will allow us to respond quickly and effectively to adverse events that may affect our economy and social well-being. It will also give us the flexibility to protect the most vulnerable populations and ensure the country’s fiscal stability in uncertain times.”
Projections indicate that by 2026, 85 percent of social spending will be targeted using SINIRUBE for eligibility, an increase from 73 percent in 2023. Furthermore, it is expected that 70 percent of household information will be updated within the next 18 months, up from 53 percent in 2024. Efforts are also being made to ensure that data for 45 percent of the poorest households is georeferenced with their risk situation identified.
To enhance social spending efficiency, the project plans for 75 percent of resources from programs run by the Joint Institute for Social Assistance (IMAS) to reach those in the lowest income quintile by 2026. Additionally, beneficiaries receiving transfers through the Single System for the Payment of Social Resources (SUPRES) are anticipated to grow from 440,000 in 2024 to 600,000 in 2026.
Carine Clert, Country Manager for El Salvador and Costa Rica at the World Bank, commented on the initiative: “Although the social protection system is an essential pillar of Costa’s Rica’s social compact, it is plagued by shortcomings that make it difficult to provide full coverage for the most vulnerable populations, especially in times of emergency. The project is an integral part of the Bank’s efforts to help Costa Rica address its socioeconomic challenges and continue along the path of inclusive growth.”
The operation amounts to US$200 million financed by the International Bank for Reconstruction and Development (IBRD), with a variable rate loan set over a period of 33.5 years including a grace period lasting six years.