An additional US$60 million - the first tranche of a potential US$180-million loan - will go to the government to invest in measures geared at improving the country's trade competitiveness, domestically and internationally. The US$300 million private sector funds will be managed by the DR's central bank.

The funding comes from the IDB's US$6 billion liquidity programme for growth sustainability, set up in October 2008 to help Latin American and Caribbean countries restore credit flows for companies amid a global crisis that have disrupted financial markets.

DR is the fourth Caribbean country to receive assistance under the programme under which some US$1.2 billion has already flowed to Jamaica, Costa Rica and El Salvador to assist their productive sectors.

Credit will be disbursed in American currency through DR's banking system to unlock credit that has been frozen as a consequence of the world financial crisis.

Support production

"The funds will support production, allowing companies to preserve employment," said the IDB in a statement.

The productivity loan is for a five-year term, with a three-year grace period, while the competitiveness Libor-based loan is repayable in 20 years, with a grace period of five years.

The latter loan is geared at driving efficiencies in companies in the business of export with a focus on small and medium enterprises.

"The plan also supports measures to improve public administration, reform the legal system, foster investment in technology and innovation, and other actions that will enhance the Dominican Republic's business environment," said the IDB.

lavern.clarke@gleanerjm.com