The World Bank Group stands ready to assist Venezuela, a member and shareholder of the institution, if the government asks for help in dealing with a punishing economic crisis, the bank’s top executive for Latin America said.
Jorge Familiar, World Bank vice president for Latin America and the Caribbean, told Reuters in an interview on Monday that the bank has had no engagement with Venezuela since it paid off past loans in 2008 under the late former President Hugo Chavez.
But Familiar said the bank’s officials have been intensely watching growing shortages of food and medicine this year as the oil exporting country sinks deeper into recession, sparking violent protests.
Familiar said that the multilateral lender would be ready to develop an engagement program for Venezuela, but it would need to be “invited” to do so by President Nicolas Maduro’s government.
“As with all shareholders of the institution, if the situation were to arise, we would be ready to engage with Venezuela,” Familiar said. “What we would need is for them to call us.”
On Tuesday, Familiar said that there would be many steps required before a World Bank loan to Venezuela could be discussed, including re-establishing a dialogue with government officials and providing technical assistance and analysis.
“We are far off from lending to Venezuela,” he said. “We could have a conversation that would start on the analytical front.”
Last year, the World Bank approved $2.5 billion in new credit lines for Peru to backstop the country’s financial plans amid falling revenues as commodity prices slumped.
The credit lines carry reform requirements under World Bank programs to support improvements in public expenditure management, public education and to streamline the formation of new private companies.
Familiar said Peru was meeting benchmarks for that program.
Venezuela was the outlier on Tuesday when the World Bank released its latest economic forecasts for Latin America and the Caribbean, predicting that regional growth would turn positive, to 1.5 percent in 2017 as recessions end in Brazil and Argentina, after a regional decline of about 1 percent in 2016.
The World Bank forecast that Venezuela’s growth would fall by 3.1 percent in 2017 after a spectacular 12 percent drop in 2016. It forecast that Venezuela would start to recover by 2018, with 0.6 percent growth amid firmer oil prices, but lag far behind regional growth of about 2.5 percent for 2018.