The private sector continues to respond positively to the new economic environment, and public confidence has improved. Domestic and international enterprises are investing heavily in privatized companies, and the corporate sector is implementing important restructuring measures.
Performance remains uneven, however, across sectors.
Restructuring needed to improve competitiveness is being implemented faster in larger corporates, while progress of smaller firms is slower. Unemployment remains high at about 17 percent, reflecting to some extent prevailing rigidities in the labor market. Much of this investment supported privatization and concessioning initiatives in infrastructure. With the return of private capital flows and improved access to financing for large corporates and many infrastructure projects, the need for IFC has been reduced and has shifted toward smaller firms and proj-ects, leading to a sharp reduction in investment volume. IFC s investments concentrated on the agribusiness sector in FY97, with projects in meat processing, oilseed crushing, and dairy product production.