Announcement of First Meeting of the Consultative Group for Bolivia on May 4, 1977

.world Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. • Telephone: (202) 393-6360 May 4, 1977 FIRST MEETING OF THE CONSULTATIVE GROUP FOR BOLIVIA The following announcement was issued at the World Bank's European Office in Paris. The first meeting of the Consultative Group for Bolivia, sponsored by the World Bank, was held in Paris on May 2 and 3, 1977; for the purpose of coordinating external financing of the development efforts of Bolivia. The meeting was chaired by Mr. Adalbert Krieger, Vice-President for Latin America and Caribbean Region of the World Bank. The Delegation of the Government of Bolivia was headed by General Juan Lechin Suarez, Minister of Planning and Coordination, and included Mr. Carlos Calvo, Minister of Finance, and several other high government officialsa The Delegation also included executives of some of the principal state enterprises as well as representatives of the private sectore • The Meeting was attended by representatives of the governments of Argentina, Belgium, Brazil. France, The Federal Republic of Germany, Italy, Japan, Spain, United Kingdom, The United States and Venezuela. Representatives of the International Finance Corporation, International Monetary Fund, United Nations Development Programme, Andean Development Corporation, The Inter-American Development Bank, and observers from Canada, Switzerland and the Organization for Economic Cooperation and Development (OECD) also attended. The Group discussed the development prospects of Bolivia and its future requirements for external financing as set forth in an economic report prepared by the World Bank and a list of projects prepared by the Bolivian Government. Minister Lechin, the Head of the Bolivian Delegation, made a compre- hensive statement outlining Bolivia's development strategy and philosophy. He gave a frank picture of the problems facing Bolivia but, at the same time, he referred to the remarkable progress that had been achieved in recent years. The Minister explained the Government's plans for sustaining high levels of economic growth and achieving better living conditions for the vast majority of the country'· population. He said that the Government would carry out a large scale investment program over the next years which would emphas[ze industrial development based on Bolivia's resources and the development of agriculture, minerals, and hydrocarbons. He stressed that every effort would be made to incorporate the poor farmers of the highlands into the main streams of the country's economic life. The participants in the meeting noted the high rate of economic growth • achieved during the last few years, the reduction of inflation, and the strength- • •• I  - 2 - ening of the country's balance of payments. The donor countries expressed support for the Government's efforts and indicated their intention to continue the financial and technical cooperation in support of that effort, including concessionary aid. The Group noted that, while Bolivia had contracted substantial amounts • of loans from abroad in the recent past, its external debt was consistent with the country's servicing capacity. Furthermore, the Government would use its greatly expanded access to world capital markets for long-term financing of high priority projects and it would exercise restraint in its borrowing from commercial banks in the future. The Government also was planning to reform the country's tax system to enable Bolivia to finance a larger share of its development effort. The Group also noted that while tre country's technical capacity for project pre- paration and execution had been greatly strengthened in recent years, additional efforts should be made in this respect with the assistance of international agencies and other governments. Strong interest was expres~ed in the Government's plans to improve living standards of highland farmers who comprise nearly two-thirds of the country's population. Virtually all members of the group voiced support for this effort and their intention to expand their programs in this sector. Some members also took considerable interest in the Government's plan of intensifying the development of the mining sector. Approval was expressed of the Government's open attitude toward private foreign investment in view of the need of the country for expanded technological and managerial capacity. The Government emphasized that it was making all efforts • to create a favourable climate which would make it attractive for private investors to come to Bolivia. The meeting of the Consultative Group will be followed by a conference organized by the Bolivian Government on May 4 with the Private Banking Community and a meeting on May 5 sponsored by the Centre Europeen de Cooperation Internationale. It was agreed that the Group would meet again in approximately eighteen months. •