Colombia - Social Sector Adjustment Loan Project

Report No. PID10991 Project Name Colombia-Social Sector (@) Adjustment Loan (SECAL) Region Latin America and the Caribbean Region Sector Multi-Sector Task Managers Vicente Paqueo and Laura Rawlings (LCSHD) Project ID COPE69861 Borrower Republic of Colombia Loan Amount USD$155 million Guarantor Not applicable Implementing Agency Environmental Category C Date PID prepared 13 February 2002 Projected Board Date 30 May 2002 Background: The onset in 1999 of Colombia's first recession in seventy years exacerbated a series of social and economic difficulties that threaten to undermine the progress made in both economic and social development. To strengthen economic recovery and provide a foundation for sustainable growth, the Government of Colombia (GOC) has pursued a series of structural adjustment measures supported by an IMF program and a World Bank-financed Structural Fiscal Adjustment Loan (SFAL). These measures aim principally to control the growth of public expenditures through improving the country's fiscal and financial stability. The proposed SECAL, a one tranche loan to be completed before the end of the current Administration, seeks: (i) to complete the current stage of Colombia's Bank supported social sector strengthening program begun in 1998, which includes among others the promulgation of regulatory measures to enable the implementation of recently approved education and health reforms, as well as the establishment of an integrated social risk management policy framework; and (ii) to promote greater social sustainability (tolerance) of the SFAL supported fiscal reforms. This SECAL is being proposed after taking into account its importance to the Bank's country assistance strategy, GOC's short term financial needs, and the reform measures it has recently initiated to control public spending. In this regard, the CAS Update recently discussed with the Board confirmed the strategic importance of this SECAL. Furthermore, during the SFAL discussions the Board expressed the need for the SECAL to ensure  fiscal space for social protection and sustainability of fiscal reforms. Contact Points: Task Managers: Vicente Paqueo (202) 458-2534 Laura Rawlings (LCSHD) (202) 473-1274 InfoShop The World Bank 1818 H Street NW Washington , D.C. 20433 Telephone: (202) 458-5454 Fax: (202) 522-1500 This PID was processed by the InfoShop during the week ending August 16, 2002. -2-