Announcement of World Bank Grants Two Hundred Million Dollars Loan to Continue Labor Reforms and Social Development in Colombia on September 9, 2003

Colombia: World Bank Grants $200 Million Loan To Continue Labor Reforms And Social Development Contacts: Gabriela Aguilar (5255) 5480-4200 Gaguilar2@worldbank.org Alejandra Viveros (202) 473-4306 Aviveros@worldbank.org To find more information on this project, please visit: http://web.worldbank.org/external/projects/main?pagePK=104231&theSitePK=40941&menuPK=228424&Projectid=P079060 WASHINGTON, September 9, 2003 — The World Bank today approved a $200 million loan to continue the work of reforming Colombia’s labor market and to make further progress with social development projects. The First Programmatic Labor Reform and Social Structural Adjustment Loan (PLaRSSAL I) will help the Government of Colombia to implement its recent legislation amending labor regulations (Law 789) and accelerating reforms in education, training, health, and social protection (Law 715). By supporting reforms that are already underway and underpinning achievements already reached, the loan provides support for the Government’s efforts to increase employment, strengthen social welfare and protection, and invest in education and training. “The Government of Colombia has the determination, the capacity, and the sound policies to realize its goals for employment and social protection,” said Isabel Guerrero, the World Bank Country Director for Colombia and Mexico. “This new funding will help ensure that the reforms proceed efficiently and particularly that the poorest members of society share in the benefits.” The specific measures include: New incentives for employers to create jobs for young, elderly, disabled and unemployed Colombians; Expansion of apprenticeship and training opportunities ; More nutrition and child care assistance to poor families; Health insurance for more low-income workers. Since health and education are critical to building a society’s “human capital”, PLaRSSAL I also includes initiatives to increase school enrollments, raise educational attainment, and extend the government’s vaccinations program to more children. As a result of PLaRSSAL I, it is expected that 400,000 jobs will be created in the next four years, while enrollments at various levels of education should increase by at least 500,000 in the medium term. The ultimate objective is for more poor and disadvantaged Colombians to escape from poverty through better health, education, and employment, thus boosting economic growth for the country as a whole. This fixed-spread loan, repayable in 16.5 years, includes a grace period of five-and-a-half years and will be disbursed immediately. A second $150 million loan, PLaRSSAL II, to be proposed in 2005, involves more ambitious targets in the same fields, as well as establishing government mechanisms to evaluate the effectiveness of these social programs and solicit feedback from the public. This second stage will go forward, provided that certain stated targets for PLaRSSAL I have been achieved. These initiatives are being pursued under the umbrella of the World Bank Group’s current Country Assistance Strategy (CAS) for Colombia. That strategy, approved in January 2003, aims to help achieve rapid and sustainable growth and to give all Colombians a share in that growth and to build efficient and transparent governance. The CAS involves project and investment loans of up to US$3.3 billion through June 2006. For more information the World Bank’s work in the Latin America and Caribbean region, please visit: http://www.worldbank.org/lac. Click here to read the current Country Assistance Strategy for Colombia.