Announcement of Consultative Group for Colombia on February 29, 1972

.. " •• 1818 H STREET, N.W., WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 February 29, 1972 Subject: Consultative Group for Colombia A meeting of the Consultative Group for Colombia, sponsored by the World Bank, was held in Paris on February 28 and 29, 19 72. This was the sixth meeting of the Group since its inception in 1962, and its purpose was to continue to facilitate coordination of development assistance to Colombia. The meeting was attended by representatives of the governments of Belgium, Canada, France, Germany, Italy 9 Japan, the Netherlands, Spain, the United Kingdom and the United States. Representatives of the International Monetary Fund, the Inter-American Development Bank, the Inter-American Committee for the Alliance for Progress, the United Nations Development Programrre we~e also present. Switzerland, the Organisation for Economic Co-operation and Develop- ment, and the International Coffee Organization were represented by observers e • The delegation of the Government of Colombia was headed by Dr. Rodrigo Llorente, Minister of Finance. It included Dr. Roberto Arenas 1 Chief of the National Planning Department, Dr. Mariano Ospina, President of the Third Commission (Economic) in the Senate" Dr .. Evelia Ramirez, President of the Third Commission (Economic) in the House of Representatives, and several members representing the private sector. The Group discussed a report on Colombia's current economic situation and future prospects prepared by the World Bank and considered Colombia's needs for external financing for the year 1972. In his address to the meeting the head of the Colombian d~legat:i.on reviewed the progress achieved during the preceding 18 months, indicatect-~ne objectives of the Government with respect to economic growth, employment and structural change, and discussed the policies that have been adopted or were under con- sideration to achieve these objectives. Dr. Llorente drew the attention of the meeting to the adverse effects on output, Government finances and import capacity of Colombia resulting from the unexpected large reduction in coffee prices and severe rain and storm damage during 197'1. He reviewed the measures taken to increase fiscal revenues and savings despite these adverse conditions and indicated that further measures were contemplated. to enlarge Colombia's capacity /more  - 2 - • to finance its development program. He also reviewed the actions taken to remove artificial price distortions and referred to the adjustment of the domestic price of coffee. He discussed. the progress. made in diversification of the economy, and referred to the resumption of rapid growth in non-traditional exports, which in 1971 reached almost $300 million or 40% of total exports. Dr. Arenas, in his statement, discussed the Govemment's development strategy as contained in the 1971-74 Plan, w!th its emphasis on employment generation, broadening of b,anefits of economic growth, maximization of savings and their efficient use, and the need for fuller integration of foreign assist- ance and domestic efforts in pursuit of national objectives. He singled out the need for increased investment in urban areas, particularly in construction activities to maximize employment. The Group agreed that in the preceding year the Colombian Government had largely carried through with the development policies it had announced at the fifth meeting of the Group in February 1971 that it would implement. The Group was impressed in particular with the fiscal actions which the Government had ta.1<.en, and with the success of its export diversification drive. They were interes;tcd in the Government's policies to expand employment and improve 11ving conditions in the rural areas. The Group also noted with satisfaction that the commitment of external project assistance during 1971 of about $300 million had met the objective set during its fifth meeting in February 197,1.. • The Group noted that the public investuent program would call for external project commitments of about $350 million in 1972. The Group expressed the view that project assistance of this order of magnitude, in addition to substantial amollll.ts for non-project assistance presently under consideration, was needed to achieve the investment and growth objectives of Colombia. The Group noted the Government's fiscal program intended to enlarge the amount of funds available to finance a satisfactory level of public investment, includ- ing both the externally assisted projects and those undertaken wholly out of domestic·resources. The Group was impressed with the coq,re~ensiveness and completeness of infor.mation·contained in the 1972 project i1st and emphasized the need to accelerate actions to commit funds to particular projects and to facilitate disbursements for ongoing projects. The meeting was conducted under the chairmanship, of Mr. Gerald Alter on behalf of the International Bank for Reconstruction and Development. - 0 - •