Announcement of Meeting of the Consultative Group for Colombia on June 25, 1973

INTERNATIONAL BANK FOR lHJ T?:i/§8T" • RECONSTRUCTION AND DEVELOPMENT 1818 H STREET, N.W., WASHINGTON 0. C. 20433 TELEPHONE: EXECUTIVE 3-6360 June 25, 1973 Subject: Meeting of the Consultative Group for Colombia A meeting of the Con$.ultative Group for Colom~ia, sponsored by the World Bank, was held in Paris on June 21 and 22, 1973. This was the seventh meeting of the Group since its inception in 1962. Its main purpose was to continue to facilitate coordinatiop of d,evelopment assistance to Colombia. The delegation of the Government of Colombia was headed by Dr. Luis F. Echavarria, Minister of Fina.nee. The meeting was conducted under the chairmanship of Mr. Gerald Alter, World Bank Regional Vice President for Latin America and the Caribbean. Representatives of the Governments of Belgium, Canada, France, Germany, Italy, Japan, the Netherlands, Spain, the United Kingdom, and the United States attended • the meeting. Represent~tives of the International Monetary Fund, the Inter-American Develop~ent Bank, the Inter-American Conunittee for the Alliance for Progress and the United Nations Development Programme were also present. Switzerland, the Organization for Economic Cooperation and Development, and the International Coffee Organization were represented by observers. The Colombian delegation included Dr. Hernan Vallejo, Minister of Agriculture; Dr. Luis Eduardo Rosas, Chief of the National Planning Department; Dr. Indalecio Lievano, Senator; Dr. Carlos Holmes, Senator; Dr. Luis. Velasquez, Congressman; and Dr. Diego Tovar, Congressman, as well as other representatives of the Government. The Group discussed a report on Colombia's economic situation and prospects ,.,.--- . prepared by the World Bank and reviewed the country's needs·for external financing in 1973-74. It also examined a Bank report on Colombia's agricultural development. In his address to the meeting, Minister Echavarria reviewed the progress achieved since the previous consultative group meeting in February 1972, indicated the economic growth, employment, and income distribution objectives of the Govern- ment, and discussed the policies that have been adopted or are under consideration to achieve these objectives. • Dr. Echavarria drew the attention of the Group to the recent expansion of economic activity (7.1% real rate of economic growth in 1972), booming non- traditional exports, and rising employment opportunities, all of which are /more . Unn. Bank Press Release - Meeting of the Consµltative Gr.oup for Colombia - 2 - brightening the prospects for solving his country's development problems. He reviewed measures to increase fiscal revenues in order to expand Colombia's capa- city to finance its economic development, while maintaining reasonable price • stability. He also expressed the interest of the Govern~ent in maintaining a favorable climate for foreign private inve~tment. Dr. Vallejo described ongoing and anticipated programs to achieve the Govern- ment's goals of increased agricultural production, particularly of foodstuffs, and an improved land tenure system, and the provision of greater and more effective assistance to small farmers. He stressed the need for increased investment and technical assistance to agricultur•. The Group agreed that the Colombian Government had implemented the development policies announced at the previous sixth meeting. The Group was impressed by the recent acceleration of economic growth and with the success of the export diversi- fication drive. Note was taken of the efforts being made to improve living condi- tions in the rural areas, .uid interest was expressed in providing technical and financial assistance for these purpose$. The Gr0up also noted that while external project commitments had fallen below expectations in 1972, a satisfactory level • was achieved in the first half of 1973. The Group noted that the 1973-74 public investment program would call for external project commitment of about $310 million annually. The Group expressed the view that project assistance of this order of magnitude was needed to achieve the investment and growth objectives of Colombia. The Group shared the Government's concern about the acceleration of inflation, and discussed measures which might be taken to reduce exc,ss demand and ,tl~pen price increases. The Group took note of the Government's intention to follow prudent external borrowing policies by limiting recourse to short and medium-term foreign borrowing involving hard financial terms. The Group reviewed the list of projects for external financing and many expres- sions of interest in particular projects were provided by members of the Group. It was brought out that many of the proj{!cts on the list are already at an advanced stage of consideration, and that further discussions concerning particular projects would be held among the interested parties as soon as possible. The Group emphasized the need to accelerate the process of project identification and preparation, and agreed that external assistance should continue to be made available on favorable • tenns. 0 (