Colombia - Current economic position and prospects

i 1- 0 "Tr n I f "T 1r, n nr-E I R I% I IzU Report NO. WH-102a This report was prepared for use within the Bank It may not be publisked nor may it be quoted as representing the Bank's views. The Bank accepts no responsibility for the accuracy or completeness of the contents of the report. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT CURRENT ECONOMIC POSITION AND PROSPECTS OF COLOMBIA January 30, 1961 Department of Operations Western Hemisphere CURRENCY 'EQUIVALENTS !September 1960) Official buying rate - $1. 00 = 6. 50 Pesos Seling rate fficial (Auctioni - $1. 00 = 6. 70 Pesos 1 Peso = $O. 15 Free Market - $1.00 = 6.85 Pesos 1 Peso = $0, 146 .1 million pesos = $146, 000 TABLE OF CONTENTS Page No. BASIC DATA SUMMARY AND CONCLUSIONS ,. ........... . . . - i I. Economic Developments, 1957-1959 . . . . . *...... 1 A. The Settlement of Commercial Arrears . . . . . . 1 B. Economic Readjustment after 1957 ....... . 2 C. The 1959 Balance of Payments...... . . . . . 6 II. The Current Economic Situation . . . . . . ... . . .7 III. Prospects of the Colombian Economy . . . . . . * * . . 10 A. The Balance of Payments . . ...........10 B. Capacity to Serve the External Debt . . . . . . . 12 C. Economic Growth Prospects . . . . . . . . . . . . 13 D. Social Stability . . . . . . . . . . . l IV. Creditworthiness . . . . . . . ... . . . . 15 APPENDIX A. Foreign Exchange Earnings on Current Account, 1956-19ou and Projections for 1yo5 APPEN B. Agrarian Reform STATISTIUAL AfPENIIX Area: 439,825 square miles Population: 14.8 million (mid-1960 estimate) Rate of Growth 1951-19160: 2.09% Gross Domestic Product (159): 3.0 billon pesos Real rate of growth lY50/ 5: -.o 1954/ 8: 3.0% 19 5 9: 5.5% Gross Fixed Dometic Investment 1959: 17.4f% of GDP Per Capita Income: $250 equivalent Balance of Payments, 1959 (In millions of U. S. dollars): I. Merchandise Account 125 IT. Service and donations account - 60 III. Capital Account, excluding official re- serves and official short-term capital: 22 IV. Errors and Omissions - 3 V. Official Reserves and official short- term capital movements 84 Public Finance: Government Expenditures (1960 Budget) 2,255 million pesos (approximately 9.2% of GDP) Prices: W4holesale prices - Change December 1958 - December 1959 7.8% June 1959 - June 1960 2.7% December 1959 - June 1960 2.2% Consumer prices - Change December 1958 - December 1959 8.1% June 1959 - June 1960 5.3% December 1959 - June 1960 3.7% External Public Debt. December 1960: Tot_ql (in1nuin mrindi shursed) LOL. q million Balance of Payments Credits 171.0 Mprliiim_+.A-rm rhtht1.2 Long-term debt 182.3 Other (67.1) SR1,H7ARY A1D cnWT.TT.TC.q 1. This report reviews the development of the Colombian economy over -- ---.VLt.) ±1i jJ V.ALJ ~U1Ji± IU U. Q kVVjj-7C.Mj VJCLL) _UL11 late 1959 and distributedto the Executive Directors in April 1960. 2. By the end of 1959 the Colombian Government had greatly progressed in its e ffort to repa th4 hr-er omril netdes cuua during the period 1954-1957. Net repayments of approximately $21 million duriug -1 J.7py 1:u l'UUUU ufe Ori al UeUT TO jpL(L MillIon.,- A goOd proportion of the remaining amount was in new balance of payments credits obt-ined to refinance the original commercial arrears. Strict monetary credit and fiscal policies and severe controls of imports permitted the repayment of arrears within a framework or growing internal stability and while the country's official reserve position improved. During 1959, prices moved up by about 7.55 against 12:% in 1950 and 230 in 1957. Official gold. and foreign exchange reserves increased from 156 million at the end of 1957 to 917U million in 1958, and 224 million in 1959. 3. The successful reduction in the short-term external debt rested to a large extent on the ability of the Colombian economy to continue operating at a fair pace, notuithstanding the much lower level of imports which it could now command. The drastic loss in exchange earnings from coffee (from %529 million in 1956 to l366 million in 1956) was matched by an even greater reduction in imports, from $.605 million in 1956 to $384 million in 1958. The adaptation of the economy to the new and reduced level of imports was facilitated by the availability of large productive capacity built shortly before the 1957 balance of payments crisis, by shifts in the commodity composition of imports and by the drawing down of inventories of imported raw materials and intermediate goods. Thus, domestic industry continued expanding and diversifying and was able to replace many constuer items heretofore imported. As to total output levels, new statistical data recently compiled show that during 1957 and 1958 the rate of growth of do- mestic product in real terms was approximately the same as in the two preceding years, i.e. 3%, or barely enough to maintain per capita income levels. These rates contrast with the much higher ones which prevailed between 1950 and 1954. However, an important fact disclosed by the new estimates is that the reduction in the country's rate of growth did not begin with the adoption of the policy of economic stabilization but pre- ceded it by two years, i.e. that it coincided with the end of the boom in coffee prices. In 1959 the rate of growth of gross domestic product returned to the level of the early 1950's. 4. The rapid repayment of the commercial arrears and the success of the Colombian stabilization policies had a marked effect upon the country's external credit standing and on the balance of payments position. /1 In addition there was a net reduction of $;38 million in private bank and supplier credits and $!6.0 million in the long-term debt. long-and short-term capital was increasing. Foreign exporters showed their co[unIence UY reurag the graUniLg of' short-Uerm umuneri-' L.Lt,LLU U Colombian importers who in recent years had to pay cash or even make advance payments for their purchases. As a result, tne 1y9y external accouLu SOWuw an unexpected surplus, reflected in an increase of $53.7 million in official gold and foreign exchange reserves. A one year stand-by arrangement Lor $41.25 million entered into with the I.M.F. in October 1959, was not utilized. 5. During the current year the basic economic position of Colombia remains practically the same as in 1959. The settlement of' the short-term external indebtedness continues and net repayments for the full year should amount to about S25 million. Fiscal accounts are likely to close with a surplus. 11onetary stability, in spite of some recent relaxation of credit restrictions, is being maintained. There is one important difference, however. Since the import level has been allowed to rise, the balance of payments may close with a substantial deficit. Total imports for 1960 may reach hb5 million thus exceeding by 10% those of 1959. 6. An analysis of the factors underlying the balance of payments deficit indicates that although the availability of foreign exchange will tend to limit the expansion of the Colombian economy for some years, satisfactory rates of economic growth are possible without incurring balance of payments defiJts of large magnitude. An important element in this respect are export earnings which are likely to increase over the next few years. The tendency is already apparent both in the case of some of the traditional commodities (crude petroleum) and in most of the so-called "minor" exports, which in 1960 are expected to produce over 124 million as against t16 million in 1959. As to coffee exports, their absolute dollar value may slightly go down over the next five years. Still, total commodity exports are projected to increase by %.0 million, thus affording some margin for a gradual increase in imports. The balance of Dayments situation will also gradually improve as present heavy repayments of the short-term debt begin to decline rapidly after 1991. 7. The external debt outstanding as of the end of 1959 amounted to h039 million- Of' this totql A182- million ure l1n-t.rm oblietions $50.6 million private bank and supplier credits and -171.0 million balance of payments credits contracted to settle the 1947 commercial arrears. These amounts must be raised by new credits obtained during 1960, viz: t8 million in new T-.9RD. lons and millinn in qn Vrn-.Tmnnrt. Rrk loan, still in the negotiating stage. The scheduled debt service on the external dab+_ amivalnt +tn 191 nP eortn"+ neninps in 1960 and 19113 in 1961. In 1963 it falls below 101o, and to much lower proportions in subsequent 8.a s. copihet fteps fwyas h lxblt n adaptability which the economy has shown, the prospects of foreign financial ~~o ~-inn cI-a -1. th b, nra'gr,r_nab, - u, rs ---, AI~-rrn4- ,r n.,n4- -,an.rleA , that long-term borrowing to finance high priority projects essential for the atoii continue4 t 4oo m4ua, I- anag e-m of04 thA 4-e dm o '1 nsrae 4 ,, CU'CL~~~ IIWU. UL)LU .C U O A~J~4 LLC- PU LJ ~Li, JJI _L U ~L L 11 LC '. JIU_LaLL authorities continue the good management of the economy demonstrated by the I. ECONOMIC DEVELOPMENTS, 1957-1959 1. Since 1957 Colombian economic policy has had two primary objec- tives: to repay nearly $400 million in commercial arrears and to stabilize the economy, which was subject to strong inflationary pressures. On both counts, the Colombian efforts were remarkably successful. Within the limitations imposed by these two objectives, the Government also was concerned with the growth and diversification of the economy. A. Settlement of Commercial Arrears 2. The circumstances leading to the accumulation of commercial arrears were described in a previous report on Colombia (WH-92A, April 9, 1960). They resulted from the inability of thp montary anthorities to restrain imports in line with the decline in export proceeds when the post-war boom in cnffee nrices_ came on an end in loChi_ Tnt.prnnl inflqtion cnprati import pressures which were intensified by the maintenance of an official exchange rate which croosly overvalue +he nlnmbian nean in +.rma of other currencies. Payments for imports, services and interest and divi- dendsegan +o lag fr-m +he lae pof 15 1O1- -r 1017 when + ,he Government changed, the commercial backlog had reached a total of $h96 backlog finally assumed by the Government amounted to $392 million. Tn - -14--L 4-1,-, --P44-4- I ~.UL 4-_ A-1,4- (* I -4 .11-- d1-A. H supplier credits ($89 million), the total external indebtedness of Colombia U ULL 0J -6-LILLUlr 0±L _L7) VVL qPUU; 1AL.L.L±±±01* LIP-- Wz1U U_U1'11=1Q V0± ull ~u U ± arrears was accomplished through cash payments in dollars and other standing obligations was consolidated by official short-term and medium- Uea ±oanI. ine WoLaL U±ance outstanUing ab o± oanuaUy i, ±yu $171 million. This indicates that net repayments had reached $221 million over a perIoU of three years. Net repayments of bank and supplier credl us and of long-term debt amounted to an additional $44 million over the same period. CHANGES 1N THE TUXAL EXTERNAL DEBT OF COLONBIA (January 1, 1957 - January 1, 1960) (In millions of U.S. dollar equivalents) January 1 1957 1958 959 19b0 Long-term debt 188 174 164 182 Private bank and supplier credits 89 75 66 51 Private debt (assumed by the Government in 1957) 392 - - - Balance of payments credits to refinance private debt - 195 226 171 IVIt.LU £iLlul 007 LJ4J 4J L4'.L4- 3. The amortization schedules of presently outstanding balance of payments credits call for their full repayment by 1966. However, amortization payments on the presently outstanding debt -- which between now and 1964 amount to about $30 million a year -- are scheduled to decline to half as much in 1965. B. Economic Readjustment after 1957 4. The magnitude of the national effort required by the settlement of the commercial arrears was intensified by two circumstances. At the outset the Colombian economy was, on the one hand, subject to strong inflationary nressures, the nntrol of which rnuired monetary and nredit restraints beyond those made necessary by the repayment process itself. On the othor hand, +the eonomy s onfonted writh +.h nPeessity nf adapting itself to a much lower level of imports, not only because of the exchange earnings themselves were rapidly falling as a result of lower depressing effect on the inccme of the coffee-producing sector and an LLI Plct, 'i il-Uput-uU (- uO pOf ; W ithL U1t ±L7' '( -LuudJt.LU11_II L' La the devaluation of the Colombian peso; the establishment of a rigid control on su.PUo3 cgeu_ taxeU, payale in IUreIg UcUXIUe, on o u VI foreign exchange transfers, the proceeds of which were destined to cover the service of the external debt; and imitations on credit expanson through increases in legal reserve requirements. Another important measure was the transfer, and consequent sterilization, of a large sum of prior import deposits in pesos from commercial banks to the central bank. In the fiscal field, substantial surpluses were obtained in 1958 and 1959., 6. The effects of the new policies were soon felt, Imports were sharply reduced, from $605 million in 1956 to $454 million in 1957 and ,P304 million in 1950. Thus the release of the necessary resources for the repayment of the commercial arrears became possible notwithstanding the decline in export earnings. In 1957 the balance of payments closed for the first time in four years with a substantial ($87 million) surplus on current account; surpluses of smaller magnitude (433 million and $64 million) were obtained in 1958 and 1959. Official gold and foreign exchange reserves recovered from their low of $144 million at the end of 1956, increasing to $155 million by the end of 1957 and to $170 million by the end of 1958. 7. The anti-inflationary impact of stricter commercial bank reserve requirements was initially reinforced by the payment by importers of their accumulated foreign exchange obligations and by the sterilization, through their transfer from the commercial banks to the Central Bank, of large amounts of prior import deposits. Still, inflationary pressures continued throughout 1958, when the cost of living index rose by 14.6%. During 1959 the increase amounted to 7.8%. " 3 - 8. Until recently, the declines in real output which the official statistics showed for 1957 and 1958 (3.7% and 2.8% respectively) in compar- ison with 19c6 levels were %Pneraliv ntt.riHited to the credit and imnort restrictions in effect since 1957. However, revised series recently made nailable mi TahlQ s R, 0 cl) ho that drling 107 and 9CA tnal arns domestic product actually increased at about the same rate as population more, the new series indicate that the slowing down in the rate of economic to an end) and therefore preceded by at least two years the new anti- .LJ.LU1CU ,Y U%, LU11UL TiheZ~ l ower rates. Of. grw-1,11 UU.tLl L.L 4,.llro 1958 must then be attributed as much to the direct impact of the reduction in exchange earinings following the enu o the coftee Uoom as to the are and import restrictions. The new series also disclose that in 1959 gross domestic product in real terms increased by almost 6%, a rate whiE s comparable to those attained by Colombia during the early 1950's when coffee prices and exchange earnings were on the upswing. The satisfactory performance of the Colombian economy during a three-year period when net repayments abroad amounted to $265 million, points to its basic strength and suggests excellent self-sustained growth possibilities once the burden of the presently outstanding short-term external debt has disappearea. 9o The factors that made it possible for the Colombian economy to adapt itself to a much lower level of exports and imports and still continue to expand, even if at a reduced rate, were the maintenance of investment at a fairly high rate, changes in the composition of imports, and the replacement of some imports by domestic production. Investment Levels 10. According to the revised estimates gross domestic investment was very high and showed a tendency to increase until 1956 (Cf. Table 6). Investments during 1954 to 1956 represented on the average over 25% of gross domestic product. The larae additional productive capacity built during these years became available at about the time when export earnings began to fall and made it possible to replace imports which had become more expensive, or were no longer licenced. After 1956 domestic investment abruptly dropped (from 23.7% of GDP in 1956 to 17.0% in 1957, and 16.1% in 1958) as a result of lower imports of capital goods. Building constrc.c- tion and other tyoes of investment remained in the aaregate at about the same absolute levels. In 1959 a spurt in urban construction, the real value of which rose by 221. (ie. from about 825 million pesos at 1958 prices in 1956-1958 to 1,010 million pesos in 1959) greatly contributed to the high nrformann, of +.he nPonomy in that var. -4 - REAL GROSS DCMESTIC PRODUCT, GROSS FIXED DOHESTIC INVEST.ENT AND INTERNATIONAL TRADE. 1950-1959 /1 Gross Domestic Gross Fixed Prmdnet. nomestic Exnorts Imnorts (Annual Changes) Investment (Annual Changes: 1951 +2.7 18.0 + 5.2 + 3.1 1953 +5.6 23.1 +27.6 +33.6 1955 +3.8 25.9 -11.5 - 0.7 -LLW j1 r Cj f _J..J.. r_ 1957 +3.1 17.0 -12.9 -27.3 T n~r'Q + 1 . ,-i,( . .7_?r 2e- -L7:;u tL.U _L LVJ,)_ 1959 +5.5 16.6 + 3.7 + 4.0 PI no - I Cfl _L U au±e 4, unangez in e porus and impors based on dollar data deflated by wholesale prices in the U.S. Composition of Imports 11. Reflecting the growing industrialization of the country and its greater economic self-sufficiency, the commodity composition of Colombian imports had been changing for several years before the adoption of the new economic policies in 1957. As these policies went into effect and the import level was reduced, raw material imports increased by nearly 101 while all other categories of imports went down. As pointed out before, the reduction in capital goods imports was particularly severe. The additional reduction in imports which occurred in 1958, however, affected mainly imports of raw materials. Nevertheless, industrial output continued to expand. This was made possible by drawing down existing inventGries in an amount estimated at about $30 million. Precise information on the composition of imports after 1958 is not available, but it is known that in 1959 the textile industry was allowed to import equipment to expand its capacity IPORTS BY MAJOR COMMODITY GROUPS, 1955 - 1958 Percentage In millions US $ Change % Total imports 1955 1956 19571957 1955-58 1955 1958 Total 669 605 454 384 -42 100 100 Uons-mription, goods 107 72 ie 14L ' ---U-U1 Raw materials 207 218 236 153 -26 31 40 Capital goods 328 291 159 10 -0 U9 L43 Fuels 27 24 18 12 -55 4 3 Source: ECLA on the basis of official data. Dollar values computed by applying percentages total value of imnorts. h' -r 1 (Y Thp M-v c)? 1 A-rc nf iryn-+c 4ii-ei r)& 10ffQ mn-tr ht%a ne rin.n 'r)-r rn-ni T)Il by the pressure to replenish inventories. Substitution of Imports 12. Both the industrial and agricultural sectors in Colombia have shown -LIU M'' 11 t U..IL ±L-L-L, U U J -)V-L A e su b t- L I± U L~ £U.1 J1L J IIPV. bU R:' JVIfI IU l1' L U.;- td5t CL,CL which helps to explain the performance of the Colombian economy in the face o1 surinkng international trade. A recently compiled index reveaLS una'u between 1950 and 1959 the volume of industrial output increased at the average cormpounyi rate of 70 per year. The average expansion was slightly lower after 1955. CIINGrS IN THE VOLUME OF ITUSTRIAL PODUCTION, 1950-1959 o Increase per Year 1950-55 + 7.7 1956 + 8.3 1957 + 5.5 1958 + 4.3 1959 + 7.0 The manufacturing sector was thus able to supply an increasing proportion of both finished consumer goods and of some of the intermediate P.oods required by industry itself. Of course, import restrictions and the hiaher cost of imports, following devaluation, spurred both the demand for, and the supply of, those commodities that could be produced domestically. The measure in which the manufacturing and apricultural sectors contributed to supplying domestic needs is shown in the following table. ADJUSTHENT OF IDUSTRIAL SrCTCR TO Pr;CTTON O' PAV MAT.RTAT. TPORTS, 1947-1948 (In millions US 3) Reduction Compensated by in imports *omestic TIvenry toer 19q7-4 Output Depletion Consumption 0 L,Ia. / ~- _54 . 0. . Agricultural raw materials .4 7.2 3.7 0;5 Vats and oils 4.4 2.7 1.4 U.3 Foodstuffs 4.1 2.0 1.5 0.6 VLLeral ProucTls .u0 0.1 U.2 Chemicals 15.8 2.8 11.8 1.2 Ruber products 0.- - U.6 Wood, paper and cork 5.3 2.3 2.6 0.1 lextiles 11.6 0.5 2.3 0.0 Metals 9.9 I.6 4.3 1.0 Other 3.1 1.6 1.0 0.5 Source: National Association of Industrialists: The Substitution of Raw PLat e r ia Impo rts-. Bogota, JrulyI -19r59. 13. During the second half of 1959 it seemed probable that the balance or international payments would close Vlth a deflcit anl that a sustuantial loss in official gold and foreign exchange reserves would occur. Concerned about this possibility, the Colombian Government negotiated in Tovember 15 9 a stand-by arrangement for $"1.25 million with the International Monetary Fund in addition, the Eximbank granted Colombia a $25.0 million loan repayable in four years beginning January 1964 and a group of twelve U.S. commercial banks extended o26 million in new credits repayable over a period of five years beginning in 1960. 14. Contrary to expectations, the 1959 balance of payments showed a surplus, reflected in an increase of M3 million in official gold and foreign exchange reserves and a net reduction of 30 million in official short-term liabilities.(Cf. Table 13). Among the factors that contributed to this result was an unusually high volume of coffee exports, some increase in the flow of foreign private short-term and long-term capital, but particularly a much lower level of import payments than expected, since foreign exporters resumed granting short-term commercial credit to Colombian importers who in recent years had to pay cash, or even make advance payments for their purchases. The International Monetary Tund has estimated that these credits amounted to over b)1 million. The improvement in the external credit of Colombia can be seen in the quotations of Colombian external bonds. Prices of government bonds (3%, 1940-70, par value %100) traded in New York increased by about 15% between 1958 and 1959 and by a similar percentage in 1960. As of 17ovember 7, 1960, these bonds were quoted at $751 to vield 6.4% to maturity. 15. The peso free market rate which during the first half of 1959 fluctuated around the level of T.8 per dollar. began to appreciate ranidly and by the end of the year was about P. 6.80 per dollar. The appreciation of the peso must be attributed mainly to a lowerine of the official surrender value of coffee from 75 per bag of 70 kg. to $6930 Since exchanee surrender reouirmPnts lirl. heii hihbr thAn 5l nroceel,. t.he measure meant that the demand for dollars in the free market was reduced. Other contributing factors may have been an inflmw of nrivate long-term and short-term capital. - 7 - II. THE CURRENT ECONOMIC SITUATION Monetary Develonments. __ Thp nrrrnt year haq been characterized by a higher degree of price stability than any similar period since 1955. During the first seven month nf 1Q60 the national inda of t.holesale nrines increased by only 2.2%; consumer prices in Bogota, by slightly over 40. This was clear- ly% t.he Teacil nf +1I nr , . )g t1 , +rin. TrnP+qr-- an-f- credit. noli- cies put into effect in 1957. The tightness of the control is shown by the fact that over the telve montha period ended in Tily 1(Nn mnnpv supply increased by only 2% and that since December 1959 it actually marginal reserve requirements, an increase of perhaps Ps. 300 million in expected for the balance of the year. 17. Monetary Effect of Government Operations. The precise mone- tary impact of governnient operations in CUolo-Mbia is, diffic_U_LtL to assess due to peculiarities of fiscal accounts. Budgeted revenues include aseed taxes rather than actual collectlons; expenditures Include appropriations to reserve funds for use in later budget periods but ex- clu1 disbursements for expenditures authorized in previous buUgets. New, adjusted fiscal statistics are being compiled by the Bureau of the Budget. These circumstances account for substantial variations in estimaues of results of fiscal operations. A recent estimate prepared by the Interna- tional Monetary Fund shows surpluses or P. 17 million in la, r. 114 mil- lion in 1958 and P. 173 million in 1959. Projections for 1960 indicate a possible surplus of P. 125 million for the current year. Banking sta- tistics show that, as in 1958 and 1959, during the first half of 1960 fiscal operations were anti-inflationary since reductions in the public sector indebtedness to the banking system tended to offset credit exten- sions to the private sector. Financing of coffee surpluses did not require central bank assistance since the retention system in use, which relies on taxes payable in kind by exporters, proved to be adequate. 18. Public Sector Finance. The 1961 budget, recently submitted to Congress, for the first time incorporates preliminary estimates of the financial operations of the public sector as a whole. These estimates show a high level of public savings and large surpluses for the past three years. (Table 9). PTTRTTr qFrTOR FTNANCE (T ~ ~ ~ -4 111n Unc c (Estimate) Current Expenditures 2069 2227 2599 2878 Reserves 20 53 150 110 .,d['a.L t1.es uces jl .LInveSU1IIt:, LlU Lu) LI. I ) 1.2 7 7 L1 J- Total Public Investment 959 1161 1382 1483 1113 01- Jt-'_LU \-J 7 7 -L-4 _LI L~ 19. The Four-Year Public Investment Program. The law that established ute Admanistrative Department for Planning nd Technical Services insuructeU it to prepare a four-year investment program covering the capital expen- ditures of the national government, municipalities and decentralized state enterprises. In line with this legal requirement the Planning Department distributed early in 1960 some preliminary figures and an analysis of planied investment expenditures by the national government and the major autonornous state enterprises o%rer the period 1961-1965. Both the total estimate of public investment and the breakdown by branches of the national government and autonomous enterprises have been revised since, but the latest figures still must be considered as highly tentative. The detailed program has not been presented yet to Congress. Some major revised aggregates were, however, given to Congress in the 1960 Report of the Director of the Planning Department and in the 1961 budget. According to these sources, total public sector investments would be increased at the rate of 8 % per year; recurrent expenditures are projected to increase at a rate of 3 1/2 % per year. CONSOLIDATED BUDGET OF THE PUBLIC SECTOR ( in millions of 1960 Pesos) 1961 1962 1963 1964 Total exnenditures 4360 4578 4807 5047 Current expenditures 272 2976 3077 3184 Investment expenditures 1482 1602 1730 1863 " by National Government 802 870 940 1010 " by rest of public sector 680 732 790 853 20. Table 10 presents the latest version of the program distinguish- ing investments by function. The figures in the table are a simple adjust- ment of current olans by the various Ministries and autonomous enterorises. The main purpose of the adjustment was to accelerate the completion of nroipnts alreadv start.a Tn this end prnsrnnd aPpnnrnnrtions for npm projects were reduced and the respective amounts shifted to permit com- J. UiL±f " on o' ' vestments 'r 2--rest-Ing .eiuy 21, incomplete information on output indicaues improvemnenu In muo sectors. Ariculture. Prospects for the current agricultural year are good. Cotton, sugar cane, tobacco and soybeans are expected to be larger than last year. Only the production of rye was adversely affected by weather conditions, and lower acreages were devoted to potatoes. Fore- casts for the current coffee crop indicate a production about 5% above 1959/60 levels. Sugar, cotton and soy bean production has shown a remarK- able expansion. Increased sugar cane production in the Cauca Valley will raise output to 300,000 tons of sugar, with about 30,000 tons available for export. A similar situation prevails in regard to cotton, an imported commodity until 1958. During 1960 cotton exports are estimated to reach $7 million. Soybean production in the Cauca Valley has also greatly expanded and is contributing to reduce the still large imports of fats and oils (approximately $10 million in 1960). Since early 1959 commercial credit to the agricultural sector has been directed in incr6asing propor- tions to other crops than coffee. Manufacturing. On the basis of employ- ment irdexes, output levels in the manufacturing sector seem to be expand- ing at a rate similar to that of 1959, when total output increased by 6.9% A new index of physical 7olume of manufacturing outrut shows the trends in output levels by major groups of industries. INDEX OF PHYSICAL VOLUtE OF INDUSTRIAL OUTPUT Average nercentage yearly increase 1950-1954 1954-1958 1958-1959 Food 8-6 3.6 3.7 Beverages 9.7 0.4 6,.o Tobacco 3.4 3.1 2.6 Textiles 9.2 6.5 6,8 Footwear and clothing 7.9 7.2 12 7 Lumber and Furniture 5.2 13.7 1.7 Panpr and wnr nnin 22.5 671 18.3 Printing 13.7 8.1 3.5 Lather 3. 6.0 - A.0 Rubber 18.2 10.0 4.5 Chemirl 12(6 A-1 1n Petroleum refining 7.1 29.8 11.4 Nornmetalic minramls! 6.5 Q~ 21.3 Metals 3.5 82.1 - 8.9 Mn-ani-a- indu-tries -17.1 00.0 Inj1 All industries 9.1 6.6 6.9 Specific information on output during the first half of 1960 is available 4L.L Ouilt- L11P%1_L-UC.1U _L1LU.U0UJ.LU,.. UUUM5I111U j1J.UUUU IIUL ULILIAr UUUt 1I1 IDU I11 J_" - 10 - was 9.2% higher than during the same period of last year. A new cement plant started operations in February in the Department of Tolima and another is expected to start before the end of the year in Boyaca. Several expansions of existing plants are being programmed. The textile industry operated at a level 14.3% above that of the first half of 1979. The cotton industry imported equipment which raised its productive capacity by over 10%. Paz del Rio, operating now near full capacity, increased its output of steel ingots by 87%. Wood-puln output. following the establishment of a new wood-pulp plant, increased this year by 274%; kraft paper and cardboard registered increases of q% and li'. rPnntively. Th rhpe.mirq1 inrnatry i. ranirfly exnandinq and new plants to produce superphosphates, celophane, citric and sulphuric acid and many other nheminnds Pre Pitlhr nhmit. to st.rt onerat.ions or in f,hp planning stage. Tlinihg. During the first half of 1960 crude petroleum output inrrp.Ar hv 1194 over +.hF r'omna-nbl npyinr of r-q vr- Thi iq I qrpely due to more intensive exploitation of an existing oil field (Cicuco of Colombian Pe.nrleum) rld ntn+ ineansed by 2Ob%, reaching +.h t+.na of +.q Il6 trov ounces as against 181.000 during the first half of 1959. Coal production is also reported. incr ea Si ng bDut no p r o duc1nt i on figEsf ar nvailnble. Balance of Pa,yments. 22o- TD-le bJalanc oiy, in ~tern.I a tial. ±j-'ymesL cosiue mni- f-t restraining the expansion of the Colombian economy. During 1960 import regul 4 ___~ -- 4. 4- - --I -' -L 4- L '4 - - - 'J P- .i - ULr 4 - -',,-4 ,- -~.1 l - "V F' -F.1. market may average '37 million a month as against '31 million during 1959. 111.L iJI.L-11 _111pi -t'~ _LUVe±% clutUk U UAt7-~ U.. UVJ kAJV I.L ULifJ L_LU _LJUjJU.ILI U reF ) UJ. _ tions granted during 1959 (Cf. p. li) plus heavy service payments on the extecal Urt alnd long-term obligabions ld in 17u to a -ubstantial loss in official gold and foreign Foreign Exchange Position, Official Market, 1959 and stimate for 1960. (Estiuate) 1959V 1960 Receipts 494ta 153 Petroleum and Miscellaneous 56 60 Iransf±ers ro F.UIII JMari~U'K.ut U Uses )4U9 453 Import payments 284 340 Services and Miscellaneous 56 58 Long-term debt Amortization 32 29 Interest 19 17 Transfers to free market 18 9 Changes in official reserves and short- term liabilities. + 85 - Official Reserves + 54 -58 Meduction in short-term liabilities + 31 +5o /1 Fiures in this column are a rearrangement of official data in M,tJJ 4-1 -1) exchang rs%Ves I~v~u Vwt "'Wte overa'll_ eXte1r(a_l adUn[1ts pU3.Ltio U1 t11le country was not unfavorable since short-term official liabilities, through repayiienus, Ueclined by a similar amount. under a stand-by arrangement approved by the Board of the ITF on November 2, 1960 Colombia may draw up to 6o million over a period of 12 months. At the close of the year the stand-by had not been utilized. !I!. Prospects of the Colombian Economy A. Balance of Payments 23. A review of the various elements bearing on the future of the inter- national accounts of Colombia suggests that over the next few vears equilibriu- will require that the expansion of the import level be carefully restrained. a consequence, the growth of the Colombian economy may be somewhat limited. This situation will gradually improve as the country advances torTard the substitution of commodities now imported and as exchange earnings from exoorts other than coffee increase. Import substitution possibilities are particularli promising in regard to rye, wheat, corn, cacao, copra and animal fats, which today absorb over $25 million a year. As to exports, their tendency to increaF is already apparent both in the case of some of the traditional commodities, such as crude petroleum, and in some of the so-called minor exports which in 1960 are expected to produce approximately 125 million as against '16 million in 1959. This trend is likely to continue in view of the present official Foreign Exchange larninps on Current Account. 1959-60 and Projection for 1965. (Tn millions of dn11rs) loo 1o(n loAC (Estimate) (Projectior Major Exports lh4 433 1:45 Cof f ee 0)14 ,- Petroleum, fuel oil, baq_nnas andl gold 110 1214 14 Tobacco -2 3 3 Cotton 7 10 fl+1-~ 1212 2 Border" TPrde 69 r0 _ IVe a C oie - 4- 7 _- - U VkL. yJI WJ±ty 2'j'JJU o 5Uo interest in trade promotion and the possible adoption of specific measures such as removal of export prohibitions, simplification of export procedures and introduction of tax inducements. However, projected gains in exports of cumiUd1ieij ueUr than coffee Lil be partly offset by a pOSSie decine in the dollar value of coffee exports even if coffee prices are not permitted to fall precipitously. In balance, commodity exports are projected to increse by $4o million over the next five years, or approximately 2% per year. 24. A more important factor pointing to the future improvement of the international accounts of Colombia is the repayment of the presently outstand- ing short-term international obligations of Colombia. The impact of this development will, however, be felt only four years from now. Until 196. the debt service (interest and amortization) of the short-term external debt will absorb approximately $35 million a year; in 1965, payments will be reduced in half, and they will disappear entirely after a final payment of A8 million in 1966. 25. Finally, in appraising the future of the Colombian balance of pay- ments, account must be taken of the possibility of an increasing flow of foreign private investments attracted by a favorable "climate" and by expanding profit opportunities, and the likelihood of external assistance in the form of grants and "soft" external loans. In addition to ICA loans repayable in pesos of which Colombia has already received 16 million, the Development Loan Fund recently announced a S25 million loan, the terms of which have not been settled but which are likely to be "soft." The "Soft Loan" department of the Inter-American Development Bank and the Special Fund of $500 million to be established under the provisions of the Act of PoFota are also likely to provide financial assistance to Colombia on liberal terms. B. Capacity to Serve the External Debt 26. On January 1, 1960, the total external debt of Colombia amounted. to hOh million. Of this total 0189 million reotn Inng-+m olinio+insc $51 million private bank and supplier credits, and $171 million balance of pavments credits inn17rrpr fo t.n.ea the 107 onmmercial arrears. T I^n lon including undisbursed amounts, represented A115 million or nearly two-thirds of the total Colombian Inn-aterm deb+ In I6oAn +hs -pto a- - risd to nearly three-fourths, as new loans for "48 million were granted. No other Eximbank announced the earmarking of ) million for lending to Colombia. Simultanousiv, the nbeicpmen Loan land an a 1 mlon 'loan t be used to finance projects of a "social" nature. Feither the terms of th(:.sR lonsn., nor their specific use have I-- -*~*~- scheduled for 1960 are )72 million, including '17 million in interest. 27. A comparison between projected foreign earnings (Appendix A) vy Lu on y Um Uiiuv ULLu0Lot1iULtg CGU 1JUHL iJL.1bolS 01 UOL oMoL (Table 3) shows that the debt-service ratio, which for the current year is in the neighborhood of' , ops to slighy over 1u0 by 1962. From 1963 on the ratio declines rapidly, falling below 6% by 1965. - 13 - DEBT SERVICE RATIOS Estimated current Service Payments Debt foreign exchange on outstanding Service earnings /1 debt /2 Ratio (millions of US$) o 1957 682 72 10.5 1959 615 129 21.0 1962 622 66 lo.6 193 63-5 61) 9." 1964 649 56 8.6 196> 004 39 IV A qn- Ap-i n,rA-;, A TT'l-,- .4h n ,.,n + Cv.r v, c,n,. between 1960 and 1965 ($64 million) has been allocated to the inter- $13 million; 1964 $14 million and 1965 $15 million. Includes all debts shown in Table 3 and service on IBRD loans of p4d million gra-ed in 1960. C. Economic Growth Prospects 28. Perhaps the most striking feature of the Colombian economy, as revealed by developments over the past three or four years, has been its ability to continue its growth in spite of strongly unfavorable external developments. Several reasons account for it: the great diver- sity and extent of the countryts natural resources with the opportunities for their use rapidly increasing as the economy expands; the gradual inte- gration of the economy as the pattern of relatively small, isolated, and self-sufficient regions and markets is broken by the spread of transport facilities; and the drive and energy of a dynamic and able entrepreneurial and professional class bent on developing the country, 29. Conditions for economic growth over the next five years thus appear more favorable than those that have prevailed since 1957. Export prospects, although not overly bright, are relatively promising. The official attitude toward export promotion is now a positive one and definite steps to promote exports are under serious consideration. Import substitution possibilities both in agriculture and industry are also extensive. Current plans call for measures to attain self-sufficiency in a number of important agricultural commodities. Finally, the expanding canacity of the domestic canital goods industry (Table 6). - lb4 - the greater margin of forei7n exchange available for the purchase of imports should allow Colombia to maintain rates of economic growth higher than those of the period 1957-1958. If, in addition, Colombia receives external assistane as envisaged in paragraph 25 ra tes- of economic growth similar to that recorded for 1959 would very likely be attained. D. Social Stability 30. Like most latin American countries, Colombia is confronted with social problems traceable to the poverty of large grouns of the nonulation. In Colombia these problems are perhaps more pronounced because of the extremel- unequal distribution of landed nroprty- and WAlt.h in onPr -i The rovernmen is, however, aware of the potential threat to political stabilitr - implicit in the present situation anrr is +king steps to allenvae and uitimat -r +n Yme- it. Thus, the four-year public investment proTram now under study, although emphasizing basic prnodtive inve+mens+ aloan nilloctsesouce t housing projects, education, public health, municipal services and to the opening of new lpnds for onlonizai+.nn recently comrleted by a aroup representative of the various sectors of Colombia life AltLough thei oriisionseof substantial changes before it is enacted into law, and the effect of the reform meo0u-e will vea7y 'uch Ueend O te reguations implemenUil P tih laW, it is already clear that it will have an important stabilizing effect in the social. and. po14cal areas. A sulmary u the bilL is presented in Aeen?.ix B. Some idea of the magnitude of the problem arising from the present distribu- tion of land may be thnered by the fact that out of Z7.7 mlillon hectares (1 hectare= 2.47 acres) of occupied land (one fourth of the national territory' 1.2 m.lUin, or over 4, is in landholdings of more than 500 hectares, or which there are approximately 8,000. On the other hand there are 486,000 tmanu1uJuugs of less than 10 hectares including 162,000 of less than one hectare. The 486,000 holdings account for less than 7') of the occupied land. The present Landholding system is said to lead to the uneconomic use of land resources, but no claim has been made that the proposed land reform will bring aoout in short order an increase in agricultural output, - 15 - IV. CR7DITWORTHINESS 32. In appraising Colombia's creditworthiness the experience of the past three or four years, when its economy operated under unusually difficult conditions, is particularly relevant. During this period the Colombian authorities displayed a high degree of ability in the management of the economy and, with a clear idea of ultimate objectives, adopted and pursued monetary, credit and fiscal policies which brought economic stability and allowed the country to overcams one. of its worst economic crises. The managerial and professional groups cooperated. and through their efforts contributed to diversify and, within the limits set by external conditions, to expand the econormy. The strong popular support enjoyed by the Government contributed to making the new economic nolicies generally acceptable. The continuation of the economic policies and entrepreneurial leadership of the past few ven-s in a nountry hasically rich in resonvens under imuroved external conditions, should assure Colombia of a satisfactory rate of economin rrmawt.b Ib n Y)e, r f~ -nnn-o i .~ Q r)N _ r . nn +straine.4, q. +Jip nrP..ent, time, offers good prospects of improvement. Current foreign exchange earnings it does offer a margin to cover the increasing import requirements of an expanding economy. h exera position shou_ldLb _L_LI'::;I greater flow of foreign private capital attracted by the favorable climate and good profit opportuluies available in Colombia and by the repayment, by the end of 1965, of the now burdensome short-term indebtedness. The scheduled urviing on his debtrepresents approximately 12o of expecuted foreign exchange earnings until 1962; it declines to less than 10% in 1Y3 and to less than O by 1965. It should or course be recognized that thia projection is based on the assumption that the Torld coffee surpluses will not lead to an abrupt and precipitous decline in cofree prices. 34. The accomplishments of the past few years, the flexibility and adaptability which the economy has shown, the prospects of foreign financial assistance and the manageable size of the debt service 1arrant the conclusion that long-term borrowing to finance high priority projects essential for the country's economic development should be possible, provided the Colombian authorities continue the good management of the economy demonstrated by the fiscal and monetary policies that have been followed since 1957. 0 E <4 CCp >~ I-I O Table A-1 APPENDIX A FORETGN EXCHANGE EARNINS ON CURRENT ACCOUNT 1956-1960 AND FROJECTION FOR 1965 (In llions of U.S. DollarsT 1960 1965 1956 1957 195 1959 Estimate){roection) Major Emorts 644.6 523.2 469,9 443.6 433..1x 4445 Coffee 529.2 408.9 366.2 334.0 311.9 301.0 Crude Petroleun 69.9 76.3 66.6 73.3 83.2 102.5 Fuel Oil 2.7 4,9 10.1 8.7 7.8 8.5 Bananas 28.1 21.9 15.0 13.9 15.5 16,0 Gold 14.7 11.2 12.0 13.7 15.0 16.5 Minor IEports 23.8 17.9 17.4 16.3 25.3 38.,5 Tobacco 3.0 2.9 2.0 2.2 2.5 3..1 C eme nt 1.1 0.7 1.2 2.3 2.6 3.6 Shrimp 0.1 0.3 0.5 1.3 1.5 2.0 Lumber 1.2 0,,9 1.3 1.4 1.5 2.0 Cotton -- - - 7,0 10.0 Sugar 4.3 0,3 - - 1.0 5.8 Tanned hides 1.1 0.6 0.7 0.6 0.7 ) Medicinal roots ) (Ipecacuana) 0.6 O4 0.4 0.4 0.4 ) Machinery (coffee ) 12.0 mills) o.6 0,3 0.1 0.5 0.7 ) Platinum 2.1 1.5 2.2 1.4 1.4 ) Other commodities 9.7 10,0 9.0 6.2 6.0 ) Border Trade - 60,0 55.0 69.0 50.0 50.0 (cont-'f) (Table A-1 cont ' d) APPENDIX A 1960 1965 1956 1957 1958 1959 _P_Etiatc _Prection) Conmoditie s likely to be exported in futmre years - 15.5 Coal -- 8.0 Amnonia - 2.7 Carbon black - - - 0.8 Beef - 4,.0 TOTAL CO1U40DITY EXPO1RS 668.4 601.1 542.3 528.9 508.7 548.5 Earnings from Services 50.5 81.2 72.8 86.2 92.8 115.0 Transport and Insurance 26.6 32.0 32.9 46.0 50.0 Tourism & Travel 9.0 11.0 17.1 17.3 19.8 Other 22.9 38.2 22.8 22.9 23.0 TOTAL CURRENr EXCHANGE EARNIS 726.9 682.3 615.1 615.1 6c1.5 663.5 Source: National Statistics Department. Note: The 1960 estimates are based on actual exports for the first five months. Details for most import-- ant coaodities appear in Table A-2. The figure of $1.0 million for 1960 sugar exports is based on the assumption that approximately 15,,000 tons of sugar will be exported during the last quarter of the current year. TabLe A-2 APPENDIX A EXPOR'S OF MAJOR COIN ODIT IES January-May 1960 £/ 1965 1956 1957 1958 1959 1959 1960 12 months Projection Coffee Value US$ mill. 529.2 408.9 366.2 334.0 /2 136.4 122.5 311.9 301.0 Volume - mill 60 kg. bags 5.8 5.1 5.6 5.9 2.4 2.2 5.6 6.6 Unit Price-.US per bag(fob) 91.7 80.6 65.2 56.5 57.0 55.7 55.7 45.6 Equivalent in cents per? lb. (cifNy) .74 .64 .52 .45 .45 .45 .45 .37 Crude Petroleum Value US$ mill., 69.9 76.3 66.6 73.3 27.9 35.7 83.2 102,5 Volume (mill. bl:. 28.9 28.4 24.4 28.5 10.9 13.8 32.0 41.0 Unit Price (US per bl.) 2.4 2.7 2.7 2.6 2.6 2.6 2.6 2.,5 Fuel Oil Value US$ mill. 2.7 4.9 10.1 8.7 3.4 3.0 7.8 8.5 Volume - mill. gallons 48.8 75.3 177.4 172.9 67.2 59.9 155.0 170.0 Unit Price-US cents per gallon 5.5 6.5 5.7 5.0 5.1 5.0 5.0 5.0 Bananas Value - US mill. 28.1 2L.9 15.0 13.9 6.9 7.4 15.5 16.0 Volurre - mill. of stems 9.5 8.3 8.2 9.5 5.3 4.6 8.6 8.0 Unit Price--US$ per sten 2.9 2.6 1.8 1.4 1.3 1.6 1.8 2.0 Tobacco Value - US$ mill. 3.0 2.9 2.0 2.2 1.4 1.8 2.5 3.1 Volume - thousand metric tons 5.2 5.7 4.5 5.5 3.5 4.6 6.4 7.9 Unit Price-US cents per kg. 57.7 50.9 44.4 40.0 40.C 39.1 39.0 39.0 Cement Value - US mill. 1.1 0.7 1.2 2.3 0.7 1.0 2.6 3.6 Volume - thousand metric t ons 65.1 52.3 127.3 225.4 54.6 95.9 250.0 350.0 Unit Price-US$ per metric ton :18.0 13.6 9.5 10.2 12.8 10.4 10.4 10.4 Shrimp Value - US$ mill. 0.1 0.3 0.5 1.3 0.4 0.6 1.5 2.0 Volume - tons 57. 221. 395 990 282 431 1100 1400 Unit Price-US$ per kg. 1.3 -1.4 1.2 1.3 1.4 1.4 1.4 1.4 Lumb er Value - US$ mill. 1.2 0.9 1.3 1.4 n/a n/a 1.5 2.0 Volume - thousand metric tons 6 55.2 59.9 n/a n/a 65.0 84.5 Unit Price-US$ per ton 19.3 35.2 23.6 23.3 n/a n/a 23.3 23.3 (cont i d) (Table A.-2 cont'd) APPENDIX A Source: Departamento Administrativo Nacional de Estadistica. /1 Estimate based on da.ta for first five months. /2 Excluding approximately 500,000 bags which were shipped by the Federation of Coffee Growers to its warehouses abroad. These shipments were officially recorded as exports. Estimated unrecorded exports are included. APPENDIX A NcES ON EXPORT PROJECTTONS Exprts during 10/r 0 wTere 150nilin bag ofr 6_0 An'.. i-vniir n+. million. Not included were approximately 500,000 bags shipped by the National abroad during 1960 have been lower than during 1959, because of price price differential, under discussion now, will restore the relative competitive POSJ.LII~ anUllo LLLw Co.IJlbia V) bu- Itsb quotu une the IterntLna Cofe Agreement. Still, total exports during calendar 1960 may be lower (say 5.6 milibon bags) than during 1959. Prices have, on the average, rUit::e pra- tically unchanged. Coffee exports have been projected to rise (from their average in 158/60) at the rate of Z,57o per year (as against an estimaued increase of world consumption of 3% per year). Prices in the mid-1960's may be approximately 37 cents U.S. per lb. CF New York for the Manizales variety, as against a current price of 4h to 45 cents. The mid-60's price is equivalent to $45.00 per 60 kg. bag FOB Colombia. Crude Petroleum and Fuel Oil lor ade peurl e ur, pruction UiIS I L-L1,0LW W 2 J.U1~ 5V of 1960 show an increase of 11 over the same period of 1959, explained largely by a- 1oreutesv CA:QLoitLat'_(Io of anlld oilL f)Ie-ldJ-U. Two fi.e-ldL reen loi- covered (Guavia, about 60 miles from Bogota, and Santos, in the Lebrija Uoncession of Intercol in the Department of Santander) and secondary recovEry operations to be undertaken point to a steady increase in output and exports in the next few years. The volume of crude petroleum exports has been pro- jected to increase at the rate of 5% per year; prices to drop by about 3%. Fuel oil exports may increase at a lower rate (2%), since existing refinery capacity will be fully utilized within the next three or four years. Bananas Dollar value of exports is projected for 1965 at a level similar to that W-L L'~* ..IALs proLjeL U_LtJJ11 Z t5jIjW CLPJJ.L)P _pL t Ut. _LJJU C±I A dL.J C;(2 U ..L u/I-LA. V LW ' are not expected to change to any extent over the next five years, as a result '/- u/JA..SUL VL UV-- F I Q V.t UJIC V.1 UIL L .1.I ". U VtSJIIPCLIAJ 11V. U UV J ' V -S .4 , -L'/1 /L- time being, plans to start operations in the Turbo region in the Gulf of Uraba, Gold Under the stimulus of a system of bonus payments to producers, established in 1959, and of a more favorable rate of exchange, gold production shows ina 1960 an increase of 23.5% over the level of last year. For this reason gold exports, which have remained stationary for several years, are projected to increase by another 10% over the next five years. Tobacco According to the Ministry of Development a market survey abroad has revealed that an expansion of tobacco exports is possible, arovided qualities are stand- ardized and methods of packaging and merchandizing are improved. The main markets at present are Germany, France and Holland, but the Ministry's inquiries indicate that potentially large markets exist in the United States, Great Britain and other countries. Exports of leaf tobacco to the -2- AYYLivuJiA At United States have shown a substantial increase during the current year and total tobacco-exports should be this year somewhat higher than in 1959, when they amounted to $2.3 million. The project assumes an increase or .5 per year. Cement Colombian cement enjoys a good international competitive position, its markets include Puerto Rico and the continental United States. Capacity is expanding so that the industry should be able to cover domestic needs and increase exports by about 150,000 tons in the next five years. Shrimp Shrimp exports to the United States have been increasing although their absolute value is still small. In view of cometition from other producing countries, the projection assumes a further increase of only 30i, or about 5.5% annually. over the next five years. Lumber Ex-norts of lumber. of which Colcmbia nroduces a very large variety. have also been projected to increase at the rate of 30% in the next five years. Cotton A successful promotion campaign has increased cotton output so that begainningc f-romn tAhe pos-it+ionnn- of a lareipote ( 0 ' m11 in 7 10 .l : attained self-sufficiency in 1959 and a surplus in 1960. Cotton exports during the f irs hl.4 A J J~ O. ofI~ unSte to.A &p 44) *7 --4.J-13Jon andjL tot, for U2.LL the year are estimated at $7.0 million, The projection assumes exports of -II -I n4f requirements are estimated at 270,000 tons, leaving an exportable surplus to perhaps 75,000 tons. The Government is considering joining the Inter- natonal Sugar Agreement in order to qualify for a quota in the United States. The projection assumes that by 1965 Colombia will be exporting small quantities of sugar. Other Minor Commodities Among the other minor commodities, some (e.g. raw hides, the exportation of which is now prohibited) constituted important export items in the past (W6 million in 1951). Exports of this group of commodities are projected to increase by 30% over the next five years. Border Trade This trade is not expected to increase in the next five years. APPENDIX A Commodities Likely to be Exported In The Next Few Years Coal A concession was recently granted by the Government for the exploitation for export of coal deposits at "Cerrajon" (La Goajira). The contract stipulates a minimum production of 1,000,000 tons, valued at approximately $8 million, by 1964. Exploitation of a new coal deposit at Timba, in the Cauca Valley, will begin at the end of this year. Part of the output of this deposit may also be destined to export markets. Ammonia A group of foreign and Colombian interests has decided to establish a plant to produce liquid ammonia, making use of natural gas from the refinery in Cartagena. The plant, with a daily capacity of about 300 tons, is scheduled to begin onerations in 1962- Out of this total it is estimated that 125 tons ($2.7 million) will be exported. Carbon Black International Petroleum Company is planning to produce 14 million lbs. of carbon black a year. About 1+, milio1ls.,!+ valne atn 80,00, +. be exported. Beef Beef exports, now prohibited, show good prospects once present restric- tions11 areremoVed and trade is organizead. Cattle suApp-ly isZ amle;Lt- Ome11 modern slaughter facilities are available (e.g. Barranquilla's packing- house with a capaciUy of 3u heau of catUle) anU ohUers will prouaUly Ve established in the near future, since several foreign firms have shown interest. Markets, at least in the first few years, would be limited to Venezuela, Central America, Caribbean Islands and Peru. Exports of $h milion bu-y ly965 appear quite feasileLU Services Gross earnings from transport and insurance services of Colombian enterprises have steadily risen in recent years. Tourist expenditures in Colombia also show definite signs of expansion. According to the Central Bank, receipts from tourism in 1959 were 77% above the level of 1957. The projection allows for an increase of 14.5% per year for earnings from all services. APPENDIX B AGRARIAN REFORM 69DOR?MTY R Ag- rrv- Pef- 1. The excessive concentration of landholdings in some areas, of ~IIL~LJ C~.LLC PJJ LL3 p-..LJ L U±o o _L11 V ullt5l 0, ci±LLL ULIA AL~ UIL. n JJe of~ "age nimbers of landless peasants in Colombia have been a constant source of concern becaus e of theiJr p otential as causes f or political instabicU__Llty an d social unrest. The need for agrarian reform has been recognized for a long t-ie, UtL no0 seiUs[JU attripts hlaVe bUen Made tO proceed' WithA it* 2. In an effort to find a solution of this fundamental prouem President Lleras appointed last August a special Agrarian Committee (Comite Agrario Nacional) and charged it with the responsibility or drafting an agrarian reform bill to be submitted to Congress. The Committee, made up of 20 members, consisted of representatives of the major sectors or public opinion, political parties, the Church, labor and agrarian groups, the Cabinet and interested government agencies, thus assuring that the bill would enjoy a measure of support in Congress. 3. On October 24, 1960, the Agrarian Committee completed its work and submitted to President Lleras a comprehensive agrarian reform bill. Colombian public opinion at all levels is prepared for some kind of reforn and therefore Congress will pass some agrarian reform law, but it is too early to say how closely it will follow the present project. Since it provides an interesting indication of the direction of national thinking on the subject of agrarian reform in Colombia, an attempt is here made to present the salient points of the 101 articles which make up the bill. h. As points reflecting the general approach of the Committee the following are of special importance: (a) The Committee interpreted agrarian reform as going beyond methods and procedures to improve agricultural output and productivity; it also rejected the notion that the existence of large areas of public lands makes it unnecessary in Colombia, in order to solve agrarian problems, to think in terms of expropriation and subdivision of existing large private holdings. Instead, the proposed statute creates mechanisms and procedures to profoundly transform the present state of land distribution in Colombia, making land available to many land- less peasants. (b) The Committee showed, however, constant concern for the conditions and limitations under which present land'.oldings can be eXproriated in oredro assureat adeqec. is offered. APPENDIX B Thp mbeti f t.he proposedi lnuw n-ri _qrl to be:. (a) To efor"m +.he arr in Qci n structe%+ byi nli4m +inr~ nnel preventing both land concentration and its excessive f.trmn at o n ; a,,. 10k-a1r CrNrn,1101an 1,,r W n .Q II nvn.C- 11rln1-- fragmentation exists and by facilitating the acquisition of b) T o open up new lands to cultivation, to increase agricultural output, to improve rural working conditions, to raise rural standards of living and to protect natural resources. 6. The following new institutions are proposed: (a) The Colombian Institute of Agrarian Reform, which is given the broadest powers to administer public lands and to carry out all the provisions of the agrarian reform law; (b) The Social Agrarian Council which will periodically examine the extent to whi-h the law is being implemented, reporting to the Government and to Congress on its findings; (c) The Agrarian Attorneys, appointed by the Attorney General, as official legal agents in all matters relating to the agrarian reform law; (d) The National Agrarian Fund, made up of: i. budget appropriations of PS.100 million per year and of the proceeds of internal and external loans; ii. Agrarian bonds to be issued by the government and to be used for payment of land acquired by.the Institute; iii. the yield resulting from increases in land taxes and taxes on anreciation of land values: iv- gants and donations; v. Simnfl5 rvP nnnpir n~r qozr-ir 1--i : r r-_jv.1 i~n n~nnnr n-f lands sold by the Institute; vi. properties acquired. 7. The substantive parts of the bill deal, among other things, with: (a) The circumstances under which a given landholding can be under which it can them be expropriated. Specific limitations are estUabis aLnLd VIto i v the c of vl are established and the owner is given the choice of voluntarily APPENDIX B selling at nrinq fixpd by indPen1nt. annrisers. Tn case of expropriation the Institute must deposit with the Banco d la Rennlic +the official appraial vaue pnu 90% Payment must be made partly in cash (in proportions varying with the Size of the o-peration) a-d -in agrariann bo-ds A mn-elra for the bonds will be developed as the bonds will be accepted bonds will be based on their market value. (b) he distribution of public lands, limiting further allocations, Uo a total of 4O hectares per holding. nestitinui5 ar imposed on the frontage in case of landholdings bordering highways and railway lines; (c) The procedures by which large landholdings can be broken up into colonization (settlement) units and by which small land- holdings can be grouped into economic units. (a) The procedures to be used for the colonization of new lands; the size of the colonization holdings, methods of payment, etc. (e) The specific procedures to be followed in the case of newly irrigated land including methods of compensating present owners, and their rights to purchase parts of the irrigated land. STATISTICAL AP?NDIX Table No. 1 External Public Debt Payable in Foreign Exchange, October 31, 1960 2 External Public Debt Outstanding Repayable in Local Currency as of December 31, 1959 3 Interest and Amortization Payments on External Public Debt 1957-1970 4 Supply and Use of Resources, 1950-1959 5 Industrial Oririn of Gross Domestic Product, 1950-1959 6 Gross Domestic Fixed Capital Formation, 1950-1959 7 Central Bank Credit. 19 7-196O 8 Money Sunnlv and Commercial Bank Credit. 1957-1960 9 Pnbhlic ectonr Pinncnp- IQP196 10 GorPerTmnt+ Tn1TmPTnn. h-, Punc.tion,- 19 7-60 nd in Four Year Plan, 1961-64 11 Four Year Public Investment Plan: Allocation of 1 t,<1 .T-,,~-+- - I. A - - 10r7_A0 n,-A 4nr 7nii",v Ytnn Plan, 1961-64 13 Balance of Payments, 1956-1959 1 Balance of Payments 1959 - Type of Transactions 15 Foreign Exchange Position, Official Market, 1959 and E k1U11CLCU J9.VI L71JV Table 1: EXTERNAL PUBLIC DEBT PAYABIE IN FOREIGN EXCHANGE AS OF DECEiBMER 31, 1959 VITH 1,]AOR REPFORT-DADLTN OOCOE 116' 'in thousands of U.S. dollar equivalents) Debt out- standiig Item Out- plus un- standing 3isbur5ed TOTAL EXTERNAL PUBLIC DEBT AS OF DECEMBER 31, 1959 360 O00 366,819 Balance of payments credits 171,020 171,020 Export-Import Bank 119,000 119,000 Notes 14,907 14,907 U.S. commercial banks 25,790 25,790 Other 11,323 11,323 Lcng-term debt 137,823 164,639 Publicly-issued bonds 55,769 55,769 IBRD loans 70,693 97,509 Export-Import Bank 11,361 11,361 Medium-term debt (private bank and suppliers' l 5160 51,160 credits) /- MAJOR REPORTED ADDITIONS TO OCTOBER 31, 1960" 480200 IBRD loans 48.000 a As of December 31, 1959, with major reported additions to October 31,1960. /b Excludes $45,000,000 Export-Import Bank credit not yet utilized. IDU'U11kiz, P Quilufll~c 01U11L m~~~ -- -t,l txslr txrrf, Ar T~~rl , T- rn ~,m,f .r T-r -l Ar fyi T 7eri. A7 TabDlc 2: UUAPIl AihttLM&L rUDlLIU JZD1 UU1,i1-1UdAV1W rL_1-RJ..KD1, _UY tULuti.j CURRENCY AS OF DECE1BER 31, 1959 (in thousands of US dollar equivalents) Debt out- Out- standing Item standing plus un- disbursed TOTAL EXTERNAL DEBT REPAYABLE IN LOCAL CURRENCY 15,168 1,180 Debt repayable in Pesos or U.S. dollars 15,168 25,380 ICA loan 3-5%. 1956 - 1982 8.984 10,000 ICA loan 3-5%, 1958 - 1983 5,637 12,240 ICA loan 4-5%. 1959 - 198L 547 3.1)40 Debt repayable in Pesos 15.800 ICA loan L%. November 16. 1959 15.800 Source: Economic Staff Table 3: INTEREST AND PM4ORTIZAIION PAYMENTS ON EXTERNkL PUBIIC DEBT AS 0 DECEMBER 31, 1959 V.,I'TH MMPJOR REPORT.D ADDITIONS TO OCTOBEER 31, 1959. (In the-usaands cf U.S. dol1r equivalents) Total debt Balance of Payments Credits Dlebt out-, Debt out- standing Payments ciring year starding Payments during ye ar plus un- plu s un- disbursed Amorti- In- Total disbursed Amorti- In- Total Year January 1 zation terest Janua:ry I zation terest ACTUAL 1957 276,666 63,305 8,394 71,699 - 32,589 950 33,539 1958 h43,552 m11,h65 1h,389 125,854 1,858 83,116 7,258 90,374 1959 m55,976 111,733 17SOh 129,237 22585 08 10,607 91,387 PROJECTED 1960 386,239 54,285 17,100) 71.385 171,020 24,902 8,298 33,200 1961 37h,059 57,813 15, 882 73,695 1)46,118 32,701 7,156 39,857 1962 314,747 50),162 14,175 64,.337 113, W17 32,101 5,451 37,552 1963 265,267 h5,253 12,518 57,771 81,3L6 28,958 3,843 32,801 196h 219,757 41,201 10,292 51,h93 52,358 28,958 2,316 31,27h 1965 178,293 25,861 8,h29 3 A,290 23,hoo 15,600 975 16,575 1966 152,167 17,667 7,183 24,830 7,800 7,800 195 7,995 1967 13h,250 10, 251 6,529 16,783 - - 1968 123,726 10,493 6,049 16,542 - - 1969 112,957 10,955 5,551i 16,56 - - - 1970 101,727 11,564 h,875 16,h39 - - See footnotes at end of table (Continued) (Table 3 cont'd) Long-term Debt Medium-term Iebt Debt out - Debt out- standing Payments during year standing Year plus un- plus un- Payments during r disbursed Amorti- in- Total dis bur s ed Aior ti - In- Total January 1 zation terest January 1 zation terest ACTUAL 1957 187,676 12,237 5,870 18,107 88,990 18,h79 1,57 20,053 1958 17'3,793 12,025 5, 976 18, 001 7h,901 16,324 1,155 17,479 j959 163595 5,639 1863 566 17, 9 258 19177 PROJECTED 1960 164,599 12,657 6,616 19,273 50,620 16,726 2,108 18,834 1961 194,0h7 11,5o 6,916 18,366 33,894 13,662 1,500 15,162 1962 182,098 9,530 7,579 17,109 20,232 8,332 836 9,168 1963 189,65:1 10,812 7,886 18,698 11,900 5,205 494 5,699 1964 160,7014 9,208 7, 448 16,656 6,695 2,74o 249 2,989 1965 150,938 9,062 7,033 16,095 3,955 887 159 1,046 1966 141,299 8,952 6,623 15,575 3,068 565 122 687 1967 131,747 9,349 6,209 15,558 2,503 556 96 652 1968 121,779 9,587 5,775 15,362 1,947 535 70 605 1969 111,535 10,030 5,324 15,354 1,h12 534 45 579 1970 100,89 11,035 ;,855 15,890 878 529 20 sh9 (Continued) (Table 3 continued) Excln des service on the folloti rig: 1. ICA loans totaLT-ing %1.,180,ooo; $25,380,OO0 repayable in Colombian pesos or in U.S. dollars at the option of Colombia, -15,800,000 repayable in Colombian pesos. 2. $180,000 of debt outstandin g December 31, 1959 for which no repayment terms are readily available. Sour ce: Economic Staff Table 4: SUPPLY AND USE ûF RESOURCES, 1950 - 1959 ( In billions of pesos at 1958 prices) Suppl Domnestic Uses _ SxpOrt Total Gross Year Dorestic Imports TotaL Private Governient Domestic Inventory Product Consumption Consunption Investment Changes Total 1950 14.6 3.1 17.7 10.8 0.9 2.7 0.4 14,9 2.8 17.7 1951 15.0 3.0 18.0 10.8 1.1 2.7 0.3 14.9 3.1 18.o 1952 16.o 3.1 19.1 11.5 1.1 2.9 0.3 15.8 3.2 19.0 1953 16.9 4.2 21.1 12.2 1.4 3.9 - 0.2 17.2 3.9 21.1 1954 18.2 4.6 22.8 13.2 1.4 4.7 - 19.3 3.5 22.8 1955 18.9 4.8 23.7 13.8 1.5 4.9 - 20.2 3.6 23.,7 1956 19.4 4.4 23.8 14.0 1.4 4.6 0.1 20.1 3.7 23.8 1957 20.0 3.7 23.7 14.4 1.3 3.4 0.9 20.1 3.7 23.7 1958 20.5 3.3 23.8 14.8 1.3 3.3 0.5 19.9 3.9 23.7 1959 21.7 3.4 25.1 15.2 1.3 3.6 0.4 20.6 4.5 25.1 SOURCE: Bancc de la Republica. Table 5 INDUSTRIAL ORIGIN OF GRCSS DODESTIC PPC,DUCT, 1950-59 (Ir millions of pesos, 1958 Prices) 1950 1951 1952 1953 1954 1955 1956 1957 1958 1959 Agriculture 5,495.7 5,569.1 5,945.9 5,985.9 6,133.3 6,294.8 6,348.3 6,791.,3 7,069.3 7,340.7 Fishing 16.0 16.0 17.1 17.1 17.1 19.5 22.9 30.7 28.4 28.9 Forestry 44.8 46.9 49.5 53.3 56.6 59.4 69.5 73.2 79.7 78.3 Mining 523.1 590.9 595.8 632.5 659.4 668.0 726.7 748.4 768.7 879.2 Manufacturing 2,179.6 2,221.6 2,418.6 2,608.2 2,844.7 3,005.6 3,225.9 3,385.7 3,518.6 3,734.9 Building Con- struction 407.9 403.2 424.8 533.4 699.2 759.1 781.4 738.2 712.3 801,2 Coýmerce 2,334.1 2,352.3 2,498.2 2,811.3 3,163.8 3,142.5 3,124.3 3,027,,0 3,039.2 3,279.3 Transportation 612.1 673.1 774.1 805.3 959.0 1,099.4 1,070.4 1,130.7 1,051.7 1,103.7 Cormunications 54.8 57.2 59.8 72.1 79.8 91.2 96.6 104.8 113.2 120.7 Public Utili- ties 70.6 75.3 82.4 92.3 101.4 111.5 125.4 134.6 144.9 158.7 Finances 224.5 235.6 278.7 301.9 366.7 414.9 483.1 395,5 381.1 402.0 Housing 763.3 753.8 786.6 818.2 854.1 899.5 947.1 998.8 1,055.8 1,130.8 Personal Ser- vices 1,118.4 1,156.6 1,185.7 1,228.4 1,280.4 1,341.5 1,436.2 1,468.3 1,527.9 1,582.9 Gove rrne nt Services 735.9 817.7 852.9 963.4 935.1 975.1 933.7 992.4 986.0 1,046.4 TOTAL SERVE ES 5,913.7 6,121.6 6,518.4 7,092.9 7,740.3 8,075.6 8,216.7 8,252.1 8,299.8 8,824.5 TOTAL G0ffS & SERVICES 14,580.8 1969.3 15,970.1 16923.3 1lo.6 18,882.0 13.4 20J,019.6 2076.8 21,687.7 Index 100.0 102.6 109.5 116.1 124.5 129.5 132.9 138.4 140.4 148.5 Source: Banco de la Republica Table 6 GRCSS DCMESTIC FIXED CAPITAL FORMATION, 1950-1959 (In millions of pesos) Ur'ban Rural Agricultural Building Building Investrænt Paz del Construetion Construction and Rural Petroleum PUblic Rio Steel Production of Imports of (Private) Inproverents Industry Construction ill Capital Goods Capital Goods TOTAL AT CURRENT PRICES 1950 360.4 61.7 175.4 8.4 148.6 0.4 24.1 277.0 1,056,.0 1951 264.3 65.8 137.3 18,2 213.5 5.4 29.4 403.0 1,136.9 195:2 321.0 67.1 162.3 13,2 211.5 8.8 33.4 464.0 1,281.3 1953 390.4 72.1 145.3 38.) 288.,9 13.4 38.7 716.0 1;702.8 1954 523.5 78.2 203.5 59.2 357.8 50.9 44.7 821.0 2,138.8 1955 487.9 79.6 223.6 62.0 518,7 4.6 53.6 895.0 2,325.0 1956 623.6 84.8 222.8 55.0 555.8 2.0 83.0 863.0 2,490.0 1957 719.6 93.2 253.2 83.3 557.8 12.5 125.0 72830 2,572.6 1958 826.2 106.4 301.6 89.8 674.0 12.8 165.8 1,126.0 3,302.6 1959 1,110.5 119.2 338.8 155.1 812,5 6.8 198.9 1,120.0 3,861.8 AT 1958 PRICES 1950 625.7 105.7 327.8 16.3 288.6 0.7 47.5 1,260.0 2,672.3 1951 436.8 105.7 233.6 34.0 399.9 8,9 53.0 1,39C.0 2,661.9 1952 525.4 106.0 276.1. 23.4 375.6 14.4 58.7 1,519.0 2,898.6 1953 624.7 106.0 264.5 64.4 490.3 21.4 70.1 2,232.0 3,873.4 1954 798.4 106.0 306.9 100.0 604.4 77.6 14.3 2,594.0 4,671.6 1955 698.0 106.2 320.7 101.3 847,6 6.6 96.4 2,677.0 4,853.8 1956 821.6 106.4 297.2 79.6 804.3 2.6 124.1 2,403.0 4,638.8 1957 830.9 106.4 310.5 105.9 708.8 14.4 154.2 1,206.0 3,437.1 1958 826.2 106.4 301.6 89.8 674.0 12.8 165.8 1,126.0 3,302.6 1959 1,009.6 106,7 305.3 134.9 706.5 6.2 182.7 1,110.0 3,561.9 1 Pre:limiriary data. Source: 'Banco de la Repu-lira. Table 7: CENTRAL BAXK CREDIT. 1957-1960 (In millions of pesos) To Banking Instit. To To Official Sector Member Non-member Private National Official Holdings of Banks Banks Firms Gov't. Agencies Gov't. Securi- ties Total December 1957 658 49 447 -- 337 66o 2,151 1958 671 83 7h2 366 686 254 1959 690 ll 664 -- 341 7h2 2,451 January 1960 69 10 664 -- 341 683 2,37 Feray6710 6~71 342 72 20 March 748 6 663 -- 337 756 2,510 ril u4 13 6u -- 33 749 2,4uu May 785 1 625 -- 333 735 2,479 June 743 1 620 330 734 2 1 28 July 656 1 616 -- 331 725 2,029 Source: Banco de la Republica Table 8: MONEY SUPPLY AND BNK CREDIT, 1957-1960 (In millions of pesos) nv S Bank Credit Total Official Banks Demand Treasury Excluding Total Commercial Total Banco Mortgage Caja Deposit Deposit Treasury Banks Popular Banks Agraria Deposit------------------------------ December 1957 1,578 75 2,744 2,957 1,762 1,195 131 505 559 December 1958 1,957 142 3,318 3,258 1,879 1,379 136 569 674 December 1959 2,230 142 3,716 3,760 2,064 1,696 131 728 837 January 1960 2,590 118 3,764 3,734 2,046 1,688 130 744 814 February 2,570 212 3,705 3,773 2,052 1,721 133 760 828 March 2,580 230 3,652 3,798 2,058 1,739 136 743 860 April 2,599 166 3,685 3,650 2,069 1,780 139 755 885 May 2,589 184 3,645 3,966 2,165 1,801 144 776 880 June 2,518 -2r2 3645 ,01 2,189 1,805 150 795 879 SOURCE: Banco de la Republica. Table 9: PUBLIC SECTOR FINANCE, 1958-1961 (in millions of pesos) 1958 1959 1960 1961 kstimate) Current Receipts 3,108 3,450 3,847 L9 National Government 1,637 1,921 2,06 2,290 Autonomous Institutes 2h4 279 394 405 Departments 504 517 541 545 Municipalities 275 279 318 323 Public Enterprises hi h54 530 550 Current Expenditures 2,069 2,227 2,599 2,878 National Government 761 656 786 853 Autonomous Institutes 175 238 271 280 Departments 303 370 428 433 Municipalities 164 206 249 250 Public Enterprises 43h 498 591 689 Public Debt Service 232 259 274 373 Public Savings 1,038 1,222 1,249 1,243 Reserves and Borrowing 258 299 314 240 Total Resources for Investment 1,296 1,511 1,563 1,482 Total Public Investment 959 1,161 1.382 1,482 Surplus 337 350 181 -- Source: Ministry of Finance. 1961 Budget. Table 10: GOVERN1ET INVE?STMFT BY FT'ICTI0ON, 1957-60 AND IN FOUR YEAR PLAN, 1961-64 (In millions of pesos) 1957 1958 1959 1960 1961 1962 1963 1964 General Services 38.5 10.1 20.5 10.2 23.8 23.0 24.0 26.0 Police and Justice ~ 2.2 1.0 5.30 14. 13.0 14.0 -6.0 Defense 30.5 7.9 2.5 h.9 9.4 10.0 10.0 10.0 Economic Services 15.9 27.0 42.2 48.1 77.2 97.2 109.5 116.9 Agriculture, cattle raising and forestry 13.7 17.8 31.0 35.3 55.8 72.8 80.6 83.0 Mining 1.0 1.0 1.5 0.9 1.0 2.5 2.5 2.5 Manufacturing 1.2 8.2 3.7 5.9 12.9 14.4 18.9 18.9 other -- -- 6.0 6.0 7.5 7.5 7.5 7.5 Energy /a ho.C ho.0 92 13k1 127.8 126.9 119.7 Transprt,ation and Communications h33.1 363,3 527.7 538.0 6h1.5 511,0 515.6 512.6 Cultural and Social Services h8.7 90.5 96.6 166. 1)7.j 162.3 205.7 25Q.A Education and Culture 2.9 21.3 11E 20.9 ~23.6 36.7 l.3~ Public Health 8.2 -. .5 21.6 39.9 -3.3 50.0 50.0 Housing 37.6 6h.8 71.0 103.9 83.9 82.3 114.4 155.6 Cormunity Services 10.3 34.7 h2.0 88.1 91.8 79.3 97.1 120.5 Health a 27.6 33- 72.9 7.C9 71.5 ~98.5 Other 10Z3 7.1 8.4 15.2 17.3 20.3 20.6 22.0 Miscellaneous 22.3 30.7 60.3 40.4 47.7 49.2 50.5 51.9 TOTAL 568.8 596.3 829.3 966.4 1,163.5 1,049.8 1,129.3 1,202.0 i InLclu under "5isce."Llaneous". SURE.: Plannig ffice, Priminarydat.L1. U -oes not- include th-^e investmen Departments and Municipalities financed with their ow-m resources and of litose enities that do not recteLve sup rfr the UCtlÆd Government. Table 11: FOUR-YEAR INSTPENT PLAN: ATLOCATTON OF APPROPRIATIONS BY PURPOSE (in millions of pesos, 1960 prices) Transfers to De- Conservation To complete pro- For new Total Year partments and and jects initiated Projects Municipalities Mai+ance before 1967 (for investment) 1961 69.7 6.0 220.8 19.0 664.0 57.1 209.0 17.9 1,163.5 1962 72.3 6.9 249.6 23.8 425,7 40.6 302.2 28.8 1,049.8 1963 74.8 6.6 262.0 23.2 323.1 28.6 469.4 41.6 1,129.3 1963 77.4 6.4 282.5 23.5 246.0 20.5 596.1 49.6 1,202.0 SOURCE: Planning Office. Preliminary data. Does not include the investment of Departments and Municipalities financed with their own resources and of those entities that do not receive support from the Central Govern- ment. Table 12: PUBLIC INVEST1ENT BY AGENCY, 1957-60 AND IN FOUR-YEAR PLAN, 1961-64 (In millions of pesos) 1957 1958_ 1959 1960 1961 1962 1963 1964 MINISTRIES 382.5 348.6 536.7 531.0 568.9 625.3_i52.2 -715.2 Government L.1 4.1 L.3 7.0 8.4 10.0 10.0 11.0 Justice 4.6 0.9 6.1 3.0 10.5 8 0 8.0 9.0 Defense 0.5 7.9 2.5 4_9 9.4 10.0 10.0 10.0 Police 3.4 1.3 1,8 0.8 3.9 5.0 6.0 7.0 Apri niiltnrp 1J 7 17-A 1q_7 3; 3 r.A 72-A 80.6 88.0 Public Health 3.2 2.3 3.7 10.6 28.3 33.3 40.0 40.0 npinr.pment - - . An 6n An A-n 6.0 Mines and Petroleum nl2 r n 28. 9 27 Q . 0 AA7 4.0 19.1 Education 2.9 21.3 11.4 20.9 23.6 36.7 41.3 48.8 Public Works 323.8 243.4 359.7 378.1 375.7 392.3 397.8 441.0 Commission - 23.4 91.9 34.5 - - - - AUTONOMOUS AGENCIE 1806.3 247.*7 292.6 435.4 594 .6 12. 147r7.- 186. 0 uw ]*a iDkzcurMTy Institute 5.0 2.1 10.8 11.0 11.6 10.0 10.0 10.0 1Munic-Lipal De-UU lopment Inst. - 27.6 33.6 72.9 74.5 59.0 76.5 98.5 city Institute - 40.0 40.0 95.2 134.1 127.8 126.9 119.7 rural uredit Institute 37.6 64.8 71.0 103.9 83.9 82.3 114.4 155.6 industrial De- velopment Inst. 1.2 8.2 3.7 5.9 12.9 14.4 18.9 18.9 Uolomblan 1ou- rist Bureau - - - 2.6 3.0 3.3 3.6 4.6 Nuclear Affairs Institute - - - - 1.5 1.5 1.5 1.5 National Rail- roads 117.4 79.1 112.6 121.5 245.8 97.4 95.7 48.2 Colombian Air- port Company 25.1 25.9 20.9 22.4 27.3 28.8 29.6 30.4 TOTAL 568.8 596.3 829.3 966.4 1.163.5 1.049.8 1.129.3 1.202.0 SUURUE: Planning Office: Preliminary data. Does not include the investment of those Departments and Municipalities financed with their own resources and of those entities that do not receive support from the Central Government. Table i3: u1n"0 QT TATrwA10, AYQv - 15 (In millions of U.S. dollars) 1195 7 1958 1959 I. Merchandise account 63 147 158 125 Merchandise exports Fob 668 601 542 528 coffee (529) (409) (366) (331) Petroleum, fuel oil, bananas and gold (116) (11) 103) M19, Minor exports ( 23) ( 13) ( 13) (.16) Unrecorded trade ( - ) ( 60) ( 60) (69) Merchandise imports, Fob '605' 454 384. 403 II, Service and donations account (net) ;;76 -6o -125 -60 Travel -.13 -18 - 6 - 5 Transport and insurance ~38 -38 -31 -23 Investment income _16 -26 -83 -33 Donations 2 3 6 4 Government aid Miscellaneous -11 19 -11 - 3 III. Capital account, excluding official reserves an1d sliort- term official capital 22 -30 3.3 22 Private long-term capital 13 - 9 2 4 Privat shr -er caia 97 27 .4 Official long-term capital 9 76 -16 -23 Amortization (32) (31) (30) (32) IV. Errors and Omissions -68 Sa -3 V. Official reserves and short-term capital ToviaTIs -59 1U U70 04 Banco Republica: Gold and foreign exchange 14 54 Payments agreements 2 4 Liability to IMF (Rep.) - 5 15 to Eximbark -45 -21 to Comm, Banks 8 - 5 Promisory Notes 11 42 Treasury - - 1 Import arrears 85 - 4 SOURCE: For 1956 and 1957, XXXVI Annual Report Banco de la Republica; For 1958 and 1959, Banco de la Republica, unpublished estimates. kLle äGb E OF PAYIENTS, 1959 - Type of Transactions (in millions of US Dollars) Transactions I.nvolving Foreign Exchange Transadtions n6t In- "tCertificate Market" "Free Market" volving Foreign Exch. T 0 T A L Receipts Payments Receipts Payments Receipts Fayments Recelpts Payments Goods and Services 455.7 359.1 209.1 196.9 102.5 149.5 6-5.6 553.8 Exports, FOB 393.8 - 75.9 36.6 81.3 - 514.3 - Coff ee (370.7) ( - ) ( - ) ( 36.6)/1 ( 0.1)/2( - ) (33-2) - Petroleum and fuel oil ((-)(- ) ( ) ~~(1) (- ) (.2) - Bananas (9.0) ( - ) (>4.9) ( - ) ( - ) ( - ) (13.9) - Other commodi_ties ( 14.1) ( - ) ( 2.0) ( - ) ( - ) ( - ) ( 16,1) - Contrabaid (-) (-) (69.0) (-) (-) (-) (69,0) - Imports, FOB -284.1 - 50,0 - 68.1 /L - 402.5 Non-morietary gold 5.9 0.2 8.0 - - 13.7 - Transport, insurance and travel - 23.3 5 73.5 78.4 - - 63.h 91,5 Inv Efitmenu iI.omG 43.2 44.0 41.5 13.7 21.3 81.2 1.b 3b.2 Governmient and iiscellaneous 12.8 7.4 10.1 18,2 - - 22,9 25,6 Donations - - 1.0 -- Prvatelorn-term capital - 0.. 2.U - -~ 3 Private short-termj ital .- - .~ 2.j . 2 Official long-t,erm capital - T,2 -' 32. ö- Exi nb ank - ICA ( .9) 6¯f) I.B.R.D.( 6.9) ( 6,9) Other ( 0.8,i ( 08) Amortization of existing loans ( 32.1) ( - ( 32.1) Other ( 0.7) ( - ) ( C.7) Short-term capital (Banks) 666- - - 4.1 - 4 - Inter-market transfers 27/ 71. ÖO .0Ö2 Reserves and Related short-term items 4_.7 149.7 - - 18.8 22.4 6>4; 153,3 Gold, foreign excba nge and paymnents agreements - 53.9 - - - 3.6 - 57.5 Liability to IF - 15.0 - - 18.8 18.8 - 15.0 Liability to Eximbank 39.0 18.0 - - 318.0 Liability tc U.S. commercial banks 25.8 21.2 - - - - 25.8 21<2 Pronissory notes bl-6 14 6 Commercial Banks - - .0 .0 Treasury - - - 1.3 - 1.3 Errors and Omissions (net) - _ -- 1.8 -- 1. - 3.2 Foo tnotesonnex:tp-- Table 14 (Continued) FOOTNOTES /l Exhangepurchased by coffee exporters to complete ecchaige surrender requirements in t 1E official market. /2 Coffee exports for vhich exchange-surrender requirements have not been completed. /3 Not subject to exchnLge-surrender requirements. /4 Includes $21.3 million of petroleum equipment ari refined projects imported without use of foreign exchange; $6.9 million of equipment paid with IBRD loans and $1.3 million of U.S. agricultural surpluses. Irports financed with short-term commercial credits are estimated to amount to $38.9 million. ZS Includes $10.2 million transferred from certificate to free market. Z Includes $19.5 million interest on public debt. 2z7 Includes Remittance Tax of 10%; customs duties payable in U.S. dollars, consular invoices and port duties. Source: Banco de la Republica