Announcement of Rural Development Project in Colombia Covers Nine Thousand Communities on August 2, 1990

FOR IMMEDIATE RELEASE World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. *Telephone: (202) 477-1234 BANK NEWS RELEASE NO. 91/5 Contact: Ciro Gamarra (202) 473-8721 RURAL DEVELOPMENT PROJECT IN COLOMBIA COVERS 9,000 COMMUNITIES WASHINGTON, August 2, 1990 -- Colombia will launch a rural development program that will help raise the incomes of about 280,000 farmers and fishermen in 9,000 communities in the Andean and coastal areas of the country. The World Bank has approved a $75 million loan to support the program, which will be car- ried out by DRI, Colombia's Fund for Integrated Rural Development. The program aims at reducing rural poverty by generating jobs and higher incomes for farmers, fishermen and women through access to improved agricultural technology, support for small-scale enterprises and complementary marketing facilities. Living conditions will be improved through the provision of safe drinking water and better sanitation systems and roads. Watershed areas will be protected to safeguard the environment and help ensure supplies of clean water for household use and irrigation. DRI has worked closely with the municipal governments and local communi- ties to design the program, the main vehicle of the central government to help municipalities plan, finance and implement environmentally sound projects. The program's design provides for joint planning and cofinancing between the central government and the local authorities and for strong participation by local communities in proposing projects for financing by the program. This partnership is designed to ensure efficient use of resources. The joint venture arrangements are especially important during the first years of the transfer to a decentralized system under which municipal govern- ments will be responsible for planning and implementing investment projects. The program represents Colombia's continuing efforts to increase agricultural production and to help the rural poor improve their incomes and livelihood. Women's groups will be formed to promote cottage enterprises and better health care and education. The program also aims at strengthening the capabilities of DRI in planning, preparing, and implementing projects. Colombia has about 1 million small-scale farmers who cultivate nearly 80 percent of the farms in the country. These farmers--six of every 10 rural work- ers--produce about 60 percent of the country's basic foodstuffs and 20 percent of industrial raw materials derived from agriculture. The loan to the Republic of Colombia is for 17 years, including five years' grace, with a variable interest rate, currently 7.72 percent, linked to the cost of the Bank's borrowings. It also carries an annual commitment charge of 0.25 percent on the undisbursed balance. NOTE: Money figures are expressed in U.S. dollar equivalents.