Announcement of the World Bank Approves One Hundred Fifty Million Dollars to Maintain Fiscal Reform Program in Colombia on November 20, 2003

The World Bank Approves $150 Million To Maintain Fiscal Reform Program In Colombia 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://imagebank/servlet/WDS_IBank_Servlet?pcont=details&eid=000160016_20031030100909 Washington, November 20, 2003 – The World Bank today approved a $150 million loan to Colombia to continue a four-year program of reforming public sector finances and financial management. The objectives of the Second Programmatic Fiscal and Institutional Structural Adjustment Loan center on strengthening the tax and budgeting systems while stepping up efficiency and accountability. “Fiscal balance, growth and poverty reduction are closely linked in Colombia,” said Isabel M. Guerrero, the World Bank’s Country Director for Colombia and Mexico. “World Bank support is essential to the government achieving all three – a goal that this reform plan puts within reach.” The new loan is part two of a financing plan that began in March, 2003, with a $300 million commitment. It is to be followed by another $150 million loan in fiscal year 2005, and a final $300 million in fiscal year 2006, for a total amount of $900 million. “Overall, the reform plan is designed to enable the government to match its efforts to end the country’s armed conflict with measures to put Colombia on a sound financial footing and improve the quality and efficiency of public services,” said Mario Francisco Sangines, World Bank task manager for the program. Specific elements of the new, second, phase include: - Making public finances more sustainable through the enactment and application of fiscal responsibility legislation; - Reducing losses, generating revenue, and providing new housing for the poor, by improving management of state- owned real estate assets, whose administration is now hampered by deficient, incomplete and unreliable information; - Improving budget management by monitoring results, making budget information available to the public, and bringing accounting practices into compliance with international standards. The fixed-spread loan is repayable over 16 years with 5.5 years of grace. For more information on the World Bank’s work in the Latin America and Caribbean region, please visit: http://www.worldbank.org/lac