Colombia - Country assistance strategy : chairman's concluding remarks

COLOMBIA: COUNTRY ASSISTANCE STRATEGY CHAIRMAN'S CONCLUDING REMARKS Meeting of Executive Directors January 16, 2003 The Executive Directors welcomed the joint IBRD/IFC Country Assistance Strategy for Colombia and commended the integrated approach taken by the World Bank Group in its formulation. Directors commended Colombia's authorities for implementing an impressive reform agenda of macroeconomic, fiscal, and structural reforms, especially in the important areas of pensions, labor, financial sector, tax and state reform. They urged the Govemment to continue its efforts, highlighting that Colombia's progress in pursing this reform agenda would help the country to improve socioeconomic conditions, including excessive inequity, reduce the severe level of unemployment, put public finances on a sustainable path, strengthen the financial system, and reinforce the economy against external shocks. Directors noted that poverty and inequality have been increasing in Colombia and were concerned that this could further inflame conflict and violence in the country. Directors agreed that despite Colombia's difficult situation, the Bank can play a key role at this juncture. They were broadly supportive of the CAS's key objectives and welcomed its strong emphasis on achieving fast and sustainable growth, and helping the displaced populations and other vulnerable groups share in the fruits of growth. They highlighted the importance of strengthening the rural sector, the competitiveness of the agricultural sector and attention to social challenges. The Bank was also encouraged to support the Government in its efforts to develop and implement an effective strategy for land reform. Directors broadly agreed with the proposed level, composition, and scenarios for Bank lending. Some Directors, however, suggested more caution with the proposed high case, and called for more concrete benchmarks and more quantified triggers for possible different cases. The need to improve debt management and ensure debt sustainability was also stressed. Directors welcomed that the specific operating programs would be assessed on the basis of Colombia's progress in implementing the reforms laid out in the CAS. In this connection, they stressed the need for more specific, outcome-focused triggers and indicators. Directors agreed with the proposed ESW program and stressed the importance of ensuring that the program be used to inform the dialogue with the administration and to help deepen needed reforms. Directors welcomed the World Bank Group's private sector strategy, particularly the planned support for the development of micro-enterprises and SMEs. They commended the IFC's active engagement in Colombia, including to help strengthen its competitiveness, create employment opportunities, and promote environmentally and socially sustainable business practices. Finally, Directors welcomed the continuing cooperation between the World Bank Group and other partners, particularly the IMF, IDB and the CAF, and stressed the importance of further enhancing the multilateral partnership in promoting development in Colombia.