US$1.04 billion for Colombia

(Caracas, December 12, 2006).- A report on activities in 2006 was offered in Caracas by CAF President & CEO Enrique García, who announced a record figure of US$5.66 billion for annual approvals. For Colombia approvals totaled US$1.04 billion, representing 18% of the total approved by the Corporation for this period.

In relation to CAF support for Colombia, García said that "this year CAF made an important contribution to the country’s macroeconomic stability, through innovative instruments specifically targeted at execution of the strategy of public debt management, as well as contributing to social development programs for water and sewerage at municipal and departmental levels." For the private sector funds were provided to finance small- and medium-sized enterprises through the financial system.

Social strengthening for Colombia As part of CAF actions in the social area in Latin America in 2006, US$58.1 million was approved for the Magdalena Department Potable Water and Sewerage Program. The CAF president explained "since many of the municipalities in this department need to continue expanding levels of coverage and quality of potable water and basic sanitation services, this operation supports the sectoral strategy of the Colombian government in favor of improving provision of basic social services, under regional management and operating schemes."

Also in the social area, in 2006 US$50 million was granted to the Bogota Education Sectoral Plan: a Great School. In the first case of direct financing to a local government, the project aims to improve access, permanence and quality of education for at least 60,000 students at various levels, giving priority to the less privileged sectors. All this is part of CAF’s actions in favor of education, as primary elements for achieving Colombian development.

Support for regional integration In the context of the regional integrationist dynamic, operations continued through the border passes pilot program, especially progress on analysis and development of the Cúcuta–San Antonio–Ureña pass between Colombia and Venezuela. While in relation to the Puertos de Primera progrIam, the ports of Guayaquil in Ecuador, Cartagena and Buenaventura in Colombia, and El Callao in Peru, have completed reengineering their processes and are now preparing for the Guarantee Mark, all with the backing of the Corporation.

With respect to the Puebla-Panama Plan, this year was important because of the entry of Colombia as full member, contributing to the linkage of this regional strategy with the ongoing integration process in South America, through the South American Regional Integration Infrastructure Initiative (IIRSA). The CAF shareholder countries participating in the Puebla–Panama Plan are Colombia, Costa Rica, Mexico, and Panama.

Integrated response to Colombian development The CAF President said the Corporation has concentrated its efforts on an integrated development agenda which aims to improve the living conditions of Latin Americans, through sustained quality growth, meaning inclusive development that generates employment. García proposed that an agenda based on three fundamental aspects: stability, efficiency, and equity. To do this the agenda must take into account the principles of environmental sustainability, increased international participation, and democratic governance, with the joint participation of public and private sectors, civil society, and the international community.

On this basis, the multilateral financial organization recently approved US$400 million for a Contingent Line of Credit for the Republic of Colombia. "The Colombian economy has performed excellently, thanks to prudent macroeconomic management which has capitalized on a favorable cycle of the world economy," CAF President García said. "It is precisely this excellent management, together with the good conditions in the environment, which are the factors that favor the continuity of a future strategy of liability management, strengthened by inclusion of contingent lines of liquidity, such as the one we have approved," García added.

For their part, the productive sectors were granted funds of around US$90 million, which were channeled through working capital and foreign trade operations into investment projects through the financial systems,

With respect to the environmental component assisted by the Corporation in Colombia, the BioCAF Biodiversity Program concluded with the CAF–GEF/UNEP project on Biotrade in the Andean region. In the participating countries (Colombia, Ecuador, Peru, and Venezuela) studies were finalized to identify barriers and inadequate incentives; entry barriers to international markets; criteria for selecting and evaluating pilot biotrade initiatives; and strategies to improve quality and marketing, among others.

Under the CAF Competitiveness Support Program (PAC) in Colombia, funds were allocated to support two strategic projects: Business Modernization of Automotive Land Cargo Transport in which over 100 companies, organizations, production associations and official bodies participated; and Exporte.org which stimulated the potential and scientific offering of 24 Colombian technology-based companies in the markets of Chile, Ecuador, and Peru.

In the area of cultural and community development, the Music Program was especially important in its orchestral, choral and lute sections, particularly in Medellín where in alliance with the public sector, and the business and tertiary sector the Cultural School Project began its activities making musical instruments. Execution of sports training and generation of values programs continued in excluded communities, in alliance with local private and public sectors.

Lastly, in the Governance Program, the projects concentrated on transparency and efficiency in public management and improvement of the financial administration of various municipalities. Also during this period the execution of the Governance and Political Management Program continued, sponsored by various universities, and the Leaders for the Transformation Program with the School of Advanced Public Administration-ESAP.