The World Bank In Colombia

Colombia’s presidential elections in June 2022 resulted in a victory for Gustavo Petro of the leftist coalition Pacto Historico. The Petro administration's main priorities are consolidating peace, social justice, environmental justice, and change for women.

Colombia’s solid macroeconomic institutional setting, grounded on a rules-based fiscal framework, a flexible exchange rate, and a modern inflation-targeting regime, has been the cornerstone of its macroeconomic stability. Yet, the pace of economic growth has been slowing. Colombia has significant potential to enhance its contribution to GDP growth by increasing productivity and further diversifying and expanding its exports. Addressing infrastructure gaps, improving educational outcomes, and strengthening institutions are crucial steps to further boosting the country's economic development.

Macroeconomic imbalances that surfaced during a strong post-pandemic economic recovery are correcting rapidly, with declining inflation and fiscal and external deficits. The economy expanded 0.6% in 2023, as the needed un-winding of stimulus policies and heightened policy uncertainty affected fixed investment. The poverty rate is estimated to have remained stagnant in 2023, as labor markets showed limited improvements. The economy is projected to expand 1.3 percent in 2024.

Colombia is a country of large social and territorial inequalities. To reduce poverty and promote prosperity across the country, it's crucial to increase productivity and reinvigorate regional convergence, improve the social security system, create more efficient and inclusive labor markets, and strengthen the intergovernmental fiscal transfer system to enhance the accessibility to and quality of public services across the country.

Colombia is also particularly vulnerable to the effects of climate change. On the one hand, climate shocks affect livelihoods and assets across the territory, undermining welfare improvements. On the other, Colombia is exposed to the reduction in fossil fuel demand as the world decarbonizes. Reaching the country’s ambitious climate targets could help reduce vulnerabilities and promote a more diversified economic structure in the long run.

These multiple challenges would need to be addressed in a fiscally responsible way, which remains a key precondition for Colombia to advance its development goals.

Last Updated: Apr 03, 2024

Colombia’s program is anchored in a new Country Partnership Framework (CPF), approved in February 2024, that emphasizes the territorial dimension of development in alignment with the National Development Plan (NDP). Through this new framework, the World Bank Group’s engagement will strengthen its focus on lagging and conflict-affected regions, improving equity of marginalized groups, enhancing innovation, and supporting Colombia’s ambitious climate goals.

Colombia has a longstanding relationship with the World Bank. Since the approval of the first loan 75 years ago, the country has become one of the largest borrowers Bank-wide. The active portfolio is comprised of 12 IBRD projects totalling $2.4bn in IBRD net commitments and three stand-alone trust-funded projects (GEF and Bio Carbon Finance) with $66m in commitments. Additional grant resources complement ongoing lending programs.

The current portfolio includes, amongst others, a project to establish the multipurpose cadaster in selected municipalities to strengthen land tenure, a project for the improvement of quality of health care services to enhance the efficiency of the health system, and a project to promote resilient and inclusive housing complemented with GCFF and GPG funds.

The program includes a US$ $80 million project aimed at enhancing teaching methods and administrative practices in the education sector. Additionally, a US $750 million program supports policies focused on reducing income and gender disparities, promoting environmentally friendly growth, protecting biodiversity, and ensuring a transition to low-carbon energy sources.

This effort is complemented with research and reports, such as the Colombia Country Climate and Development Report, the Country Economic Memorandum, and the Human Capital Review, which provide in-depth analyses and recommendations.

The Bank's analytical studies have been key in shaping policies across crucial areas, providing core diagnosis. The Bank's knowledge agenda, its analytical work and its technical assistance have driven significant changes in areas like public finance, the shift towards renewable energy, and the improvement of school nutrition programs. Moreover, this work has led the way in collaborating with local governments, especially in improving services related to water, transportation, and housing.

Last Updated: Apr 03, 2024

The World Bank supports Colombia’s efforts to enhance territorial development while promoting a more inclusive and sustainable economic model to reduce inequalities and protect the country's biodiversity. The Bank will continue to support government efforts on climate change mitigation and adaptation.

Among some project´s results, the Colombia Multipurpose Cadaster Project has made a significant impact. So far, it has successfully distributed 22,886 land titles to small-scale farmers, with 7,168 of these titles granted to women. The Bank has promoted the provision of titles to women, either jointly with their spouses or individually, ensuring they have equal ownership rights. This strategy has been particularly important in addressing the challenges women encounter in securing property rights following the death of a spouse.

The project also empowered communities through education. The Intercultural School of Geography for Life - Multipurpose Cadaster, established in 2023, has played a crucial role in this endeavor. More than 500 people from 4 different departments, including peasants, Afro-descendants, and indigenous people, have actively participated in the program; more than 50% are women. The program has trained them in technical, social, and legal aspects of the cadaster, actively involving the communities in the process. Approximately 300 have graduated as para-surveyors, while 250 have become community promoters, extending the knowledge acquired to their communities. This initiative is demonstrating the Bank's commitment to integral development and capacity building in rural Colombia.

On the other hand, the Heart of the Amazon project, funded by the Global Environmental Facility, has had significant impact, particularly in the increased effectiveness of managing national and regional protected areas, covering over 7 million hectares. Furthermore, through social agreements for conservation, restoration, and non-deforestation, sustainable agroforestry practices have been promoted on over 3 million hectares. It also shows significant progress in the implementation of participatory plans with indigenous communities and multisectoral efforts to incorporate environmental criteria into territorial planning. To date, a total of 14,360 individuals have directly benefited from the project, of whom 42% are women.

Last Updated: Apr 03, 2024