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Multilateral express confidence in Colombia by agreeing to provide US$4.2 billion

The Inter-American Development Bank, the World Bank, in joint effort with the Andean Development Corporation (CAF) and the Latin American Reserve Fund (FLAR) have agreed to support the program agreed between the Government of Colombia and the IMF.

In supporting this agreement, the multilateral financial institutions have agreed to provide Colombia with US$4.2 billion during the next three years (2000-2002). To this package the IDB will contribute US$1.7 billion, the World Bank US$1.4 billion, the CAF US$600 million and FLAR US$500 million.

The financing provided by the IMF and the multilateral banks will support a program designed to restore confidence and reinvigorate the Colombian economy. A substantial part of these funds will be allocated to finance a social safety net. In that connection the Government of Colombia has agreed to expand social spending by US$900 million over the next three years.

The social safety net program will mitigate the effects of the economic recession, which has led to mass unemployment, a drop in the living standards of the most vulnerable sections of Colombian society and increased internal conflict. This multilateral package will help finance the following priority activities: emergency employment generation, training, attention to displaced families, and special programs for youth and the elderly.

The multilateral financial institutions reiterate their support for the wide-ranging reform strategy on which the Colombian government has embarked. In particular, they express their highest confidence in the fiscal, financial and social reforms being implemented and the government's effort to lay the bases for lasting peace.

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