VZCZCXYZ0023
PP RUEHWEB

DE RUEHBO #0190/01 0151941
ZNR UUUUU ZZH
P 151941Z JAN 08
FM AMEMBASSY BOGOTA
TO RUEHC/SECSTATE WASHDC PRIORITY 0945
INFO RUEHCV/AMEMBASSY CARACAS 9777
RUEHPE/AMEMBASSY LIMA 5783
RUEHZP/AMEMBASSY PANAMA 1083
RUEHQT/AMEMBASSY QUITO 6490

UNCLAS BOGOTA 000190 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: SOCI PGOV ECON CO
SUBJECT: COLOMBIA REDUCES POVERTY THROUGH GROWTH COMBINED 
WITH GOVERNMENT PROGRAMS 
 
REF: 07 BOGOTA 900 
 
¶1.  SUMMARY.  Economic growth and anti-poverty programs have 
lifted over 5.5 million Colombians out of poverty since 1999. 
 "Families in Action," the GOC's conditional cash transfer 
program, substantially increased school attendance and 
children's health for 700,000 families in extreme poverty. 
The GOC recently expanded the program to cover an additional 
one million impoverished families, and began a new 
anti-poverty program called "Juntos" ("Together") in late 
¶2007.  The World Bank, Inter-American Development Bank (IDB) 
and the GOC have collectively committed USD 1.78 billion to 
Families in Action through 2011 and are open to providing 
assistance to Juntos.  END SUMMARY 
 
Economic Growth Helps Reduce Poverty 
------------------------------------ 
 
¶2.  Economic growth averaging five percent annually since 
2002 has helped lift over 5.5 million Colombians out of 
poverty.  The number of impoverished Colombians in poverty 
dropped from 57.5 percent to 45 percent between 1999 and 
2006, while extreme poverty rates fell from 25.4 percent to 
12 percent over the same period.  Natalia Millan, an analyst 
at the economic think-tank Fedesarrollo who studies poverty, 
estimated that in 2007 poverty dropped at least  two to three 
percent.  Although official data on 2007 poverty rates will 
not be released until mid-2008, Andres Escobar Arango, head 
of the National Planning Department's Poverty Office, 
privately agreed with Millan's estimate. 
 
¶3.  Mauricio Cardenas, Director of Fedesarrollo and a former 
Minister of Economic Development, cites economic growth as 
responsible for half of Colombia's poverty reduction with the 
rest coming from targeted anti-poverty programs.  Cardenas 
estimates the U.S.-Colombia Trade Promotion Agreement (CTPA) 
will increase Colombian GDP growth by up to two percent per 
year, thereby lowering the poverty rate by nearly one percent 
annually and lifting 500,000 Colombians out of poverty each 
year. 
 
"Families in Action" Helps 700,000 Families 
------------------------------------------- 
 
¶4.  The GOC started the Families in Action program in 2001 as 
a temporary measure to reduce the social impact of the 1999 
recession.  The program follows a standard conditional cash 
transfer model to reduce poverty and build human capital. 
Impoverished families receive subsidies of USD 22 per month 
for taking their children for health check-ups and an 
additional USD 7-13 per month for each child in primary and 
secondary school.  More than 700,000 families, including over 
a 100,000 displaced families, participated in 2006.  World 
Bank evaluations show the program has led to substantial 
increases in school attendance and children's health.  Miguel 
Lopez, World Bank representative in Colombia, described the 
program as "very successful" in improving school attendance 
and health.  Many displaced and vulnerable families in the 
program also participate in USAID income-generation programs 
that help them transition out of poverty. 
 
1.5 Million Fewer Families in Poverty 
------------------------------------- 
 
¶5.  The GOC hopes to pull 1.5 million families out of extreme 
poverty by 2010 through participation in Families in Action 
and a new program called "Juntos."  Diego Molano of Accion 
Social (the President's social program office), which 
oversees Families in Action and Juntos, said Juntos will more 
proactively attack the root causes of poverty. 
 
¶6.  Juntos families will have social workers assigned to help 
ensure access to programs in nine essential areas: 
identification/documentation (a significant problem in rural 
areas, especially amongst displaced persons), work, 
education, housing, nutrition, family dynamics, 
insurance/banking, justice, and health.  Under health, the 
basic necessities include affiliation with the GOC's health 
insurance program, prenatal care, children's vaccinations and 
adult family planning.  Co-managers will help families get 
access to these necessities.  Molano said the program will 
also help Accion Social locate weak spots in the GOC's social 
support network.  Molano stressed that, while Juntos will 
provide the tools to climb out of poverty, Colombia's 
continued economic growth and job creation remain key to 
families becoming economically self-sufficient. 
 
Pilot Program Successfully Initiated 
------------------------------------ 
 
 
¶7.  In 2007 Accion Social successfully enrolled an additional 
one million families into Families in Action and started a 
pilot Juntos program for 35,000 families (expanding to 70,000 
families) in 30 municipalities with 700 new social workers. 
Molano said the pilot program demonstrated that "outsourcing" 
works well in hiring and managing the 15,000 social workers 
Juntos needs (one social worker, whose salary will be split 
between the national government and local municipalities, for 
every 100 families).  Accion Social will create consortiums 
of universities, foundations, NGOs and local chambers of 
commerce to hire and manage the social workers in each of 110 
microregions.  Phase Three of the Juntos program starts in 
February 2008 when Accion Social plans to expand the program 
into all of Colombia's 1,098 municipalities.  Accion Social 
plans to have 750,000 families fully participating in Juntos 
by end of 2008, and 1.5 million families by the end of 2009. 
 
GOC, World Bank and IDB Commit USD 1.78 Billion 
--------------------------------------------- -- 
 
¶8.  The GOC estimates that Families in Action will cost USD 
1.78 billion through 2011.  The GOC committed to USD 440 
million and requested loans from the World Bank and IDB of 
USD 668 million each.  The World Bank approved a USD 105 
million loan in March 2007 and expects to approve a new loan 
of USD 563 million at the end of 2008.  The IDB approved its 
first loan of USD 306 million in December 2007 and expects to 
approve a new loan for USD 362 million in mid-2009.  Lopez 
said that the GOC has not approached either institution about 
loans for the Juntos program, but both were working with 
Accion Social to help develop Juntos and would review 
possible assistance as the program progressed. 
 
 
 
 
Brownfield