Colombia strives to cope with neighbor’s chaos

The Washington-based World Bank, through its affiliation with the Global Concessional Financing Facility (GCFF), has announced the eligibility of Colombia for concessional funding to respond to the needs of more than 1 million Venezuelans who have entered the country since 2017, fleeing economic conditions in that nation. 

The GCFF is a global platform that provides concessional funding to middle-income countries delivering a global public good by hosting large numbers of refugees. GCFF funding for Colombia would support projects and programs aimed at improving the lives of Venezuelans who have come to Colombia, including refugees, and the people hosting them throughout the country.

The movement of migrants and refugees to Colombia has put a severe strain on the country’s economy, making it one of the hardest hit in Latin America, says the World Bank. The financial costs of the crisis are currently estimated to reach up to 0.4 percent of Colombia’s overall GDP.

“Colombia is very pleased and grateful for the international support to deal with the challenges of the migration wave from Venezuela,” says Alberto Carrasquilla, Colombia´s Minister of Finance. “Instruments like the GCFF will be of great help to facilitate the fiscal efforts by the government.”

Colombia is the third country to become eligible to benefit from the GCFF, which launched in 2016, with Jordan and Lebanon having been approved for $500 million to help then address the influx of refugees from Syria.

In declaring Colombia eligible for funding, the GCFF opens a process to mobilize coordinated concessional donor support for projects and programs in support of Venezuelans and host communities in Colombia.

“Countries that are generously hosting large numbers of displaced people are providing a global public good, so it’s right that the international community gives support where it is needed,” says Kristalina Georgieva, CEO of the World Bank. “I’m pleased that through the GCFF, Colombia will receive financial assistance to help thousands of vulnerable people, and the communities where they are living.”

The GCFF is currently supported by Canada, Denmark, the European Commission, Germany, Japan, Netherlands, Norway, Sweden, the United Kingdom and the United States.

The World Bank says it currently does not have any active loans or portfolio projects in Venezuela. In October of 2018, it issued a 62-page report about Venezuela titled “Doing Business 2019: Training for Reform.”

That report ranked Venezuela as 188^th out of 190 nations in terms of ease of establishing a new business. The nation’s score of 30.61 on a scale of 100 put it well behind Argentina at 58.80, Brazil at 60.01 and Mexico at 72.09.

Europe-based paper and board producer Smurfit-Kappa Group is among several manufacturers who have been unable to continue doing business in Venezuela under the presidency of Nicolás Maduro.