INTERNATIONALBANK FOR WORLD BANK R E T C N O E N STRUCTION PM AND DEVELO July 2002 No.5 A regular series of notes highlighting recent lessons emerging from the operational and analytical program of the World Bank`s Latin America and Caribbean Region COLOMBIA: DEVELOPMENT AND PEACE IN THE MAGDALENA MEDIO REGION A Vision for Development and Peace diagnostic phase, embodies a long-term vision for community-led, comprehensive development of the region. This aims to increase living standards and reduce violence Situated in the heart of Colombia, Magdalena Medio is one by creating the conditions necessary for relationships to of the poorest and most violent areas of the country. The develop among communities, NGOs, the business sector, region is composed of twenty-nine diverse local various levels of government and, as appropriate, the armed governments (municipalities) which share some common actors. characteristics such as proximity to the Magdalena River and the important role of the oil industry. Magdalena A Focus on Learning and Innovation Medio is a microcosm of the actors and issues underlying Colombia's armed conflict with guerrillas, right-wing paramilitaries, with the army battling for control while the The Program's vision is ambitious and dynamic, involving civilian population struggles to survive. The region an interactive process across two dimensions: (i) building contains great natural and productive wealth, although the program from the bottom up, working at all levels - access to these assets and the income they generate is community, municipality, sub-region, and region - and link- highly unequal, with 70 percent of population of 810,724 ing them with national policies and institutions; and (ii) de- below the poverty line. pending on the development issue being addressed, to put national policies into practice in the municipalities and re- The Program for Development and Peace in Magdalena gion, and/or help define national policies and programs Medio (PDPMM) originated from a proposal of the through local and regional actions. A flexible, continuous Catholic Diocese of Barrancabermeja to the national oil learning approach, and a phased program were required to company seeking solutions to the persistent poverty and translate this vision into action. increasing violence in the region. Its guiding principles were the need to involve and reflect the concerns of all the To support this process, the Colombian government ob- region's citizens, and the belief that poverty and violence tained a US$5 million Learning and Innovation Loan (LIL) are complex, interrelated problems which must be tackled from the World Bank and US$1.25 million from the national simultaneously. The Program, which began in 1995 with a oil company to finance the Magdalena Medio Regional New Studies Point to Need for Growth in Colombia Colombia needs to recover sustained economic growth of four percent a year until at least 2010 to reduce poverty to its 1995 level, according to two World Bank studies. The studies, Colombia Poverty Report, and Colombia Social Safety Net Assessment, analyze data to show that substantial gains of the 1980s and the first half of the 1990s in the struggle against poverty in Colombia have been wiped out by the country's recent economic crisis. They also call for reforms to Colombia's social safety net system to ensure that assistance is available to vulnerable groups, especially during economic crises. The report traces rising poverty levels to the economic recession that hit Colombia after 1996, causing a plunge in growth reaching negative 4.5 percent in 1999, a rise in inequality, a decline in macroeconomic performance, and a doubling in unemployment. "Even if positive growth is promptly re-established, it will take more than a decade to return to the poverty levels of 1995," says Carlos Eduardo Velez, who led the team that prepared the Bank's Colombia Poverty Report. (Download the reports from http://www.worldbank.org/co) 1 Development Project which started in the fall of 1998. evaluations, and (v) an ability to manage the risks related to The project's key learning objective was to test and refine the conflict. a participatory methodology and operational approach for realizing the Program's objectives. It aimed to: (i) de- As the project evolved, the CDPMM developed a clearer velop the capacity of the Consortium for Development understanding of how to effectively act as an agent of change. and Peace Magdalena Medio (CDPMM) to operate as a It complemented the existing knowledge and experience of change agent and program manager, (ii) strengthen the local communities and entities involved in project activities citizens' network as a vehicle for building social capital with relevant knowledge and experience, improving decisions and managing the program , (iii) provide technical sup- and outcomes, while simultaneously empowering those port and funding to community organizations to develop involved. and implement specific projects identified by citizens as a priority. Promoting Change through Participation The project was of particular interest to the Bank as it was one of the first lending operations in a new area: The Program is based on community and individual peace and development. In 1997 during a dialogue on the participation in the region's development. The starting point Bank's assistance to Colombia, Government and civil is recognition of the capacity and `initial state' of these society representatives identified this issue as the number actors, including existing organizations and previous one development priority. The project fits with the experience. From this base, the CDPMM works to strengthen Government's strategy of supporting regional and local the community organizations so that they are able to take initiatives which build social capital and address the root charge of their own development. (see Box 1) causes of violence, while pursing efforts at the national level to initiate peace negotiations with armed groups. Box 1: Citizen's Network and Municipal Proposals The citizen's network began as a voluntary association of citizens and organizations (referred to as a nucleo) An NGO as Change Catalyst in each municipality. The nucleo was to develop and promote agreement among key stakeholders on a municipal proposal setting forth the municipality's CDPMM's role in designing, leading and managing the long-term development priorities, and specific project was of critical importance to its success. Given activities and investments to start addressing these the characteristics of the region, it is unlikely that a priorities. By the end of the project, out of 29 participatory, community-led program could have been municipalities 23 nucleos were regularly operating, effectively managed by the government, (i) central and nucleo members became increasingly involved in government presence was weak, (ii) the armed conflict municipal decisions. The nucleos and municipal had led to mistrust, fear and polarization, (iii) planning authorities were brought together in a municipalities were weak and controlled by interest regional participatory planning system. In addition, groups including the armed actors, and (iv) the 10 networks of organizations and persons organized intermediate level of government had a record of paying spontaneously around common interests such as little attention to the municipalities covered by the community radio stations, youth, and producer program. A key lesson, highlighted by the Colombian associations. Government upon completion of the project, was that regional development and building conditions for peace The participatory methodology and operational model tested can be led by a regional (non-public) entity using public under the project proved effective at creating a longer term funds, an arrangement which provides flexibility for vision, strengthening human and social capital, mobilizing effective resource management and better resources and raising interest in the region, and starting a communication with communities. community-led process of improving basic services and investment. Perhaps the most striking achievement was the What accounted for this apparent success? The CDPMM increase in human and social capital: 23 nucleos and 147 was an independent entity enjoying high credibility organizations involving 8,625 persons have internalized the among stakeholders largely because its staff consistently vision and goals of the program. displayed a high level of integrity, commitment, and professionalism. Other critical strengths fundamental to Learning by Doing - A Focus on Investment success included, (i) effective communication of the fundamental principles of the Program, (ii) the ability to mobilize support and gain recognition, (iii) the ability to Project funding for community initiatives generated the promote alliances and attract public and private entities immediate interest of citizen groups who were anxious to take to the previously neglected region, (iv) openness to concrete actions to improve their situation. An important learning, including self and external performance element of the methodology being tested was the belief that 2 in order for small projects in isolated communities to Conclusions generate significant development impact, they must be linked strategically to municipal, sub-regional and regional development priorities. The nucleo, municipal proposal, The Project demonstrated that, for a participatory approach and regional planning system provided these strategic links. to succeed in such a complex and challenging environment, During the project, the CDPMM refined the approach there is no substitute for a design which explicitly further to favor more complex productive projects covering incorporates flexibility, close monitoring and analysis of the several municipalities. By bringing together organizations socio-political situation and a mechanism for feeding this in several municipalities to work on a shared objective, back into the program. A substantial variation in the rate these type of projects were seen as having a potentially of implementation and development can be expected based greater impact on the region's overall economic and social on the varied conditions in different parts of the region. development. Increasing the capacity of individuals and communities to take charge of their own development takes time, Community and producer organizations carried out 67 particularly for productive investment projects. investment project initiatives, and were actively involved in an ambitious health program. Contrary to original The Project contributed to the Government's strategic expectations, the majority of projects were for productive approach to development in regions experiencing conflict, activities (60 out of 67), with the remainder in education, notably the concept of delegating implementation to a institutional development, and peace/conflict resolution. In respected third party. The CDPMM has provided technical the case of more complex support to other entities which have initiated similar projects with higher development programs in technical requirements, nine other regions of investment costs and Box 2: Techniques for Empowering Producer Colombia. The project's risks, the CDPMM Organizations achievements have also learned a valuable lesson enhanced Colombia's - that complete feasibility The CDPMM developed a format for providing external tech- image and its ability to studies are required prior nical assistance that ensured the organization developing the raise funds to support the to embarking on the project was in charge of the process and appropriated the re- peace process. The key investment phase (see sults. The organization identified the technical assistance re- entities supporting the Box 2). quired, participated in formulating the terms of reference, and project - the National was actively involved in all stages of the feasibility study as Planning Department, oil company, UNDP and the The Project demonstrated the counterpart of the entity providing the technical assistance. Bank - learned to work that the community-led The CDPMM helped identify external providers with the ap- together in partnership process of transforming propriate technical capacity and willingness to work in this which resulted in a high initial ideas into manner, and supported the process with its staff. degree of commitment investment projects is and broad ownership of more time consuming "Benchmarking" compared the production processes of indi- the project. and difficult than vidual producers/firms with each other, with other sub-regions expected. During the in Magdalena Medio, and with other parts of Colombia, and, The Government, oil two and a half years of in some cases, internationally. This helped producers to better company and Bank the project, most of the understand the context in which their project was being devel- agreed to continue 60 productive initiatives oped, and the technical options, profitability, sustainability and support to the Program never fully entered the competitiveness of alternative approaches. through a follow-up investment phase, usually project approved in because of the time "Analysis of economic circuits" identified productive September 2001 (a required for the potential opportunities in urban areas and secondary towns through second LIL and oil beneficiaries' learning analysis of economic transactions in the particular locality, company funding totaling process and the backward and forward linkages of each economic activity, US$6.25 million); to be increasing complexity of production costs and efficiency of each activity. complemented by a the projects themselves. US$14.0 million three- By the end of the Project, year European Union the CDPMM considered that 76 percent of the 67 project project approved in early 2002. The Second Magdalena initiatives (accounting for 94 percent of the funding) either Medio Regional Development Project responds to new had good prospects or should be considered for learning challenges and focuses on building the Program's continuation of funding if certain conditions were met. sustainability and mitigating risks by shifting the locus of Thus, the Project established a solid basis to improve decision making and leadership from the CDPMM to local incomes and living standards. It also achieved significant and regional institutions, with communities continuing to immediate gains in health and education. play the lead role. 3 The Program is a long-term development effort which has Colombia at a Glance demonstrated a high degree of commitment and ownership. Although, they cannot be expected to 1980 1988 1995 1999 eliminate the armed conflict in Magdalena Medio, the Population (millions) 28.4 33.6 38.6 41.5 Program, together with the first Project, created Population growth rate 2.2% 2.0% 2.0% 1.8% conditions to facilitate a dialogue among contending GDP growth rate 4.1% 4.1% 5.2% -4.3% parties, set in motion a process for addressing many of the underlying social and economic causes of conflict, Unemployment and have laid the foundation for effective development Urban 7.71%* 10.3% 8.7% 19.7% interventions as the broader situation improves (see Box Rural 1.46%* 4.6% 5.0% 10.9% 3). Inflation Rate 26.4% 28.1% 19.5% 9.2% Government debt -0.7% -1.4% -2.3% -5.8% (% of GDP) Box 3: The National Peace Prize Real effective exch. rate 146.68 87.34 100.00 102.68 In December 2001, the Program received Colombia's National Peace Prize. The Prize is an instrument to Goods & Services (% of GDP) promote peace, humanitarian values, solidarity and Exports 11.0% 12.0% 14.8% 18.2% understanding among Colombians. It is awarded by a Imports 12.3% 10.2% 21.3% 19.2% jury of civil society representatives to an individual(s) * 1978 or entity(ies) who have contributed to the establishment of development processes for local or Poverty Indicators, National, Urban, and Rural Colombia regional peace leading to a solution to armed conflict. A year earlier the French government awarded the 1978 1988 1995 1999 Program a Human Rights prize for its work with National communities in the main city covered by the Program Poverty rate 80% 65% 60% 64% (see http:// www Fescol.org.co) Poverty Gap 46% 32% 29% 34% FGT P(2)2 32% 20% 17% 22% Extreme poverty rate 45% 29% 21% 23% US$ 2 per day poverty3 33% 19% 13% 16% Mean income per capita1 112 183 216 210 ******* Urban Poverty rate 70% 55% 48% 55% Poverty Gap 35% 23% 19% 26% FGT P(2)2 21% 13% 10% 15% Learn more about our work Extreme poverty rate 27% 17% 10% 14% US$ 2 per day poverty3 34% 5% 3% 5% Mean income per capita1 157 235 295 277 In the Latin America and the Caribbean Region: Rural Poverty rate 94% 80% 79% 79% http://www.worldbank.org/lac Poverty Gap 61% 43% 40% 44% FGT P(2)2 44% 29% 25% 29% ..and on Colombia Extreme poverty rate 68% 48% 37% 37% US$ 2 per day poverty2 59% 58% 29% 30% http://www.worldbank.org/co Mean Income per capita1 52 90 95 102 ..and for more data 1. Thoussand 1999 pesos, based on monthly household income. 2. Foster-Greer-Thorbecke index. http://www.worldbank.org/data 3. Based on Purchasing Power Parity Convertors from WDI database. To Subscribe to "en breve" please send an email to "en breve" might also be of interest to: "en_breve@worldbank.org" or write to: Name: Editor, En breve Institution: MSN I6-604 The World Bank Address: 1818 H Street NW Washington D.C. E-mail: 4