About the relationship between the World Bank, the IMF and Colombia

Colombia is an exceptional case about the incidence of World Bank politics because it has received loans from the Bank almost every year since 1949, becoming the country its major recipient in per capita terms, and the Bank its main individual source of external credit. Moreover, the Bank has been promoting international financing of the country, through Consulting Groups since 1962. But, surprisingly, despite the insistence of the Bank on the adoption of orthodox policies in fiscal, trade, and foreign exchange matters, the Colombian government has been taken most of the crucial decisions with little influence of this organization, with two noticeable exemptions (years 1965 and 1985), both in conjunction with critical negotiations with the IMF. Accordingly, the World Bank's main influence on Colombian macroeconomic politics has been reduced to the amounts and composition of public investment, and the amounts and composition of capital accumulation in the country, as well as the sectorial policy and institutional development in the specific areas of interest of the diverse projects supported by the Bank's loans (Londoño & Perry, 1985).

The relation between Colombia and the International Monetary Fund (IMF), is even closer. Colombia was one of the 45 countries of the Bretton Woods Conference and is a member of the IMF since 1944. Accordingly, there has been a close collaborative relationship between the IMF and the Colombian Finance Ministry and the Central Bank (Banco de la República). Therefore, the IMF has been very influential in the formulation of Colombian macroeconomics politics through the years, especially in fiscal, trade, and foreign exchange topics; and key support on the balance of payments before the World Bank (Junguito, 2015).

On September 25, 2020, the IMF approved an extension of a Flexible Credit Line (FCL) of USD 17.200 million to Colombia, until April 30, 2022, with the purpose of strengthening national liquidity during the COVID-19 pandemic, becoming the first country in the IMF's history in asking for an FCL in 2009 (Banco de la República, 2020; Dinero, 2020; IMF, 2020).

In 2019, the IMF has been projected for Colombia an economic growth of 3,4% for 2020, of course, unaware of the unpredicted and unprecedented global crisis that we are facing (Aristizábal, 2019; IMF, 2019).


Sources:

Aristizábal, M. (2019, October 15) Fondo Monetario Internacional mantuvo crecimiento de Colombia en 3,4% para este año. In La República. Retrieved from: https://www.larepublica.co/globoeconomia/fondo-monetario-internacional-mantuvo-crecimiento-de-colombia-en-34-para-2019-2920945

Banco de la República (2020, September 25) Fondo Monetario Internacional (FMI) aprueba ampliación de la Línea de Crédito Flexible (LCF) para Colombia a USD 17.200 millones. Retrieved from: https://www.banrep.gov.co/es/fondo-monetario-internacional-fmi-aprueba-ampliacion-linea-credito-flexible-lcf-para-colombia-usd

(2020, February 10) A Fitch no le molestaría un desembolso del FMI a Colombia. In Dinero. Retrieved from: https://www.dinero.com/economia/articulo/que-piensa-fitch-sobre-el-desembolso-del-fmi-a-colombia/302241

Junguito, R. (2015). El Fondo Monetario Internacional y el Banco de la República. In Historia del Banco de La República, Bogotá, Colombia, 563 - 638. Retrieved from: https://repositorio.banrep.gov.co/bitstream/handle/20.500.12134/7007/13.%20El%20Fondo%20Monetario%20Internaciona%20y%20el%20Banco%20de%20la%20Rep%C3%BAblica.pdf?sequence=1&isAllowed=y

IMF (2020, February 21). Colombia: Declaración al término de la misión sobre la Consulta del Artículo IV de 2020. Retrieved from: https://www.imf.org/es/News/Articles/2020/02/21/mcs-022120-colombia-staff-concluding-statement-of-the-2020-article-iv-mission




IMF (2020, April 9). Comunicado de Prensa Nº 20 / 142. El Directorio Ejecutivo del FMI recibe una solicitud de acuerdo de Línea de Crédito Flexible para 2020 con Colombia. Retrieved from: https://www.imf.org/es/News/Articles/2020/04/09/pr20142-colombia-imf-executive-board-receives-request-for-2020-flexible-credit-line-arrangement




IMF (2020, April 17). Comunicado de Prensa Nº 20 / 369. El Directorio Ejecutivo del FMI Concluye la Consulta del Artículo IV con Colombia correspondiente a 2020. Retrieved from: https://www.imf.org/es/News/Articles/2020/04/17/pr20169-colombia-imf-executive-board-concludes-2020-art-iv-consultation