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Cablegate: Conditional Cash Transfers: For Public Good or Public Votes?

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INFO RUEHBO/AMEMBASSY BOGOTA
RUEHBR/AMEMBASSY BRASILIA
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UNCLAS BOGOTA 003984

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E.O. 12958: N/A
TAGS: SOCI ECON PREL CO
SUBJECT: CONDITIONAL CASH TRANSFERS: FOR PUBLIC GOOD OR PUBLIC VOTES?

1. (U) Summary. Colombia's conditional cash transfer program,
called "Familias en Accion", receives notable support and praise
from the international financial institutions. The World Bank
highlights that Familias en Accion significantly contributes to
poverty alleviation and equity of opportunity and peace. Critics
of the program, such as former President Pastrana, claim that
President Uribe is using the program and its subsidies to increase
his chances of reelection. The GOC maintains that the program has
reduced malnutrition and child labor rates as well as improved
vaccination rates, poor families' consumption of basic household
goods, and school attendance. End Summary.

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Overview

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2. (U) The Familias en Accion conditional cash transfer program
began in 2001 under President Andres Pastrana (1998-2002) with the
support of Plan Colombia, the Inter-American Development Bank (IDB)
and the World Bank (WB). The program offers low-income families
(approximately the bottom 15 percent) subsidies, i.e. cash
transfers, to improve the nutrition and education of their
children.

3. (U) Initially the program only reached 300,000 families, but
the Uribe administration widened it to currently reach 2.4 million
families in more than 1,000 municipalities and in each of
Colombia's 32 departments. The GOC's goal is to reach 3 million
families by mid-2010. The program forms part of the government's
assistance to internally displaced persons (IDPs) -- an estimated
350,000 families that suffered forced displacement. The GOC plans
to channel an additional 100,000 IDP families into the program in
2010. The GOC budgeted over US$ 2 billion for the program to cover
the period between 2006-2010.

4. (U) Familias en Accion also supports the government's extreme
poverty reduction strategy "Juntos." This program aims to provide
integrated assistance in nine areas: identification/documentation,
income and employment, education, health, nutrition, habitat,
family dynamics, assistance distribution, and access to justice.
Under Juntos, social workers monitor families living in extreme
poverty, referring them to the government's various programs --
including Familias en Accion -- depending on needs.

--------------------------------------------- ---

Critics Say It is a Political Tool to Gain Votes

--------------------------------------------- ---

5. (SBU) Familias en Accion is run out of Accion Social, the
government's social programs agency in the Office of the President.
The program, however, has come under criticism from Uribe's
opponents. Former President of Colombia Andres Pastrana views the
program as a political tool for Uribe to garner more votes for his
potential reelection. He stresses that the program requires
special oversight. Today's presidential candidates complain that
the program is a form of charity from the President's office for
roughly five million Colombians, who presumably believe that Uribe
himself is doling out the money, which in the end will earn him
more votes (provided the referendum allowing a third term goes
forward).

6. (SBU) Opposition Liberal Party Senator Cecilia Lopez also
stressed that the program is not adequate to fight poverty and that
the GOC should provide jobs to the poor instead of money.
Alejandro Gaviria, Dean of the Economic School of los Andes


University, argues that this cash transfer program increases
unemployment and the fiscal instability of the Government.

7. (SBU) Senator Lopez Montano told the press that the program
should be temporary, focused, and depoliticized, and he accused
Uribe of doing the opposite -- creating a massive and politicized
program. Critics also accuse the GOC of arbitrarily expanding and
setting beneficiary targets, rather than basing them on poverty
statistics or expressed need.

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The Multilaterals Defend the Program

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8. (SBU) Since its inception, Familias en Accion has had the
support of multilateral institutions, which have replicated similar
programs in Mexico (Programa Progreso), Brazil (Bolsa Familia) and
elsewhere. Representatives of the IDB and World Bank expressed to
EconOffs their support of Colombia's conditional cash transfer
program and discarded the "vote-getting" argument as political
noise.

9. (SBU) Polly Jones, Principal Operations Officer at the World
Bank, told EconOff that the Bank is currently supporting the
program with four loans, and positive findings from its evaluation
in 2005 led to an expansion of the program. The Bank highlights
the gains in poverty alleviation and equity of opportunity and
peace. Familias en Accion, according to the Bank, is credited with
helping eradicate extreme poverty, reducing spatial differences in
poverty, strengthening the social safety net system, and removing
access barriers to education and health services in high conflict
zones.

10. (SBU) Ana Lucia Munoz, specialist in Social Development at the
IDB, noted the program was conceived as a temporary policy to face
the economic crisis of 1999. However, the positive results of the
program convinced the IDB to continue supporting Familias en Accion
with two additional loans. The IDB is now in the process of
preparing a third loan for Colombia's highly-commented, conditional
cash transfer program.

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GOC's Position

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11. (SBU) Juan Carlos Caiza, Presidential Adviser for Departments
and Municipalities, told EconOff that the Uribe administration has
followed the direction of Juan Carlos Echeverry, the designer of
the conditional cash transfer program during Andres Pastrana's
presidency. Caiza added that Luis Alfonzo Hoyos, former Director
of Accion Social, was a technocrat who had administered the program
without the use of political criteria. Caiza stressed that this
program will continue after Uribe's term, as it did after
Pastrana's, because the results are positive.

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Results of Familias en Accion

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12. (U) According to the GOC's evaluation, consumption of basic
household goods, such as clothing, school supplies and transport,
increased between 15 and 19 percent. Children consumed 1.2 times
more protein on average than without the program. Chronic
malnutrition in children living in rural zones decreased by 10
percent. Immunization rates among rural children increased by 12
percent. School attendance rates rose by 12 percent in rural
areas, and by 6 percent in urban areas, where attendance was
already higher. Child labor (for 10-13 year-olds) decreased by 6
percent in rural areas and reduced the intensity of the workday of
14-17 year-olds in urban areas (while work by their mothers
increased).

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Comment

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13. (SBU) The qualification criteria appear objective and there is
no evidence that the program has been manipulated for political
purposes. In certain districts, beneficiaries of the program voted
against Uribe in 2006, and those families are still receiving their
cash transfers. However, separating the program from the Office of
the President would demonstrate a higher degree of transparency.
NICHOLS

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