PRIVATIZATION
Banco de Colombia had only strictly commercial objectives for its investment in CCA, and the enterprise already had attained a relatively high level of efficiency at the time of the sale of shares. However, some potential additional increases in productive efficiency can be expected from the policies to open up the economy and from the partial withdrawal of state support, particularly since 1992, with the prospective privatization of Banco de Colombia. The potential permanent fiscal gains also should include a valuation of the effect of the complementary policies that increased CCA's allocative efficiency by allowing it to penetrate previously closed market segments: jeeps and commercial vehicles. This impact can be offset to a certain extent by the losses the enterprise could sustain as a result of the increased allocative efficiency overall, arising from the openness to international trade. Revenue from the sale of the shares represented a substantial improvement in the equity position of nationalized banking, possibly indirectly increasing the state's fiscal receipts by promoting a higher sales price for that banking. Meeting the Government's Objectives with the Sale of Shares The sale of CCA enabled the government to comply with banking legislation about keeping goods received as payment and to recover the credits granted by the nationalized banking institutions. Conclusions CCA's financial position was relatively sound before the sale of shares. This eased the way for privatization. The sale of shares was not closely linked to an explicit government privatization policy in the industrial sector, but was covered by preestablished legislation for the financial sector. Efficiency before Privatization The relatively high efficiency of the CCA is a result of measures to rescue it from its financial crisis and of the independence and quality of the current administration, rather than of a privatization policy. Preparatory Measures CCA's entire arrangement with creditors and recovery process can be viewed as preparation for sale of the enterprise under the most favorable possible conditions.
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