The World Bank has allocated $619 million for Serbia this year but will disburse the funds only if Belgrade presses on with public-sector reforms required by the International Monetary Fund, the Bank’s country manager said on Wednesday.
The lending includes two budget-support loans of $200 million each. The rest will be used to improve the business climate and the efficiency of public administration, Tony Verheijen, World Bank’s country manager, told Reuters.
Last month, the IMF’s Executive Board approved a three-year, 1.2 billion-euro loan to Serbia, which requires the Balkan country to curb its budget deficit and cap public debt.
Verheijen said the first $100 million tranche would be disbursed in three weeks. Another $100 million will follow at the end of the year, when Serbia completes the privatisation of 512 loss-making state-owned enterprises.
Another $200 million for budget support will also be disbursed at the end of the year if Serbia introduces professional and independent management in three major public companies — power utility EPS, the road-maintenance company Putevi Srbije and railway operator Zeleznice Srbije.
“They (the government) could use this money to replace more expensive debt with cheaper debt,” Verheijen said on the sidelines of an economic forum at the Kopaonik ski resort, some 250 kilometres (155 miles) south of the capital Belgrade.
To support the reform of the real estate valuation system, the World Bank will approve $44 million later this month. Two loans totalling $75 million and $100 million will be approved in the summer to help Serbia improve public administration and the business climate.
“We are working on a five-year strategy for Serbia which will be presented in summer,” Verheijen said, adding that the World Bank’s programme over the next three years would be closely linked to the IMF loan deal.
Source; Reuters
