The World Bank approved a $100 million loan to support Serbia’s structural reforms, the first of two budget support loans aimed at reforming the state-owned enterprises, the lender said in a statement on Tuesday.
As part of its 1.2 billio euro three-year loan deal with the International Monetary Fund, Serbia needs to offload or reform over 500 unprofitable state firms that in 2013 generated losses totalling 51 billion Serbian dinars ($490 million). It must also trim deficit and cap debt.
The World Bank’s loan is a part of a $619 million programme for Serbia this year, but the bank will disburse the funds only if Belgrade presses on with public-sector reforms required by the IMF.
In the statement, Ellen Goldstein, World Bank Country Director for Southeast Europe said that unproductive state-owned enterprises represent a “serious drag” on the Serbian economy and a large burden for taxpayers.
“Resolving these … enterprises will release public funds for better purposes, cut losses to the economy, and release productive resources into the private sector,” Goldstein was quoted in the statement as saying.
The loan should also absorb the impact on the budget from payments of severance packages for workers from loss-making firms, and help Serbia which faces unemplyment rate of around 20 percent to reform its employment service and support redundant workers in finding new jobs, the World Bank said.
Source; Reuters
