WASHINGTON, June 23, 2015—The World
Bank Group’s Board of Executive Directors today endorsed the Fiscal Year
2016-20 Country Partnership Framework (CPF) for Serbia.
The CPF proposes a World Bank lending
program of up to US$1.6 billion and International Finance Corporation (IFC)
financing of up to US$600 million
over a five-year period aimed at
supporting Serbia in creating a competitive and inclusive economy, and,
through this, supporting integration into the European Union.
The Board of Executive Directors welcomed
Serbia’s steady progress in implementing structural reforms that would
bring macro-fiscal sustainability and create a market-oriented and competitive
economy, and they noted the Government of Serbia’s strong commitment to
these long-overdue reforms.
The CPF presents a strategy aligned
with the World Bank Group’s twin goals of reducing poverty and increasing
shared prosperity. It builds on the conclusions of the Systematic Country
Diagnostic, which highlights the importance of getting Serbia back to economic
growth. Growth in Serbia has historically benefited the poor and
vulnerable groups more than others. In order to get back to growth, Serbia
needs to create an export-driven economy, while, at the same time, facilitating
better access to the labor market for low-skilled and poor workers.
Under the CPF, the World Bank, IFC,
and the Multilateral Investment Guarantee Agency (MIGA) will engage in
a multi-faceted program that will aim to help Serbia attract the investment
it needs to create growth and employment.
“Serbia has a historic opportunity
to accelerate reforms and set out a path towards prosperity and integration
into the EU. We believe the current reform momentum will help bring back
growth, which is essential to poverty reduction, as growth in Serbia tends
to especially benefit the poor and disadvantaged. Apart from generating
growth, we believe that specific attention needs to be given to the creation
of employment opportunities for marginalized groups and lower skilled workers,
so that growth is also inclusive,” said Tony Verheijen, World Bank
Country Manager for Serbia and main author of the CPF. “The new
World Bank Group Strategy provides a comprehensive package of financial
and advisory support to help government achieve these objectives as well
as to prepare the country to become a competitive EU member state.”
The CPF will focus on two broad priorities.
In the first focus area of economic governance and the role of the state,
the World Bank Group will support efforts to achieve more effective
and efficient public expenditure management, enhance public administration
capacity to implement reform and deliver services, resolve more than 500
remaining commercial state and socially owned enterprises and improve the
performance of key state utilities and public transport companies.
“Creating an effective and efficient
public sector that facilitates private investment and delivers quality
services to businesses and citizens is a key condition to bringing back
growth and improving the life of people in Serbia," said Verheijen.
“We believe our efforts to help the government focus on core public sector
functions, spend less, and perform better, will create the space and opportunities
for the private sector to create the high value-added jobs Serbia needs.”
The second priority is private sector
growth and economic inclusion. Under this focus area the World Bank
Group will support government efforts to improve business regulation, create
a transparent and effective system of land and property management, and
improve the quality of infrastructure networks. IFC and MIGA support will
facilitate new opportunities for private sector investment. Finally, efforts
to enhance economic participation, in particular by the poor and vulnerable
groups, will include an emphasis on labor market regulation, improved assistance
to job seekers, and address short- and long-term skill gaps.
"IFC will be engaged
in areas that create employment, including the financial sector to support
SMEs, high value-added manufacturing, renewable energy projects, and private
sector participation in infrastructure projects through investments and
public-private partnerships," said Thomas Lubeck, IFC Regional
Manager for the Western Balkans. "IFC will continue to support
efforts to improve the investment climate and attract foreign direct investments
in Serbia, as well as engage in resolution of non-performing loans in Serbia."
The World Bank Group has had a long-standing
engagement on financial sector strengthening in Serbia. Given the
importance of access to finance for growth and development, a broad engagement
on this issue will continue to be part of the World Bank Group, with mutually
reinforcing support by IBRD, IFC, and MIGA and in close cooperation with
other development partners.
“MIGA remains committed to supporting
Serbia, one of the regional economies disrupted by the global financial
crisis,” said Dan Biller, Sector Manager, MIGA. “In
particular, our backing of the financial sector deepens credit markets,
which, in turn, supports ongoing lending to small- and medium-size businesses,
stimulating growth and job creation. We hope in the future to be able to
support other investments, such as infrastructure, to help support Serbia’s
Given the high risks that natural disasters
pose to economic development and the impact of climate change on the poor,
responding to climate change and disaster risks will be a cross-cutting
theme of the CPF.
The World Bank currently supports eight
projects in Serbia with a commitment of US$1.2 billion, while IFC has a
committed portfolio of US$417 million in 25 projects, and MIGA is currently
supporting seven projects with a gross exposure of US$860 million.