Washington D.C., June 1, 2001─The Federal
Republic of Yugoslavia (FRY) has become the newest member of the International
Finance Corporation, paving the way for IFC to mobilize private sector
investment and advisory work at a critical moment in the country’s economic
In a letter from IFC Executive Vice-President Peter Woicke to the FRY Deputy
Prime Minister, Miroljub Labus, Mr. Woicke warmly welcomed FRY as a member
and said that IFC looks forward to supporting FRY in its development and
transformation efforts. He added that IFC intends to provide vigorous
support to investment creation and private sector development, which needs
to be the driving force in the country’s economic recovery.
Woicke stressed the importance of rebuilding FRY’s financial sector. He
said IFC expects to assist the government in its efforts to restructure
the large banks as well as working on new investments with both local and
foreign banks. IFC will also help to develop micro-finance, leasing
and other instruments to broaden the range of financial services available
to businesses and the public.
Over the past few months, IFC has been actively engaged in project assessment,
identifying viable private sector companies that could benefit from loans,
investment, or technical assistance. Private sector firms in Yugoslavia
faced a very difficult business environment in recent years, but many appear
to have considerable potential, according to preliminary IFC findings.
IFC will also seek foreign investors both to partner local companies
and to undertake new investment.
The Swedish Government, through the Swedish International Development Cooperation
Agency, has set up with IFC a special trust fund facility of SKr 16 million
(approximately $1.5 million equivalent) for FRY, which has been an invaluable
resource in this assessment and re-engagement work.
IFC expects to provide advisory support in privatization and institution-building,
as well as technical assistance to small businesses through its international
donor-supported facility, South East Europe Enterprise Development (SEED).
FRY was accepted as a member of the World Bank on May 8, 2001, which was
a necessary prerequisite for IFC membership. Currently, the World
Bank gives policy advice and support for the re-launch of government privatization
plans. IFC expects to provide finance for key enterprises in conjunction
with this privatization.
Before membership was finalized, IFC and FRY held discussions on the issue
of past arrears. Several IFC loans for which banks in FRY were the
borrowers or guarantors are in arrears and the plan is to resolve these
arrears through loan restructuring within 12 months.
IFC expects to establish an office in Belgrade in the near future and its
operations will be supported by its regional hub in Istanbul.
The mission of IFC (www.ifc.org),
part of the World Bank Group, is to promote sustainable private sector
investment in developing countries as a way to reduce poverty and improve
people's lives. IFC finances private sector investments in emerging
markets, mobilizes capital in the international financial markets, and
provides technical assistance and advice to governments and businesses.