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Yugoslavia: World Gears Up For Balkan Aid Effort

  • Breffni O'Rourke

Prague, 13 July 1999 (RFE/RL) -- The International community today took a step toward the rebuilding of Kosovo and, it is hoped, also toward the broader goal of anchoring the Balkan region safely into the European mainstream.

The World Bank and the European Union's Executive Commission co-chaired a meeting in Brussels which brought together their officials with finance ministers of the group of seven leading industrial democracies (G7), officials of the United Nations, the European Investment Bank, and the European Bank for Reconstruction and Development.

The one-day meeting was the first session of the so-called "High Level Steering group on Economic Reconstruction in the Balkans." World Bank spokesman Phillip Hay talked with RFE/RL about the meetings from Brussels:

"The meeting today is to construct a 'road map,' designed to take Kosovo out of a humanitarian aid phase resulting from the recent hostilities, and eventually, in concert with the neighboring countries in Southeast Europe, to bring them all into the mainstream of the modern European economy." This therefore could probably be described as a historic moment. That is, provided the political will of the international community endures through the lengthy time period needed to pull the Balkan region out of its economic and political instability.

The first priority of the meeting is to set out the methodology for helping Kosovo. World Bank officials note with some pride that the move to rebuild the province comes just weeks after hostilities ceased there. A World Bank team is leaving for the Serbian province this week to make the first full-scale assessment of damage and to list requirements for a return to economic health. This team will report back to the first international donor conference on Kosovo which takes place in Brussels on July 28. As spokesman Hay says, this means the donor countries will have a clear idea of the amount of money needed, and will have their "check-books" on hand.

Until the assessment team returns, there is no reliable guide to exactly what is needed to help Kosovo. Officials say however that initial indications are that the scale of devastation is not as great as was at first thought.

The economy of the province was in any case in poor shape even before the latest crisis. It contracted by some 50 per cent between 1991 and 1995, unemployment was high and the province was deeply in debt. The World Bank says that after emergency work such as the restoration of damaged homes is finished, the long-term challenge will be to put Kosovo on a sustainable transition course toward a market economy. That will require sustained effort, and of course this has a broader dimension. Phillip Hay says:

"You cannot look at rebuilding Kosovo without looking at the wider regional implications of economic disarray in Southeast Europe. I think it is fair to say that not only Kosovo, but countries like Romania and Croatia, and obviously Albania and Macedonia, which sheltered tens of thousands of Kosovar refugees from the hostilities, all these countries have really suffered."

The broader aim of today's high level Brussels meeting was therefore to begin the process of reviewing how to help the region economically as a whole -- Bulgaria and Romania as well as the small states around Serbia.

As officials put it, that involves, in the short term, consideration of how to resume and rejuvenate regional trade, and also to help Balkan states bridge balance of payments gaps this year.

The World Bank estimates that six countries will have a financing gap of some $1 billion for 1999. The six are Albania, Macedonia, Bosnia-Herzegovina, Croatia, Bulgaria, and Romania. International assistance has already covered about half this gap, but some $450 million is still needed.

In addition, the high level group wants to ensure that the considerable structural reform efforts already made by the Southeast European countries do not stop and that they continue to widen and deepen. What is sought is a prosperous regional trading system bringing overall well being, which will eventually help these countries into the mainstream of Europe.

As the World's Bank's Southeast Europe coordinator, Christiaan Poortman, put it, the coalition of international partnerships this week formally starts the process of helping the region forge a new, more promising direction for itself. He vows that the international community will stay committed to helping Southeast Europe long after the television cameras and the refugee camps are gone.