Accessibility links

Breaking News

Bosnia: New Member Welcomed By The IMF, World Bank

Washington, 2 October 1996 (RFE/RL) -- As the newest member of the International Monetary Fund (IMF) and the World Bank, the first delegation from Bosnia-Herzegovina could have expected to receive a warm, but perfunctory, welcome to the institutions' annual meetings.

But Bosnia's welcome was extraordinary.

IMF Managing Director Michel Camdessus took time in his opening address to the meetings Tuesday to congratulate Bosnia on the "first steps" it has taken toward rebuilding a peaceful country.

World Bank President James Wolfensohn used his opening speech to recall his visit to Sarajevo last April where he saw the "magnitude of the challenge facing the country." He said that he was "profoundly moved by the courage and hope of its people."

Most importantly, Wolfensohn said that the bank has already begun to help with the "massive task of reconstruction."

In a report to donor nations issued this week, the bank said that most of the $1.8 million pledged at the donor conferences it called in December and April has been translated into commitments for specific programs. It said it has put under implementation $880 million in urgently needed reconstruction and rehabilitation projects in the war-torn country.

However, it added, while about $558 million worth of the money has been disbursed for critical projects, the remaining about $330 million under implementation is on hold until more nations honor their pledges. It said another $500 million or more could be easily used between now and the end of the year.

The impact of these moneys has already been tremendous, says the bank. In August, the first train in four years departed from the port of Ploce to Sarajevo on newly-rehabilitated rails while the Sarajevo airport was opened to commercial air traffic.

It says the three principal power generation plants and four main transmission lines are being repaired and district heating installations in Sarajevo are being renovated so that 32,000 flats in the city will have heat this winter. Repairs to more than 15,000 flats and private homes are underway around the country, according to the bank, and essential social support supplements are being made monthly to over 400,000 needy citizens.

Bosnian Prime Minister Hasan Muratovic, who was invited to address the meetings on the opening day, said that if it hadn't been for the World Bank's efforts -- raising donor money and quickly releasing its own loans -- Bosnia would now be in total catastrophe.

Still, he told the assembled finance ministers and senior officials from the fund and bank's 181 member nations, Bosnia is only now emerging from a "devastating period of war and destruction." He pointed to the death toll, the destruction of almost all of the country's infrastructure and the fact that 75 percent of the work force is unemployed.

He said Bosnia is now entering "an extremely important period of setting up of the state structures, government and institutions" and this is when it will most need the full support of the world.

Muratovic asked that the IMF move ahead quickly in establishing a central monetary institution and a monetary system so that the country can begin to have a normal economic system. Under the Dayton accords, the IMF is to appoint a foreigner to be governor of a new central bank for Bosnia for six years, with three vice governors to be named from each ethnic group within Bosnia-Herzegovina.

He also asked that other nations offer "quick-reaction credit lines" to rehabilitate existing companies and develop new firms. Only credit lines, said Muratovic "can re-start the economy."

And he urged donors to honor the pledges they've made so far while making new promises at the next donor conference to be held late this year.

World Bank officials add that the Serbian area, Republika Srpska, needs to catch up with the rest of the country now that the sanctions have been lifted. One bank official says that they have been in close discussions both with the federal authorities and Srpska officials and have found "a striking similarity in policy objectives."

The bank's resident representative in Sarajevo, Rory O'Sullivan, told a seminar in Washington earlier this week that getting assistance into the Serbia area will "itself start driving the (two) economies closer together."

Underlining the effort at real reconciliation, the 10-member Bosnia delegation to the annual meetings includes two officials from the Republika Srpska, including Finance Minister Novak Kondic. He told the seminar that Srpska has "no reservations towards the development of economic relations jointly with the federation and we shall do our utmost to make this happen."