Accessibility links

Breaking News

Yugoslavia: Economic Recovery Plans Require Vast Sums

Washington, 28 April 1999 (RFE/RL) -- The economic costs of the Kosovo crisis are getting intense scrutiny in Washington by Yugoslavia's neighbors and the world's financial leaders.

No one yet is even considering what the costs will be of rebuilding Yugoslavia and resettling hundreds of thousands of refugees once the bombing is ended and peace has been restored.

For now, the International Monetary Fund (IMF) and the World Bank are attempting to put some numbers to the costs for the neighboring countries who are handling the refugees, seeing their trade dramatically reduced and tourist income vanish.

The difficulty, say bank and fund officials, is trying to get a handle on a very fluid situation to which there is no end in sight.

The European Union's Commissioner for Economic, Monetary and Financial Affairs, Yves-Thibault de Silguy, says he's heard estimates as high as $30 billion. He told a press conference in Washington:

"It will be a high cost -- by comparison with Bosnia-Herzegovina which was five billion dollars. It will be higher probably very much higher. How much, I don't know. I said to you I have heard figures past $30 billion, but there is no evidence, just a figure to say it will be perhaps 10, perhaps 20, perhaps 25, perhaps $30 billion. Nobody knows at this stage. "

The World Bank and the IMF did a quick study on estimates of costs to Kosovo's neighbors assuming the fighting ended soon. That estimate approached $2 billion and World Bank President James Wolfensohn said it was clearly only an early guess.

A report on the study said that if the conflict drags on through the rest of the year, the humanitarian costs alone of dealing with as many as 750,000 refugees could easily exceed $300 million.

If the conflict ends quickly, the study suggested that in addition to $139 million in emergency humanitarian aid, the countries of the region would need $668 million in balance of payments help just to keep their economies going.

In all, it said, even on the optimistic side, the costs could easily exceed 2.5 percent of the region's GDP.

Officials from most of Kosovo's neighbors -- Albania, Romania, Bulgaria, Macedonia, Croatia and Hungary -- participated in a special meeting in Washington Tuesday night, called by the IMF, the World Bank and the United Nations, in an attempt to put some real figures to the needs of these nations.

The results of that meeting are to be revealed later today Wednesday. De Silguy says the needs of each country are so different that the only way to fully evaluate the situation is to send missions to each country for a complete on-the-ground review. That's what the European Commission is doing, he says, as part of its aid program.

The EU has provided 800 million euros in humanitarian assistance and is providing additional balance of payments support in coordination with the IMF of 20 million euros for Albania. A proposed 60 million euro balance of payments package for Bosnia is currently before the EU Council of Ministers, says de Silguy, and packages of 100 million euros for Bulgaria and 200 million euros for Romania are being worked on within the EU.

Another way to help the countries which are on the front line of the Kosovo crisis, says de Silguy, is by buying more of their products:

De Silguy said: "Economic recovery driven exclusively by internal factors should allow the European Community to absorb more exports from countries on the front line of the crisis."

The finance ministers and central bank governors of the group of seven major industrial nations said Monday they would support efforts coordinated by the bank and fund to deal with the serious economic effects of the conflict.