Ladies and Gentlemen, Good morning,

I wish to join Mr. Günter Burghardt in welcoming here Colonel Brown of KFOR and Mr. Dixon and Mr. McNamara from UNMIK. I had a chance to meet Mr. Kouchner last week when Mr. Wolfensohn and I visited Kosovo to see for ourselves the damage inflicted by the crisis and to meet with local communities as well as with our international partners. We visited Pristina, Dzakovica and Kosovska Mitrovica, and talked to many returnees who shared their traumatic experience with us. We were touched by the human tragedies we heard of and the physical destruction we saw. But what gives hope is that the people in Kosovo, without waiting for outside assistance, took the initiative immediately as soon as the conflict was over to rebuild their houses, reopen schools and clinics, and got on with their lives. I would like to pay tribute to KFOR, UNHCR, ECHO, as well as the NGO community for their extraordinary efforts helping the population of Kosovo to return and restart their lives.

Let me now briefly review what we hope to achieve today. First of all, we wish to inform you about the status and preliminary results of the ongoing damage assessment work. Second, we would like to share with you the most recent information on humanitarian and other emergency needs, and the status and financing requirements of the civil administration. Third, we would like to set out a plan for next steps, and finally, we welcome and request your pledges today and in the immediate future for the support of the international effort of immediate assistance for Kosovo.

We are fully aware that it would have been much better if we could have provided you with the background documents well in advance of the meeting. But we should bear in mind that we have peace in Kosovo for only a month and a half, and that we are facing a rapidly changing situation on the ground. Thus our knowledge of the situation and the needs is obviously tentative. The financing requirements you will be presented today are therefore not complete and will have to be seen as best estimates which may have to be modified as we deepen our knowledge. We hope however, that those delegations that are in a position to do so today, will make pledges for humanitarian and other emergency assistance, and for funding recurrent costs of the civil administration. Those who are not in a position to pledge today, we hope, will be able to do so soon after the meeting.

There are five important messages that I would like to leave with you:

First, it is imperative to address the human challenge in rebuilding Kosovo. It is not only the burned houses and destroyed schools that have to be fixed, but also people’s psychological wounds that have to heal. We need to be able to help the people of Kosovo, especially the children, to get over the trauma they have suffered, by providing hope for a better life.

Second, UNMIK needs the full support of the international community both in terms of technical and financial assistance to establish an efficient interim administration in Kosovo and lay the foundation for a future local administration. The need for recurrent financing is immediate. Currently available funding through the UN trust fund is running low, and I would like to urge donors to provide sufficient funding for recurrent costs, at least during the critical initial months before an appropriate level of self-financing can be achieved.

Third, our efforts to help rebuild Kosovo must be comprehensive and not limited to the reconstruction of damaged economic assets. Creation of employment and restart of economic activity will be key near-term tasks. Much of the challenge, however, will be rebuilding an economy that had already fallen into substantial decline prior to the latest crisis, and ensuring a sustainable economic recovery based on transition from a socialist to a market-oriented economy. While physical damage is probably less severe than expected, needs are much higher due to a chronic lack of maintenance which put a heavy toll on infrastructure and enterprises. Kosovo will need considerable assistance in mounting a rapid development program to overcome many years of neglect by Serbia and start its transition to a market economy.

Fourth, international assistance to Kosovo needs to be quick, generous, and additional. It must be quick to respond to the most urgent humanitarian needs and the funding requirements of the civil administration, including public sector employees. Assistance must also be sufficient to allow Kosovo’s economy to get on a sustainable growth path, and should be additional in order to avoid the diversion of aid from other areas in need.

Fifth, effective coordination of international assistance will be critical to the success of this complex undertaking. Jointly with our partner, the European Commission, we will continue to organize conferences like this to inform donors about the priority financing requirements and will operate a database which would serve as a clearinghouse of information on needs and donor programs. As many of you know, a website maintained by the joint office of the European Commission and the World Bank is already in place, which provides information on reconstruction and development in the region, including Kosovo. Finally, appropriate coordination in the field will be essential to ensure efficient implementation of donor programs.

Now let me briefly describe our own plans in support of Kosovo. Given our legal constraints – due to the fact that Kosovo is part of a non-member country – our assistance program will have to be based on exceptional, non-regular financing and will have to be limited in scope. We plan to focus on the following areas:

First, assistance in designing the reconstruction and recovery program. Our colleagues in the Bank, IFC and MIGA are joining forces with IMG, the EC, EBRD and others to help define a medium-term reconstruction and recovery program that will serve as a basis for future donor pledging conferences.

Second, policy advice in economic management, including building government institutions. Together with the IMF, we have been advising UNMIK on budget needs and priorities, fiscal policy, exchange arrangements, banking and payments systems, external trade, and private sector development, and plan to continue this collaboration during the coming months.

Third, selective financial assistance for reconstruction and economic restart activities, support of government budgets and institutions, and initial transition and social reforms. We have already launched several missions to prepare the creation of a community fund, and other operations in the areas of budget support, agriculture, SME development, and banking and private sector development. IFC is part of this work which is also coordinated closely with the EC, EBRD and USAID in the field.

We hope to have about $60 million in Bank resources available over the 12-18 months, subject to approval by our Board of Executive Directors.