Ladies and Gentlemen,

I would like to join Catherine Day in welcoming you to this donor coordination meeting. I wish to extend a particular welcome to Mr. Labus, Deputy Prime Minister for the Federal Republic of Yugoslavia (FRY), Mr. Pitic, Minister of International Economic Relations in Serbia, and Mr. Ivanisevic, Finance Minister in Montenegro. We look forward to hearing from the delegation on the current situation in FRY and the government’s plans very shortly. I would like also to thank the UN – OCHA in particular – for their role in coordinating with the authorities and a number of international agencies the document on urgent needs prepared for this meeting.

As you know, our objective today is to discuss and develop a coherent approach to meeting FRY’s near-term urgent needs and plan the next steps for more medium term assistance for economic recovery and transition. While the actual donor pledging should take place later in the new year, today’s meeting is nevertheless an important event. Important in that it is the first occasion for FRY to approach the international community and set out its recovery needs. But, also, important as a first key signal that the international community is ready to engage with the FRY authorities on a program of financial and technical support – both in the short and medium term. Today's meeting holds the promise that, in time, FRY can be put back on a path to recovery and sustainable growth. It holds the promise that, equally importantly, its economy will begin to make the vital contribution to the development of Southeast Europe – missing for the last decade – that it so evidently has the potential to make.

You have in front of you a document that summarize current best estimates on the priority economic and social needs of the country during the remainder of this winter. These estimates have been put together through a collaborative process between the authorities, the various UN agencies and others. And it is very encouraging to see that a significant part of these needs are already in the process of being met. But it is also clear that there remain important areas in which additional assistance will be needed in the coming months. While the meeting today is not meant to result in direct financial commitments, it is our hope that more funding and/or direct, in-kind, assistance will become available shortly. Those of you who are able to note the assistance you are currently providing – or planning to provide – are encouraged to do so. This support will help the authorities and people overcome their most immediate challenge.

FRY's more medium-term challenge is to design and implement a comprehensive economic recovery and transition program – overcoming the legacy of many years of economic mismanagement and international isolation. Formulating such a program will take time, careful study and substantial debate following recent political changes. It will also require a close dialogue with the international donor community on issues of direction, speed and sequencing of reforms. There are many lessons of transition – and we must all seek to benefit from these lessons. As part of the mandate given by the international community, the European Commission and the World Bank will be reviewing the government’s evolving reform agenda with the authorities. Based on this review, an Economic Recovery and Transition Program Report will be prepared that will be submitted to a donor pledging conference planned to take place (as early as feasible in 2001). It is the intention to associate, as much as possible, individual donors with the preparation of this report. The economic program embodied in the report is expected to form the basis for a multi-year partnership between the international community and FRY – providing financial and technical support against specific policy commitments and delivery. Further details of the economic work to be undertaken in the coming months will be presented later today.

As part of this work, the European Commission, the World Bank, and the authorities will identify priority projects of a regional nature which could be supported under the Quick Start Package for Southeast Europe. This work would be closely coordinated with the Secretariat of the Stability Pact – as well as the EBRD and the EIB.

Allow me to say a word about World Bank assistance to FRY. We have initiated discussions with the authorities on IBRD membership. Conditions include, inter alia, membership in the IMF – on which the IMF will shortly update us. The main outstanding condition thereafter concerns the clearance of arrears which, because of their size, may take time. During this pre-membership period, however, the Bank will be able to be active in a number of areas. First, as mentioned before, we will play an active role in donor coordination -- together with the European Commission. Second, we will mount a program of economic and sector work as an input into the report for the donor pledging conference, and also to prepare the ground for our future lending program in FRY. Finally, we would be ready to receive and administer bilateral trust funds -- as we have done in a number of similar, pre-membership, situations. Such trust funds could be used to finance early projects in FRY or, alternatively, contribute to the clearance of FRY's arrears vis-a-vis the World Bank.

Let me say, in closing, how pleased I am to co-chair this important event. I am confident that we, collectively, will be able to make an important contribution to alleviating the country's immediate urgent needs and, subsequently, supporting the country's program of recovery and transition. This is a critical moment. This group of donors has been instrumental in supporting economic development in the other countries of the Region. Provided there is strong commitment to reform on the part of the authorities, these donors will be ready to assist FRY take its place as a vital and integral part of Southeast Europe's economy.