Opening Remarks by Mr. Reinhard Priebe, Director Western Balkans, External Relations Directorate-General, The European Commission

Mr Michael Steiner, Special Representative of the Secretary-General of the United Nations,

Mr Bajran Rexhepi, Prime Minister of the Provisional Institutions for Self-Government,

Ladies and Gentlemen, colleagues and friends,

Good morning and, on behalf of the European Commission and the World Bank, a very warm welcome to this donor coordination meeting for Kosovo.

Let me start with a few points about today's meeting and its context.

In today's meeting we will take stock of where Kosovo stands.

First and foremost, this is a donor coordination meeting, not a pledging conference. It is a meeting about standards and progress, about continuing the international community's commitment to Kosovo. Together, we have ensured that Kosovo has successfully overcome the immediate post-conflict period and we are here together today to see how we can now work to ensure further development and sustainability of this development.

This meeting is about donors' co-ordination and not about status. This is not the place and today is not the moment to discuss any political issue related to the future of Kosovo. I invite all participants who wish to intervene during the day to keep this in mind. We subscribe to the SRSG's policy of " standards before status " which have been endorsed by the UN Security Council.

Today's meeting is the first with the participation of representatives of the Provisional Institutions. It takes place at a welcome moment in Kosovo after another round of democratic elections at municipal level. These are good signs of the transfer of powers achieved so far in line with UNSCR 1244.

We will hear during the day how UNMIK and the PISG will take joint ownership of, and face, the new challenges ahead:

• The first task of any government is to work towards better living conditions for the population, to create conditions whereby people can live their daily lives, in safety and security, without regard to race, religion or gender.

• Society depends on respect for the rule of law. Not only the fight against organised crime, corruption, terrorism - all important in themselves and for sustainable development - but the even more basic concept that the same law must apply to all and be respected by all. No question on this, no exceptions, no parallel legal systems or codes - for anyone.

• Returns, as throughout this whole region, are important. Kosovo must move forward and become a land of opportunity for its entire population. There can be no repeat of the recent shocking incidents in Pec/Peja, which not only discourage returns but also damage Kosovo's reputation.

• In addition to rule of law and equal opportunities for all, Kosovo's sustainable development also requires the establishment and implementation of the appropriate legal and regulatory frameworks and economic and administrative reforms. Securing electricity supply and public services, privatisation of Socially Owned Enterprises and restructuring of Publicly Owned utilities, proper billing and payment systems are all essential for the development of a vibrant private sector economy. With this, a favourable business environment can develop, domestic and foreign investment can be attracted.

• Such progress also requires improved co-operation with, and integration in, the region. The European Union, itself, is the most advanced successful model of regional cooperation in the world. Kosovo is not an island. We expect - and you need to ensure - cooperation within the region and in particular with the Federal Republic of Yugoslavia in key areas for your future development e.g. security, trade, energy, trans-European networks…

• Kosovo also needs to bring itself closer to Europe, its standard and rules. Irrespective of what may be the decision on final status, Kosovo's future, like that of the whole region, lies in Europe and thus in implementing European standards in laws and policies. I appreciate that our friends from across the Atlantic fully agree and are themselves giving important support to this policy.

• Last but not least, you also need to concentrate on building capacity - so as to ensure that you exercise public administration transparently, efficiently and constructively and that the development of Kosovo's resources, its young and eager population, its most promising asset, is guaranteed. Any transfer of powers should be linked to capacity-building and should be done as smoothly as possible, with the goal of establishing modern efficient public administration at all levels.

After four years of exceptionally high assistance, the coming period will inevitably be characterised by a lower level of financial assistance by donors, reflecting the gradual normalisation in the province and the need to invest also in less costly but equally important priorities such as the ones I have just mentioned. However, levels of assistance for Kosovo will remain high as compared to other parts of the region. We are here today to ensure that all of us, donors, will continue to assist you in meeting your medium-term economic prospects and priorities.

Let me go quickly through the agenda of the meeting.

As you can see, the morning session will mainly deal with the past, what has been achieved to date with donors' help, and thanks to the efforts of UNMIK and the Provisional Institutions for Self-Government.

Our afternoon session will be dedicated to the medium-term future (2003-2005) of Kosovo. The PISG will present its programme adopted by the Assembly last May, as well as the medium-term macroeconomic framework and public investment programme. We will then hear the IMF contribution on these issues as well as the conclusions of the World Bank from its recent report on policy priorities and medium-term public spending in Kosovo, and from UNMIK on their medium-term public investment priorities, including focus on some particular issues. Our discussions will also touch on the main political challenges including those I have outlined.

I am looking forward to an interesting meeting and would now like to invite my co-Chair, Chrik Poortman, to make an opening statement on behalf of the World Bank.

¹ Kosovo (Federal Republic of Yugoslavia) - UNSCR 1244