Statement by Mr Johan Wolfs, Netherlands Ambassador to Skopje

Let me start by thanking the Worldbank and the European Commission for organising this donors' meeting. The speeches of the Prime Minister, the Minister of Finance and the Minister of Labor and Social Policy made very clear why this meeting is necessary.
In August last year, we witnessed the signing of the Framework Agreement, in which the Macedonian leaders set ambitious targets in order to bring back peace and stability to the country. This will also have a positive effect on the stability of the region as a whole.
This donors' meeting is a sign that the international community is taking its role in the peace process seriously.

Last year the Netherlands Minister for Development Cooperation decided to double the bilateral assistance for the years 2001, 2002 and 2003 in view of the budgetary implications of the peace process. In 2002 the Netherlands intends to contribute this 45,4 million euro as follows.

First, macro-financial assistance. The Netherlands will make a new commitment for 2002 of 17 million euro which will be linked to progress in economic reforms as assessed by the Worldbank. The minister of Finance already referred to Macedonia's strong commitment in this respect, mentioning the changes in the payment system and reforms in public finance. In addition, we would like to underline the importance of the passing of the anti-corruption and anti-money laundering laws which might be considered as a promising step to more transparancy in both the public and private sector.
The assistance will be made available in 2002 as cofinancing to World bank loans Public Sector Management Adjustment Credit and Financial and Enterprise Sector Adjustment Loan.
With the 28 million euro we already made available last december the total Dutch macro-financial assistance for 2001 and 2002 therefor amounts to 45 million euro.This contribution will be made available under the assumption that an IMF programme will be in place. As mentioned by the Minister of Finance earlier today the Macedonian government remains committed to macro-economic stability through cooperation with the IMF in the design and implementation of IMF funded programmes.
Not only donors but also foreign investors will look first and foremost to the assessment of the IMF regarding the financial situation of a country. In a year after an armed conflict one of the major risks in bringing such a programme off track is the increase in military expenditures. Apart from close monitoring by the IMF of the programmes under execution the Netherlands government was encouraged particulary by the reassuring statement of Prime Minister Georgievski during the recent visit of our Minister of Foreign Affairs to Skopje that the government does not consider any purchase of new military equipment.

In the area of reconstruction and rehabilitation the Netherlands will make 2,1 million euro available, to be allocated in close collaboration with the European Commission. With the 5,5 million euro already committed last year, this adds up to 7,6 million euro for reconstruction activities.

The third element of the support asked for at this donors' meeting concerns the implementation of the Framework Agreement. Whereas needs for macro-financial assistance and reconstruction are relatively easy to assess, it appeared difficult to give a precise estimation of the cost of implementing the Framework Agreement. The Netherlands is pleased that it was able to assist in this exercise.
The Netherlands will reserve 7,5 million euro for expenditure in 2002 on the implementation of the Framework Agreement. Once programmes in various categories of the agreement become more concrete we intend to support these in cofinancing arrangements with other donors and international financial institutions so that coordination is warranted.

Apart from the three categories of assistance at this donors' meeting, the Netherlands recenty started new activities in areas closely related to the implementation of the Framework Agreement.This involves a package of in total 6,4 million euro for 2002, which will amongst others include activities to help stimulate employment, community development, professionalisation of the media, further development of the South East European University and humanitarian aid.

In addition, the Netherlands will continue its regular development cooperation with Macedonia. In 2002 7 million euro will be spent in the areas of education, agriculture and public finance.

Summing up: the Netherlands is looking forward to cooperate with its IMF and Worldbank constiuency member in getting the economy back on track.
Commitments made and progress achieved so far in Macedonia provide a hopeful sign for a prosperous and peaceful future. A future where we can have an investment conference instead of a donors' meeting.

Thank you.