The World Bank's Pledging Statement

by Ms. Marie-Helene Bricknell, Country Manager

Mr. Chairman, let me start with the bottom line. I am pleased to confirm the World Bank's pledge of $30 million for balance of payments support. This support is in addition to another $20 million for development assistance planned for this calendar year.

The conflict prompted us, as many of you, to drastically revise our assistance strategy for FYR Macedonia. A week after the signing of the Framework Agreement our new strategy was ready for consideration by our Board of Executive Directors. It proposed exceptional assistance to support the peace process and FYR Macedonia's post-conflict recovery. While FYR Macedonia was formally graduating from IDA, the World Bank's concessional lending facility, from July 2001, the World Bank's Board agreed to an exceptional IDA allocation of $35 million for one year (FY02).¹ In addition, another $15 million in IBRD lending was proposed once FYR Macedonia regains creditworthiness for IBRD loans.

The implementation of this strategy was contingent on the passage of the constitutional amendments set out in Framework Agreement. Since this action, critical to the implementation of the Agreement, took place in November last year, we were ready to move quickly with our first operation, a $15 million Emergency Economic Recovery Credit that was approved in December. This operation has been cofinanced by the Government of The Netherlands in an amount of $25 million. (Of the combined amount of $40 million, $26 million has already been disbursed.)

Together with the authorities, we have also managed to finalize the second component of our balance of payment support, the $15 million Public Sector Management Adjustment Credit. This operation, which supports the government to build key institutions and strengthen accountability, transparency and efficiency in the use of public resources, is awaiting Board approval in early April.

In addition to these two IDA credits that provide critical balance of payments and budget support, we have embarked on the preparation of a $5 million Community Development Project to foster social cohesion and a $15 million IBRD loan for an Education Project to develop human capital and help decentralization of education as envisaged under the Framework Agreement.

Thank you, Mr. Chairman.

¹ To reflect the exceptional nature of this IDA allocation, $20 million of the $35 million of the proposed IDA credits has a maturity of 20 years instead of 35 years. No interest is payable on IDA credits; only a 0.75 percent service charge applies.