WB GROUP COMMITMENTS IN ECA GREW IN FISCAL YEAR 2009 BY 58%
/PanARMENIAN.Net/
30.07.2009 13:50 GMT+04:00
/PanARMENIAN.Net/ During Fiscal Year 2009, a period marked by the
sudden onset of the global financial crisis, the World Bank Group
committed US$12.5 billion in support to its members and to private
business in the Europe and Central Asia (ECA) Region. The World Bank
Group commitments in ECA grew in fiscal year 2009 by 58 percent,
as financing was rapidly approved to help cushion the impact of the
global economic crisis on the poor and to position countries for
post-crisis recovery.
Many countries in Europe and Central Asia entered the crisis in
a vulnerable position. Relatively high current account deficits,
elevated external debt levels, very rapid credit growth, and a
consumption boom financed by foreign currency borrowing created
vulnerabilities in Central and Eastern Europe (CEE), the Baltics,
and some Commonwealth of Independent States (CIS), leaving several
of them particularly exposed to the crisis. On the other hand, sharp
drops in commodity prices brought growth in economic powerhouses of
the eastern part of the Region (Russia and Kazakhstan) to an abrupt
halt and hit the less well-off parts of the CIS very hard.
The World Bank Group consists of the International Bank for
Reconstruction and Development (IBRD), which provides financing,
risk management products, and other financial services to members
as well as analytical services, capacity building and technical
services; the International Development Association (IDA), which
provides interest-free loans and grants to the poorest countries;
the International Finance Corporation (IFC), which makes equity
investments and provides loans, guarantees and advisory services to
private-sector business in developing countries; and the Bank Group’s
political risk insurance agency, the Multilateral Investment Guarantee
Investment Agency (MIGA).
The IBRD/IDA recipients are using these funds for 53 projects
across all sectors, designed to overcome challenges of the crisis
and be better positioned for the post-crisis period by focusing on
productivity and innovation in the enterprise sector; establishing
a healthy business/investment climate; creating a qualified and
skilled workforce, through projects targeting health and education;
improving public administration; creating legal and judicial systems;
and implementing economic infrastructure programs, particularly
transboundary programs. IDA commitments in ECA were US$383 million,
and IBRD commitments totaled US$8.9 billion in fiscal 2009, more than
doubling the $4.2 billion of FY08. The top borrowers in ECA in FY09 by
volume were Poland (US$2,550 million); Kazakhstan (US$2,125 million);
and Turkey (US$2,075 million).
In a rapidly changing economic landscape, the World Bank continues
to be a vital development partner and responded to strong demand for
economic support across the poorest countries. To help create jobs,
the Bank financed labor-intensive infrastructure projects across
the Region, including a package of three projects for Armenia in the
amount of US$35 million designed under the Fast-Track Facility as an
immediate response to the global economic crisis, US$20 million to help
Tajikistan protect social spending and continue its development agenda
despite a shrinking budget, US$11 million to increase power and heat
generation in Kyrgyz power plants, and US$10 million to continue to
foster post-privatization growth in Moldova’s agricultural and rural
sectors. Immediately following the August 2008 conflict in the South
Caucasus, the Bank and the United Nations led a group of donors in
preparing a Joint Needs Assessment for Georgia that examined financing
needs for post-conflict recovery and reconstruction. The Bank and
the European Commission subsequently chaired a donor conference for
Georgia in October 2008 that raised $4.5 billion in assistance over
three years.
In middle-income countries, the Bank continued to provide a broad
range of product lines addressing the diverse needs of this group in
ECA. Among these were the US$800 million to support implementation of
Turkey’s updated national electricity strategy and its ongoing program
to reform the electricity sector, US$2.125 billion in Kazakhstan to
help upgrade a 1,062 km stretch of the international trade corridor
linking China to Russia and Western Europe, US$1.250 billion to
support reforms in public finance management in Poland, US$400 million
to improve the condition and quality of roads and increase traffic
safety along Ukraine’s main road network, US$200 million to enhance
social protection in Bulgaria, and USD$122.5 million to improve the
competitiveness of Croatia’s Rijeka port as a Pan-European transport
route. The Bank also supported a US$78 million Partial Risk Guarantee
for the privatization of Albania’s Energy Distribution System Operator.
The Bank also played a crucial role in stabilizing the financial
sector by providing budget support for reforms in almost half the
Region’s countries, conducting diagnostic work on the banking sector,
and helping client countries restructure and recapitalize their banking
sector. In a joint initiative, the European Bank for Reconstruction
and Development (EBRD), the European Investment Bank (EIB), and the
World Bank Group pledged to provide up to $31 billion to support the
banking sectors in the region and to fund assistance to businesses
hit by the global economic crisis. Support included equity and debt
finance, credit lines, and political risk insurance.
From: Emil Lazarian | Ararat NewsPress