USIA - Text: Former Yugoslav Republic of Macedonia World Bank Loan, 97-05-06

United States Information Agency: Selected Articles Directory - Previous Article - Next Article

From: The United States Information Agency (USIA) Gopher at <gopher://gopher.usia.gov>

TEXT: FORMER YUGOSLAV REPUBLIC OF MACEDONIA WORLD BANK LOAN

(To support economic reform program) (690)

Following is the World Bank announcement.

(Begin text)

WORLD BANK AND IDA SUPPORT ECONOMIC REFORMS IN FORMER YUGOSLAV REPUBLIC OF MACEDONIA

WASHINGTON, May 6, 1997 -- The World Bank today approved a $30 million loan and a $30 million IDA (International Development Association) credit to the former Yugoslav Republic (FYR) of Macedonia in support of the government's economic reform program. The lending will help catalyze economic growth by promoting policy reforms in the trade and agricultural sectors and fostering private sector development.

Implementation of the country's trade and agricultural policies will alleviate the significant financial burden which current policies impose on the country's consumers and taxpayers. The Bank-assisted policy reforms will also help to integrate the country's economy into regional and world markets.

Since 1994, the government has pursued a vigorous economic reform program in its transition to a market economy. Despite successful economic stabilization, significant economic distortions in the trade and agricultural sectors continue to constrain the efficiency of the private sector, thereby undermining overall economic recovery. The Bank's loan and the IDA credit will help FYR Macedonia to move forward in promoting economic growth and reducing unemployment.

The government's economic reform priorities are to:

• Liberalize trade policy further;
• Reform agricultural policy;
• Privatize socially-owned enterprises in agriculture; and
• Complete the process of privatizing socially-owned industrial and commercial enterprises.

• Consolidate the government's recent reforms involving price liberalization and bank privatization;
• Complete the divestiture of socially owned industrial enterprises; and
• Advance trade and agricultural policy reforms and extend privatization to the agricultural sector.

Since joining the World Bank and IDA in 1993, FYR Macedonia has received approximately $300 million in Bank/IDA commitments for eight projects.

Economic Transformation Background

In 1994, the government implemented strict budgetary discipline and conducted strong incomes and monetary policies to turn the economy back from the brink of hyperinflation. Trade policy reform has removed quantitative restrictions and is helping to rationalize and lower the system of multiple import taxation and exemptions, strengthen export incentives, and consolidate trade policy functions. Agricultural policy reform aims to phase out budget subsidies for seed and credit, eliminate government financed price premia and guaranteed prices for selected commodities.

In April 1996, Parliament passed the Agricultural Privatization Law to assist in privatizing socially-owned enterprises in agriculture. By end- 1997, privatization measures will be undertaken for at least 70 percent of the eligible enterprises in agriculture. Completing the mainstream privatization program is another high priority. Approximately 800 enterprises from a total of 1,217 were privatized or liquidation proceedings were initiated with the help of the Bank's Financial Sector Adjustment Credit of $85 million approved in May 1995. By mid-1997, it is expected that 1,150 enterprises will have completed privatization proceedings.

(End text)

From the United States Information Agency (USIA) Gopher at gopher://gopher.usia.gov

United States Information Agency: Selected Articles Directory - Previous Article - Next Article