world bank kosovo the world bank in kosovo world bank kosovo our work
TRANSCRIPT
World
Bank
Kosovo
The World Bank in Kosovo
World
Bank
Kosovo
Our Work
KEY FACTS TO REMEMBER
Kosovo is small:
1/3 the size of Belgium (10.887 km)
Kosovo is multiethnic:
~2 million people
Albanian
Serb
Other Minorities
Kosovo is the poorest region of Europe:
GDP p.c. US$ 1,227
37% below poverty line
15% in extreme poverty
In Kosovo the international community has put 25 times more money and 50 times more troops per capita than in Afghanistan.
In Kosovo the international community has put 25 times more money and 50 times more troops per capita than in Afghanistan.
INSTITUTIONAL PROGRESS HAS BEEN MADE…
June 1999Resolution 1244
establishes UNMIK
November 2001PISG formed after first
election
October 2004Second elections as
transfer of power proceeds
2005-2006Standards reviewed status negotiations
begin
United Nations Mission in Kosovo divided into four pillars:
Pillar I Police and Justice, under the UN’s direct leadershipPillar II Civil Administration, under the UN’s direct leadership
Pillar III Democratization and Institution Building, led by the Organization for Security and Co-operation in Europe (OSCE)Pillar IV Reconstruction and Economic Development, led by the European Union (EU)
Provisional Institution of Self-Government consisting of:
President, Assembly and the Government of Kosovo
Transfers of authority slowly begin
Today PISG’s responsibilities include:
Economic policy
Trade, labor and social welfare
Transport
Agriculture and rural development
Human rights and equal opportunities
Energy and mining
But UNMIK retains final legal authority & certain powers including:
Security, law & order
Foreign relations
Minority rights protection
Banking & customs
Privatization management
Standards:
Functioning democratic institutions
Establishment of the rule of law
Freedom of movement of all people
Sustainable return of displaced people
Respect for rights of all communities
Competitive market economy
Fair enforcement of property rights
Constructive & continuing dialogue with Belgrade on technical issues
Kosovo Protection Corps remain within mandate.
ECONOMIC OUTLOOK IS MIXED
Main Indicators 2001-2006
Key facts on economic outlook
Large informal economy
World Bank estimates unemployment at ~35%
Large trade deficit of 34%
Considerable economic strengths:
Liberal trade regime
Simple labour market regulation
Stable exchange rate & monetary policy due to use of Euro
Privatization
Delayed due to unresolved status & poor infrastructure
Picked up since July 04 with 8 waves of international tenders resulting in proceeds of €140 million
One of the largest global recipients of remittances: 7-12% of GDP
Economic reformEconomic reform
Supporting private sector
Supporting private sector
Restarting agricultureRestarting agriculturePoverty alleviation
Poverty alleviation
Financing small infrastructureinvestments
Financing small infrastructureinvestments
EducationEducation
Social services&
health
Social services&
health
WHAT HAS THE BANK DONE?
Assistance focus
Institutionbuilding
Institutionbuilding
THE BANK’S ROLE IN ECONOMIC REFORMS & INSTITUTION BUILDING I
Budget support grant
To support the restart of education & health services through financing employment of teachers & health workers
US$1.0 m Helped prompt restart of health services Kick-start of budget preparation process
Economic assistance grant I
Creation of fully functioning & effective:
Budget management system Bank licensing and supervision capability
US$5.0 m
The new Central Fiscal Authority: Budget preparation & monitoring Execution of budgetary transactions & their financial control Tax policy formulation & management of tax and customs revenuesThe new Banking & Payments authority: Legislation for bank licensing & regulation Supervision followed
Economic assistance grant II
Support: Formulation of sustainable 2001 budget increasingly financed by local taxation Establishment of a liberal trade & customs regime
US$5.0 m
A basic tax system relying on border tax collection introduced Donor funding share in total revenues decreased from 48% in 00 to 28% in 01 Liberal trade & customs regime maintained. Yet, full tariffs elimination difficult due to revenue considerations.
Objective Budget Achievements
THE BANK’S ROLE IN ECONOMIC REFORMS & INSTITUTION BUILDING II
Economic assistance grant III
Support private sector development through 1st package of commercial regulation introduction
US$5.0 m
Regulations drafted: On contract and sale of goods On foreign investment On pledges On Business organization
Economic assistance grant IV
Assist implementation of structural reforms to: Enhance medium term fiscal sustainability Sustain adequate public service delivery Promote private sector driven growth
US$5.0 m
04-06 Macro & revenue framework agreed by SRSG and used in 04 budget. SRSG established Audit office & recruited Auditor-general Review of pay, employment, civil service structure completed Roll-out to Treasure system of municipalities has begun Public procurement law passed Private Sector Advisory Group established & business registry is operational
Objective Budget Achievements
THE BANK’S ROLE IN BROAD BASED GROWTH, JOB-CREATION & INCOME GENERATION I
Pilot line of credit for SMEs
Jump-starting of production through a line of credit for SME Capacity building in the financial sector
US$5.0 m(EAR co-financing
US$5.0 m)
Interim Credit Union disbursed more than 60 loans ~1200 new jobs created in various sectors New banks developed basic credit management capacity & loan administration through training A successful exist strategy for IDA funded credit line, gaining proceeds of 77% of total funds for the Kosovo budget.
Private sector development TA
Establishment & operation of a business registry Strengthen commercial & supreme courts’ capacity to improve legal services quality Development of basic accounting standards, accounting training and establishment of accountants’ association
US$3.0 m
Re-registration of business in strongly underway Complete database constantly updated and made available to fiscal administration Over 1000 person received accounting training Society of Certified Accountants and Auditors of Kosovo joined International Federation All commercial & supreme Judges received training on Property Registration, Bankruptcy, Business Organization law.
Objective Budget Achievements
THE BANK’S ROLE IN BROAD BASED GROWTH, JOB-CREATION & INCOME GENERATION II
Energy sector TA I
Preparing a comprehensive study for long term energy demand and supply to analyze available energy options & asses physical investment needs
US$2.5 m
Drafts of all 13 modules have been prepared KEK closely associated with consultants’ work, and its staff received hand-on training
Energy sector TA II
Develop capacity for a commercially sustainable exchange of power with regional system & optimizing utilization of generation capacity though economic dispatch Develop framework for attracting private sector investment in the energy sector
US$1.5 m
Feasibility study for a 400 kV transmission inter-connection between Albania and Kosovo. Feasibility study for establishing energy dispatch center. Developing framework for attracting private sector investments.
Objective Budget Achievements
THE BANK’S ROLE IN IMPROVING SERVICE DELIVERY I
Education and health project
Energy sector TA II
Rebuild and structure the governance, finance and administration of Kosovo's health and education systems
US$4.4 m
Education component Education funding system based on per student funding formula, devolution of ear-marked block grants on a municipal level Formulation of new Higher Education Law and the new university statute Adequate capacities for setting and monitoring education standards & adequate dissemination of results Formulation of new General Education law & specific instructions from the Ministry
Health component Interim financing strategy Model for planning & securing funds Implementation of co-payment system Public financing prioritization Cost effective allocation resource allocation & provider payment mechanisms Development of organization governance structures Public info & communication Options for private financing & provision Health & finance info strategy
Objective Budget Achievements
THE BANK’S ROLE IN IMPROVING SERVICE DELIVERY II
Social protection
Design of basic safety net for short-term Design of sustainable social welfare system for medium term Adequate admin capacity for pensions delivery, veterans’ & invalidity benefits
US$4.2 m(UK co-
financing US$ 2.57 m)
Transfer of responsibilities from UNMIK to Ministry All major contracts signed TA to assist Ministry with institutional capacity, policy & training for social workers 16 centers for Social Welfare renovated, all centers equipped, mobile teams set up IT monitoring system for social assistance provision established Design of new pensions system for Kosovo based on citizen’s pension and advance funded scheme
Education
Improve educational attainment at primary and secondary education levels & enhance access of vulnerable groups to education
US$4.6 m
Dropout, survival, attendance rates improve in targeted groups Schools enabled to plan, manage and monitor school based initiatives. Capacity for Municipalities and Ministry to monitor access to education.
Objective Budget Achievements
THE BANK’S ROLE IN IMPROVING SELECTED INFRASTRUCTURE I
Community development fund
Small scale infrastructure & social services projects in communities with high incidence of conflict-related damage & poverty Institutional capacity building at community & municipal level to improve sustainability of projects and strengthen civic participation
US$5.0 m(NL co-
financing US$ 6.0 m & CH US$1.2
m)
Targeted poor communities in all regions with over 200 community works including road reconstruction, cultural centers, water supply, school rehabilitation In cash and in form of labor contributions from communities significant Hundreds of community meetings organized with increased membership Capacity building focused on training project committee members in preparing project proposals, business plans & contractors in supervising activities
Pilot water supply project
Financing urgent infrastructure needs Demonstrating viability of private sector participation in water supply provision Developing integrated water resources management model
US$4.6 m
Improvements in water service quality, technical, commercial, and financial company management Private operator surpassed all targets in collection ratio, customers metered & billed Radoniqi water company creates sustainability of water services quality and financial operational efficiency Eliminated need for continued budget financing to water company and demonstrated that improvements possible through private participation
Objective Budget Achievements
THE BANK’S ROLE IN IMPROVING SELECTED INFRASTRUCTURE II
Emergency farm reconstruction project
Investing in key farm assets (distribution of cattle & farm mechanization) Providing key agricultural services Building institutional capacity for effective policy making
US$14.7 m(NL co-
financing US$ 1.8 m, IT US$1.4 m & SE $1.0 m
)
4.400 pregnant heifers & 92 bulls distributed increasing milk production & family income by $90 More than 2.400 tractors repaired & 202 new tractors distributed serving 6.000 beneficiaries Equipment, drugs & training provided to 106 veterinarians. Cost recovery mechanism amounts to 10.000 free visits Capacity building in Ministry of Agriculture, strong participation & training of local stuff. Drafting of Green book of long run strategy
Urgent road project
Re-establishment of road management capacity Emergency road maintenance activities on main network Restoration of local contracting capacity for road/bridge rehabilitation & maintenance
US$5.0 m(EAR co-financing
US$ 28.0 m, DE $7.2 m, NL $7.0 m, Fr $ 0.9 m)
Road Infrastructure Division and Directorate of Roads re-established along with staff training and new strategy for the later 570 km of road maintenance 7 2 bridges Several contracts awarded to local contractors and were successfully implemented Efficient coordination amongst donors Progress made, but sustainability an issue and donors phase out support
Objective Budget Achievements
TODAY THE BANK FOCUSES ON THREE PROJECTS
Energy sector TA III
Implementation of Athens memorandum obligations such as establishment of an independent Transmissions and System Operator, development of Grid Code, transmission & retail tariffs including subsidy mechanism and institutional strengthening Develop of policy framework, guidelines & institutional capacity for utilization of mineral resources
US$2.5 mn/a
Business environment TA
Business services integration to reduce regulatory uncertainty, admin barriers, improve transparency & facilitate investment Immovable property rights enhancement to facilitate land market development and business start ups
US$ 7.0 m n/a
Public Expenditure Management TA
Improve ability to use public funds more effectively, efficiently & transparently through budget formulation, execution & procurement and focus on high spending ministries
US$6.1 mn/a
Objective Budget Achievements