The World Bank began supporting Serbia in 2001 as part of the Federal Republic of Yugoslavia, and since 2006 as an independent country. From 2001 to date, the World Bank has financed 39 projects with almost $2 billion.
The Bank’s knowledge and financial support has played a critical role in reforming Serbia’s banking, education, energy, public finance and social sectors. It was instrumental in the privatization of a number of state and socially owned companies. It also assisted in the modernization of border crossings, reform of the judiciary, road rehabilitation, improving environment, health and employment services, and helped Serbia develop a more effective business environment.
The World Bank is supporting Serbia in its progress toward full European integration and the promotion of dynamic economic growth through the accelerated implementation of economic reforms, increasing employment and living standards, and balanced regional development.
The Bank’s current portfolio consists of three active investment loans with a total commitment value of $508.9 million. Highlights of the Bank’s portfolio include:
Corridor X Highway Project
Serbia’s geographic position puts it at the crossroads of the two important Pan-European transport infrastructure networks. One is connecting Budapest with the Bulgarian capital Sofia; the other links Greece to the north. This network is known as Corridor X, and currently not all sections in Serbia are of Motorway Standard. To improve this corridor, the Government asked the World Bank to act as a lead partner and make a contribution of $388 million, the largest ever World Bank loan to Serbia.
Serbia Health Additional Financing Project
Improving efficiency remains the main challenge facing Serbia's health sector. As in other European countries, changing the way healthcare providers are paid is crucial. A $13.5 million loan from the World Bank has allowed communications and technology equipment to be updated in 20 hospitals around Serbia. Moving to a Diagnosis Related Groups (DRG) system has enabled more efficient financing of public health care providers, and ensures quality and access to public health care services. The Ministry of Health, Health Insurance Fund and other key national partners have initiated the implementation of reforms to move toward payment systems that reward productivity and quality, ultimately leading to more efficient public spending.
In February 2014 the Board of World Bank Directors approved a new loan of $40 million for the Second Serbia Health Project,aimed at supporting the improvement of health care financing and efficient purchasing of pharmaceuticals and medical products
Reports from Serbian hospitals are promising, showing that a reduced number of hospital beds achieve higher occupancy rates and a shorter average length of stay.
Deposit Insurance Strengthening Project
The Deposit Insurance Strengthening Project aims to strengthen the financial and institutional capacity of the Deposit Insurance Agency (DIA), to ensure that the Deposit Insurance Fund has the resources to meet its legally mandated deposit insurance and bank resolution functions. The Deposit Insurance Fund covers depositors in Serbia of up to 50,000 Euros in the case of a bank failure. The depletion of the Deposit Insurance Fund due to several recent bank failures has created risks to the Serbian financial system - due to the possibility of it not having adequate resources to cover insured depositors.
Ensuring confidence and continuing to develop the financial sector in Serbia is a critical part of the agenda of ensuring shared prosperity in Serbia. Access to credit remains a major issue in Serbia, as credit growth continues to be much lower now than prior to the 2008 global financial crisis. Research has shown that increasing confidence in a financial system can lead to an increase in the amount of domestic savings that can be mobilized for more productive uses, which, in turn, can lead to increased growth and job creation.
Significant support is also provided to strengthen the institutional and technical capacity of the Deposit Insurance Agency.