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PRESS RELEASE

FYR Macedonia Country Partnership Strategy Progress Report helps the country in the midst of Eurozone crisis

November 29, 2012

WASHINGTON, November 29, 2012 – The World Bank’s Executive Directors today discussed the Country Partnership Strategy Progress Report (CPSPR) for FYR Macedonia.

This Progress Report assesses the implementation of the 2011-14 joint World Bank-International Finance Corporation (IFC) Country Partnership Strategy (CPS) for FYR Macedonia, which focuses on three pillars: (i) faster growth by improving competitiveness; (ii) more inclusive growth by strengthening employability and social protection, and continued improvement of social programs; and (iii) more sustainable resource use and an analysis of options for “greener” economic growth.

The CPS was prepared in the wake of the global economic crisis and at the onset of deepening Eurozone instability. The strategy was developed to be flexible, and the subsequent support reflects this agility. Over the course of 2011 and 2012, the World Bank prepared the first Policy Based Guarantee (PBG) of US$140 million, which leveraged close to US$200 million from commercial lenders. This financing was critical in helping cover financing needs during difficult times.  Moreover, the Bank in late 2011 increased available financing to FYR Macedonia explicitly to respond to the crisis, including US$50 million to build on a successful municipal development project to support small infrastructure projects and preserve jobs, a Public Expenditure Policy Based Guarantee of US$200 million, and doubling the amount of the planned second competitiveness Development Policy Loan (DPL) to US$50 million.

“The Government has achieved significant progress toward achieving the outcomes of the Partnership Strategy,” said Lilia Burunciuc, World Bank Country Manager for FYR Macedonia. “The ongoing investment projects are delivering results: more than 560 km of regional and local roads have been rehabilitated under the ongoing Regional and Local Roads project; the real estate cadastre coverage reached 99 percent of the country with the help of the cadastre project and has contributed to tripling the number of registered mortgages. The backlog of court cases has been reduced in 22 out of 27 courts with the help of the judiciary project. The transition rate from primary to secondary school increased from 85 percent to 95 percent, and dropout rates decreased to 1.9 percent from 2.1 percent thanks to the Bank-supported interventions in education. We are hoping to continue in the same way.”

Going forward, the Bank will continue to be flexible and adjust to changing economic and political realities, aiming at strengthening the country’s competitiveness. A selective program of investment lending will focus on those sectors with the maximum possible impact – energy, infrastructure, skills and innovation – and will continue addressing the country’s knowledge and capacity-building needs. The World Bank will continue to assist the EU accession process, and virtually all World Bank-financed operations have been designed to help with the EU membership.

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PRESS RELEASE NO:
2013/174/ECA