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PRESS RELEASE

World Bank Vice President for Europe and Central Asia Pledges Full Support for Flood Recovery in Serbia

June 2, 2014

BELGRADE, June 2, 2014 – World Bank Vice President for Europe and Central Asia Laura Tuck visited Belgrade on June 1-2 to see firsthand the impact of recent floods and to offer World Bank support to the country for recovery and reconstruction. Ellen Goldstein, Country Director for South East Europe, accompanied the Vice President.

Tuck began her visit on Sunday with a tour of Obrenovac. Together with Deputy Prime Minister Zorana Mihajlović, she saw families clearing sodden belongings from their destroyed homes, as flood and sewerage water slowly receded in the severely-affected town. 

Let me express our deepest sympathy to the Serbian people for the loss of life and property in these devastating floods,” said Laura Tuck, World Bank Vice President for Europe and Central Asia.  “The World Bank is prepared to fully support your flood recovery with a variety of flexible instruments which allow fast mobilization of resources to meet critical needs.”  

The World Bank Group has already mobilized grant funding and put technical teams for power and transport sectors on the ground over the past week to support detailed damage and loss assessments.  The World Bank is collaborating with the EU, UN, and other partners to support assessments that will launch the recovery and reconstruction phase as initial relief efforts wind down. Already, the World Bank has authorized emergency procedures for Serbia and begun reallocating some funds from within its existing undisbursed portfolio to meet flood recovery needs, beginning with the US$100 million Road Rehabilitation and Safety Project

“Up to 40 percent of reallocated funds can retroactively finance critical expenditures, allowing Government to start spending now to provide for immediate road repair and other reconstruction needs,” said Tuck. “The World Bank could also prepare an Emergency Recovery Loan to finance critical expenditures such as electricity imports if needed to supplement grant and budget resources made available for recovery.”

Tuck was struck by the resilience of households, and the solidarity demonstrated during relief efforts of the past two weeks. Solidarity will be equally needed through a challenging recovery phase, with Government playing an indispensable role in creating an environment that will maximize growth and job creation as flood recovery moves forward.  

“During this difficult time, Serbia must find a new path to prosperity,” said Tuck. “Rapid recovery will require courageous reforms to ensure that every dinar of public money is spent on rebuilding critical Serbian infrastructure, promoting investment, creating jobs, and providing an effective social safety net for the poor and vulnerable. Of particular importance will be improving the investment climate, promoting private sector entrepreneurship and innovation, completing restructuring of state-owned enterprises, and reforming the public administration so that citizens get better delivery of vital services.”

During her visit, Tuck met with the Serbian Prime Minister Aleksandar Vučić, Deputy Prime Ministers Kori Udovički and Zorana Mihajlović, Minister of Finance Lazar Krstić, Minister of Economy Dušan Vujović, Minister of Education Srđan Verbić, and Minister of Health Zlatibor Lončar.   During these meetings, Serbian authorities expressed gratitude for the Bank’s support on flood recovery, and confirmed their commitment to structural reforms aimed at accelerating growth and creating jobs in the medium-term.

“High unemployment, currently at about 20 percent – and as high as 49 percent among the youth – is a particular cause for concern,” emphasized Tuck. “Structural reforms, coupled with changes leading to a more friendly business environment, should help boost private sector development and create jobs in Serbia, even as the country pulls itself up from the flood damages.”

In addition, Tuck visited the Innovation Fund (IF) of Serbia where she met a group of innovative entrepreneurs, who used IF grants to develop new business ideas. At the Republic Institute for Health Insurance (HIF), she commended Momčilo Babić, Director of HIF, on the successful initial implementation of the centralized procurement of drugs, and encouraged HIF to continue with the reforms in the health sector.

“The Bank will continue to support the Government of Serbia, and I am glad to note the high level of political commitment to our engagement,” said Tuck. “We want to ensure that Serbia’s growth benefits the whole of society, particularly those most in need.”

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PRESS RELEASE NO:
2014/547/ECA