World Bank Vice President for Europe and Central Asia Makes First Visit to Romania

January 13, 2010

2011 will shift the focus on post-crisis assistance

Bucharest, January 13, 2010 - Mr. Philippe Le Houérou, World Bank Vice President for Europe and Central Asia, ended his January 9-12 visit to Romania. The aim of the visit was to discuss the recent economic and social developments with the country’s leadership – the President, Prime Minister and senior government officials – as well as development partners, business community, and representatives of the entire political spectrum. The main themes of the visit were the return to growth, cooperation for better absorption of European funds, the structural reforms, and the role of the Bank in the medium-term in Romania.

“After fire fighting the global financial and economic crisis over the last two years, Romania together with the Bank can now focus on the medium-term, and on sustainable and inclusive growth," said Philippe Le Houérou. “2011 will shift the focus on post-crisis assistance.”

During his visit, Philippe Le Houérou met the President of Romania Traian Băsescu. Meeting at Cotroceni Palace, the two officials touched base on the upcoming midterm update of the Country Partnership Strategy (CPS) for Romania 2009 - 2013 in order to identify the key challenges for the Government and, respectively, the Bank’s response, based on Romania’s priorities in the context of the agreements with the other international financial organizations: the European Commission and the International Monetary Fund. The two officials mentioned the importance of increasing competitiveness, the reforms needed to realize Romania’s agricultural potential, the restructuring of the state-owned enterprises, the public administration reform, health system and the social assistance, and increasing the absorption of EU funds.

In the meeting with Prime Minister Emil Boc, the World Bank delegation discussed with the Government of Romania the current state of the country's economy and prospects for deepening cooperation, with a focus on the medium-term and tailoring the Bank’s instruments for needs in the post-economic crisis situation. Le Houérou congratulated the Government on their determination to implement difficult, but needed reforms. The World Bank Vice President for Europe and Central Asia offered the Bank’s assistance and expertise for the future implementation of the recommendations included in the Functional Reviews of Romanian public administration, and paid close attention to the presentations delivered by the Ministers of Agriculture, Finance, Education and Transport, on the priorities and action plans for the restructuring of ministries.

“Ministers of Finance in the region have had a very tough job since the crisis. The Bank is ready to help Romania in any way the Government sees fit in order to make sure the economy starts growing again,” said Le Houérou. “I agree that the process of reforming the public administration can take time. However, the need to modernize the state and policy making is necessary to ensure a return to sustainable growth. The Government will have the difficult task of managing the reform itself, communicating it, and balancing expectations. At the core of this, collecting revenues is essential. And we must not forget to make it easy for the taxpayers to pay their taxes.”

“Romania has the eighth largest portfolio of the 22 countries in the World Bank region of Europe," said Philippe Le Houérou, “and The World Bank will continue supporting programs to stimulate growth, and support the poor and the vulnerable.”

Le Houérou visited one project site – the Payments and Intervention Agency for Agriculture (APIA) in Bucharest – which received support within the Modernizing Agricultural Knowledge and Information Systems (MAKIS) project financed by the World Bank. The Vice President for Europe and Central Asia was received by Valeriu Tabără, the Minister of Agriculture and Rural Development, and the two officials had a lengthy exchange on the strategy and challenges in this sector. The Bank’s support to APIA worth EUR 1.5 million is helping Romania with the procurement and use of GPS devices to map farmers’ fields that are eligible for European subsidies. The project team gave a practical demonstration of the GPS, and a detailed explanation of the process of mapping and verification, and the adjacent database of aerial views and maps.

“I was impressed by the hospitality of the people of Romania, as well as by the professionalism of the Bank’s counterparts. And I hope to learn more about the richness of the country's culture and history, while I am looking forward to my future visits to Romania,” said Le Houérou. “The World Bank is honored to be a partner in Romania's development and to help create a better and more prosperous future for the Romanian people,” emphasized Le Houérou.

Le Houérou’s visit is seen by the World Bank as an important step in enhancing and extending the cooperative relationship between Romania and the World Bank. “I left Romania encouraged by the country's reform achievements in difficult times, hopeful that we can work productively together with Romania and the European Commission to help Romania build a more coherent vision and get on a more solid path to competitiveness and growth in the medium- and long-term, and with the expectation that the World Bank will need to stay engaged in supporting this transition,” said Le Houérou upon the conclusion of his first visit to Romania.

The World Bank is currently launching a midterm update of the Romania CPS for 2009 - 2013, where the outer fiscal years 2011 to 2013 were left to be defined. The World Bank will now drill down with the Government of Romania to see what are the best instruments, timing, sequencing, and where the best IBRD and IFC expertise can be mobilized to support the Government.

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