WASHINGTON, September 20, 2011 – The World Bank Board of Directors endorsed the Progress Report on the Croatia Country Partnership Strategy. The Progress Report reviews the implementation of the four-year Country Partnership Strategy (CPS) which was launched in September 2008. The CPS was prepared prior to the onset of the global financial crisis when Croatia was in the midst of EU accession negotiations, enjoying a stretch of strong economic growth averaging four percent over five years.
The CPS aims to support Croatia’s efforts to complete the EU accession process and achieve rapid income convergence with EU members in a fiscally, socially and environmentally sustainable manner. The strategy’s flexible nature envisaged lending for investment loans, as well as, Development Policy loans. International Finance Corporation’s (IFC) strategic focus in Croatia was underpinned by its regional priorities of increasing access and quality of infrastructure services; addressing climate change; and enhancing competitiveness, including supporting South-South investments.
‘The lending program was designed to permit a flexible response to events and emerging country needs’, said Hongjoo Hahm, the World Bank’s Country Manager in Croatia. ‘When the global crisis hit, we adapted our program to support the Croatian authorities with two quick-disbursing development policy operations and an export credit line to help mitigate the impact of the crisis, speed up fiscal consolidation and structural reforms and help export oriented companies cope with the economic downturn.’
Due to changing priorities, half of the envisaged investment lending program was delivered to date with increased priority placed on boosting competitiveness and supporting Croatia’s EU agenda. For example, the Bank continued to help with the development of major trading routes in Rijeka and Ploce, and upgrading waste water systems and collection along the Adriatic coast to help Croatia meet EU directives in the water sector.
The Bank’s Analytical and Advisory Activities (AAA) supported the Government’s efforts to respond to the crisis and address selected reforms. The in-country consultations on the 2010 Social Impact of the Crisis and Building Resilience report, prepared jointly with the United Nations Development Program, led to the Bank’s intensive engagement in policy advice. The Bank also delivered a series of policy notes on reforms in labor market, pension reform, and social welfare. The Bank has also provided policy advice on the fiscal responsibility framework, which contributed to recent legislative reforms under the Government’s economic recovery program.
‘Today, Croatia is at the doorsteps of the European Union and upon accession will gain access to substantial amounts of EU Structural and Cohesion funds. Therefore the Bank will support Croatia make the most of its imminent EU membership. More emphasis will be placed on knowledge products related to policy challenges and technical assistance that support Croatia’s EU related responsibilities and create and enabling environment to absorb EU grant funds,’ said Peter Harrold, Country Director for Central Europe and the Baltic Countries.