WASHINGTON, June 27, 2013 – The World Bank Group’s* Board of Executive Directors today discussed a new Country Partnership Strategy (CPS) for Croatia, covering the period of July 2013-June 2017. The CPS is a key document that sets out the framework of cooperation between the World Bank Group and the Government of Croatia, and describes the Bank Group’s planned program in the country.
“The new Strategy was designed to commence with Croatia’s membership in the European Union (EU) and, as such, will focus on assisting Croatia in maximizing the economic benefits of membership and speeding up Croatia’s convergence with the EU,” said World Bank Regional Director for Central Europe and the Baltic Countries Mamta Murthi."In line with Croatia’s new status, the nature of the Bank’s assistance will gradually change, moving away from funding specific projects, as these are expected to be funded through EU funds, and focusing more on providing technical assistance to the country’s institutions in order to better absorb EU funds and implement reforms needed to turn the economy around.”
The Strategy prioritizes aspects of the Europe 2020 ‘smart, sustainable, and inclusive growth’ strategy and the Government’s new reform agenda that focuses on the fundamentals of economic management, state institutions, the business environment, and responsibility toward shared regional resources. This is coupled with supporting Croatia in making good use of large amounts of EU grants that will come with membership.
In line with Croatia’s priorities, over the next four years the World Bank Group’s support will concentrate on three thematic areas:
- Public Finance – supporting fiscal consolidation to speed up sustained growth, with an emphasis on expenditure rationalization to ensure fiscal sustainability over the medium-term.
- Competitiveness – improving Croatia’s competitiveness, centering on the needed structural, institutional, and governance reforms, so that Croatia can catch up with its EU peers.
- EU Membership – helping Croatia maximize the economic benefits of becoming an EU member state by increasing the country’s capacity to implement harmonized policies, to absorb the large increase in EU Funds, and help use these resources effectively.
“Private sector development is critical to achieving Croatia’s goals and to supporting stable and sustainable economic development,” said Tomasz Telma, Director for Europe and Central Asia for the International Finance Corporation (IFC). “During the next four years, IFC will continue to significantly increase its program and strengthen its support to the Croatian private sector. Our focus will be on export-oriented companies, investments in energy efficiency and renewable energy projects, and on encouraging the inclusion of the private sector in the development of Croatia’s infrastructure.”
The previous CPS was focused on supporting Croatia’s goal of achieving EU membership. The new CPS has been prepared in close partnership with the Croatian authorities under the leadership of the Ministry of Finance, and in consultation with key stakeholders, including the European Commission, the Delegation of the European Union in Zagreb, members of Parliament, the private sector, think-tanks, academia, the diplomatic community, international organizations, civil society, and media.
Since joining the World Bank in 1993, Croatia received support from the global development institution in the form of financial and technical assistance, policy advice, and analytical services. To date, the Bank has supported 48 projects for an amount of US$3.3 billion, and it has approved 52 grants with a total value of US$70 million. The total active lending portfolio as of June 2013 consists of 11 projects with total commitments of $775 million.
Responding to increased demand for IFC's products and services, IFC has significantly increased its program in Croatia to US$150 million in fiscal year 2013, as compared to US$68 million in fiscal year 2012. IFC's investments in Croatia have financed projects in the financial markets, infrastructure, general manufacturing, tourism, and agribusiness sectors. Across all sectors, IFC prioritizes investment in Croatia’s less-developed regions and in projects that contribute to greater economic diversification and regional integration. Since 1993, IFC invested US$1 billion (including US$300 million mobilized from other partners) in Croatia in 30 projects. As of June 2013, IFC’s active portfolio in Croatia stands at US$192 million, including financing mobilized from other partners.
* The World Bank Group consists of five organizations: the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA), which together comprise the World Bank; the International Finance Corporation (IFC); the Multilateral Investment Guarantee Agency (MIGA); and the International Centre for Settlement of Investment Disputes (ICSID).