WASHINGTON, September 16, 2015 — The World Bank’s Board of Executive Directors today approved a Euro 89.5 million (US$100 million equivalent) results-based loan to support Serbia in raising the competitiveness of its economy and creating new jobs. The approval of the Competiveness and Jobs Project comes one day after Serbian Prime Minister Aleksandar Vučić met with World Bank Group President Jim Yong Kim at the multilateral’s headquarters in Washington.
Serbia has faced a slow economic recovery since the global economic crisis in 2008. With a renewed commitment to structural reforms, the country has begun to turn the corner in 2015, with positive growth, increasing exports and rising employment since the year began. But even as Serbia pursues deeper structural reform of state owned enterprises and the public administration, more needs to be done to make the private sector a strong driver of economic recovery.
“Creating jobs for young workers is the highest priority for Serbia,” says Cyril Muller, World Bank Vice President for Europe and Central Asia. “The Prime Minister highlighted this in our meeting yesterday, and we are responding with a project that addresses his concern by strengthening investment promotion, spurring innovation and helping young Serbians connect to future employers."
The Competitiveness and Jobs Project will provide support to three areas: creating a more attractive investment climate, promoting innovation and entrepreneurship, and offering employment services to connect workers to jobs. At a time of fiscal consolidation, it will focus on generating better public services for investors and those seeking work by enhancing the impact of public expenditures.
“The project will help provide better support for investment and growth of exports for small and medium enterprises,” says Duško Vasiljević, World Bank Private Sector Development Specialist. “It will also support innovative companies, which typically employ young and well educated people. The aim is also to improve the services offered to the unemployed, so that they can find jobs faster and easier.”
The lending instrument is Investment Project Financing, using a results-based lending design with disbursement-linked indicators and a small technical assistance component aimed at providing expert support in achieving loan objectives. Results-based lending was chosen in order to support achievement of results within a multi-year reform program, combined with the ability to reimburse existing Government expenditures in an environment of fiscal consolidation.