BELGRADE, May 16, 2016 — Minister of Finance Dušan Vujović and World Bank Country Manager Tony Verheijen signed today a EUR 69 million (US$75 million equivalent) results based loan to support Serbia in improving efficiency in public sector employment and finances. The approval of the Program for Results on Modernization and Optimization of Public Administration demonstrates the Bank’s strong commitment to support ongoing reforms in Serbia’s public sector.
The Government of Serbia embarked on an ambitious administrative reform effort with the launch in 2014 of the Public Administration Reform Strategy and the Action Plan for its implementation. The Government has also begun to address longer term structural problems in the administration of the public sector, focusing on improved management of public sector employment and institutional restructuring. Apart from reducing the fiscal cost of the public sector, the PAR strategy will also create the conditions for improved service delivery in the social sectors.
“Along with improving business climate and restructuring of public companies, reforms in the public sector should clear the field for faster private sector development and new job creation, as well as ensure Serbia’s readiness for EU accession” said Tony Verheijen, World Bank Country Manager for Serbia. “This program supports the establishment of a merit based public service system and an efficient public administration. It will contribute to better use of scarce fiscal resources in order to create space for investments in important infrastructure.”
The Program for Results on Modernization and Optimization of Public Administration will provide support to improvements in the areas of human resource management; financial management; and procurement management.
“This Program for Results is derived from the Government’s own program for public administration reform,” says Raymond Muhula, World Bank Senior Public Sector Development Specialist and Task Team Leader. “It demonstrates the commitment of the Government of Serbia to pursue difficult, yet critical reforms in improving efficiency in the public administration, and builds on the strong momentum and broad support of Serbia’s development partners.”
One unique feature of this engagement is that, for the first time, the World Bank and the EU are jointly financing a single government program, aligning EU Sector Budget Support and World Bank result-based financing. This is also the first loan the World Bank is providing in the Western Balkans using the Program for Results instrument, which provides direct financial support to country programs and relies for its implementation on country public financial management systems.