WASHINGTON, October 25, 2016 — The World Bank’s Board of Executive Directors today approved Euro 124.9 million (US$138.9 million equivalent) for two programs in Serbia. The first one is in the amount of Euro 89.8 million (US$100 million equivalent) and aims to create an environment conducive to better quality jobs by reducing the role of the state in managing commercial enterprises. The second is an investment in the amount of Euro 35 million (US$38.9 million equivalent) which will improve regional connectivity and mobility through construction of the missing links of the Pan-European Corridor X highway.
The Second Programmatic State Owned Enterprises Reform Development Policy Loan (Second SOE DPL) is a continuation of support for reform of commercial state owned enterprises. It reduces state participation in production of goods and services, decreases the level of direct and indirect state support to the real sector and, through this, and creates a better environment for private sector investment. It will also enhance the performance, governance and accountability of state-owned enterprises (SOEs) and mitigate the short term social and labor impacts of the SOE restructuring and disposition plans.
This program supports specific measures in the following areas: (i) accelerating the restructuring and divestiture program for the Privatization Agency portfolio and selected SOEs operating in the commercial sector; (ii) strengthening the governance, regulatory and institutional framework, and monitoring and transparency arrangements for SOEs; and (iii) mitigating the social and labor market impact of the SOEs reform program.
“Thanks to the dialogue and reforms taken forward during the preparation of the Second SOE DPL, the previously high burden that commercial state owned enterprises posed on the economy and on tax payers has been progressively reduced,” said Tony Verheijen, World Bank Country Manager for Serbia. “However, continuing the resolution of commercial state owned enterprises remains a critical factor to the success of government’s economic program and improved economic efficiency. Resolving these issues will release public funds for better purposes, cut losses to the economy, and release productive resources into the private sector to stimulate entrepreneurship, innovation, and job creation for young workers.”
Corridor X Highway Additional Financing Project will help Serbia to fully utilize its geographic position in the heart of the Western Balkans along Pan-European Corridor X highway, Building missing links will bring more transit traffic for Serbia and make contribution to the Serbian economy. In addition, the project will support efforts to make Serbian roads safer through sector reforms, modern equipment and accident database.
The funds will finance improvement of roads network after disastrous floods which hit Serbia in 2014, removal of unexploded ordinance found along the alignments, and excavation and preservation of archeological sites.
The project will support the overall reforms and innovations in the road sector that are priorities for the Ministry of Transport and relevant public enterprises.
“The support of these institutions will lead to increased efficiency and effectiveness of service delivery,” said Svetlana Vukanovic, World Bank Task Team Leader for Corridor X Highway Additional Financing Project. “Completing the Corridor X Highway, which is part of the EU TEN-T Corridor network, and improving the service delivery should provide a solid base for further improvement of regional connectivity and integration, trade exchange, and overall economic development”.