Delays put Kosovo bank loan at risk

Parliament's failure to agree to a 20-million-dollar aid package from the World Bank could mean time runs out on the deal. The World Bank has told Balkan Insight that if Kosovo does not ratify its $20-million [15-million-euro] package soon, it risks losing it. The funds, agreed earlier this year by the Bank’s board, include $12 million to modernize the outdated land registry system and a further $12 million, [nearly 9 million euro], for bringing other areas of the public sector up to date. Despite a number of discussions in parliament on the issue, the funds, which include a $9 million, [6.75 million euro], grant and $11 million, [8.25 million euro], soft loan, was not approved by parliament, which was dissolved earlier this month ahead of December’s general elections. It could be several months before a new government is formed.


Laura Kullenberg, senior operations officer at the World Bank's Kosovo Office, told Balkan Insight that countries have 18 months from when the deal is approved to ratify the funds. In Kosovo’s case this happened in February 2009. “In many member countries, including Kosovo, financial agreements for World Bank credit-funded operations must, by law, be approved by national parliaments," she said. “Since Kosovo became a member of the World Bank in June 2009, the Bank’s Board of Directors has approved three operations: two investment operations - Real Estate and Cadastre Registration Project, RECAP, and the Public Sector Modernization Project, PSMP, and one budget support operation, SEDPP.


"The Bank hopes these operations are ratified by parliament as soon as possible, so the country can begin to receive the resources and benefits provided by those operations. "If the Bank operations are not ratified within a certain time period the country risks losing the funds." Muharrem Shahini, from the Ministry of Economy and Finance, told Balkan Insight that the funds will be approved when the time was right. "The World Bank loan will be approved by parliament ... at an appropriate moment," he said. “There is no reason for the loan not to be approved, because it is in the citizens’ interest," he said. ”Officials from the Ministry of Economy and Finance said that land registry has a huge need for financial investment, which will lead to an improvement in the business environment. This funding will accelerate development and improve the business environment," Shahini added.


Haki Shatri, former Minister of Economy and Finance and an assembly member for the opposition Alliance for the Future of Kosovo, said that while he supported extra funds for the cadastral office, he feared money given for "public sector modernisation" could disappear into the government’s accounts. Muhamet Mustafa, head of the Riinvest Institute, said the Ministry of Economy and Finance was to blame for the delay as they had not explained the importance of the grant to parliament.

News source: BalkanInsight link: article