Fresh funds for Balkans but donors demand more reforms

BUCHAREST – International donors unveiled a package of 27 Balkan rebuilding projects worth 2.4 billion euros ($2.2 billion) yesterday but stressed Europe’s most unstable region had to attract more private investment. The funding is already being channeled to the construction of transport links and overhauling of energy and water management plants by the European Union’s Balkan Stability Pact, designed to deliver prosperity to the impoverished region. We’ve provided emergency assistance in the past and reconstruction assistance, European External Affairs Commissioner Chris Patten told a news conference. Now I think we’re building and planning for the longer term. About two thirds of the money is earmarked for transport projects, which have been difficult to get off the ground due to bureaucratic hurdles and continuing conflict on the territory of old Yugoslavia, causing frustration in many recipient countries. Yugoslavia, a major focus for aid and investment since the overthrow of Slobodan Milosevic, will obtain 430 million euros. Croatia and Bosnia can expect about 300 million euros each, with Albania due to secure 250 million and FYROM 60 million. The remainder is being spent on projects across the region. Delegates attending the opening session of the Bucharest conference were reminded, however, that donor aid alone could not transform a region which has yet to recover fully from half a century of communist rule and a decade of crippling wars. However, officials said this was unlikely to mean an end to annual aid of more than 6.5 billion euros in loans from large multilateral lenders, topped up by soft loans and grants. But institutions from the World Bank to the European Commission hope that increased commitment to market reforms throughout the region’s young democracies will secure greater private sector investment if governments improve cooperation. The European Bank for Reconstruction and Development, which has made the Balkans a top investment target under its brief to help finance transition from communism to capitalism, says tax reforms, anti-corruption strategies and freer trade are vital. The growth of small businesses has to be encouraged as part of sweeping reforms to make the investment climate more attractive, donors said. A crackdown on the organized crime that is endemic to the region is an essential step, Patten added. But officials were at pains to stress that they remained committed to the region, seeking to allay fears that the war on terrorism being waged since September 11 would not distract the West from efforts to integrate the Balkans with Western Europe. Either we export stability to the Balkans and Southeast Europe or it exports instability to the rest of Europe, and perhaps the world, Patten told delegates. (Reuters)

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