ECONOMY

IMF approves financing for Yugoslavia over US objections

BELGRADE (AFP) – A decision by the International Monetary Fund (IMF) to approve a 64-million-dollar loan disbursement to Yugoslavia and a new three-year, $829-million financing program was a «huge step forward» for the country, the Yugoslav Central Bank chief said yesterday. The board’s decision clears for disbursal the remainder of a $255-million program approved in June 2001, the IMF said in a statement. The IMF executive board approved the $829-million program to support Yugoslavia over the next three years, enabling the country to draw a further $64 million once the new program goes into effect today. «This is a huge step forward for our country,» Mladjan Dinkic, National Bank of Yugoslavia (NBJ) chief, told TV B92. He said the decision «means that the foreign currency market, as well as our national currency, the dinar, will be stable,» which would «encourage foreign investments» in the country, impoverished after the years of international sanctions during the regime of ex-strongman Slobodan Milosevic. He noted that the decision would also «remove all obstacles for the dinar to become convertible currency in the world,» adding that he expected the IMF would support the move later this week. The United States, which is the largest member of the IMF, voted against the new financing program for Yugoslavia, for failure to make sufficient progress on war crimes, a US Treasury Department official said. «We voted against the Yugoslavia Extended Arrangement due to concerns about lack of adequate progress toward cooperation with the International War Crimes Tribunal (ICTY). Such progress is key for regional stability, which is an essential basis for economic success in Yugoslavia,» the official said. The US vote against the financing was mandated by the Lautenberg amendment enacted by Congress, which requires votes against non-humanitarian aid to Yugoslavia unless it cooperates to resolve alleged war crimes dating from the 1990s Balkan conflicts, another spokesman noted. But Yugoslav Deputy Prime Minister Miroljub Labus said that the country «has fulfilled all the demands,» insisting that the IMF vote «is a confirmation that we are fulfilling our financial, diplomatic and political duties,» he told Serbian state television. Cooperation law Under strong international pressure, Belgrade adopted last month a law on cooperation with the UN war crimes tribunal, and three suspects have since surrendered to the court. Another two were expected to do so tomorrow. On March 31, the United States decided to freeze its assistance to Belgrade until it proves it is fully cooperating with the UN court.