Yugoslavia wins IMF readmission

Yugoslavia badly needs to rebuild its infrastructure

Yugoslavia is to rejoin the International Monetary Fund (IMF) after being kicked out of the powerful Washington-based organisation eight years ago.

Terms of the agreement have not yet been revealed but the move has been warmly welcomed in Yugoslavia.

It's a green light for investors and we expect substantial private investments next year

Mladjan Dinkic
Central Bank Governor

Under the regime of former President Slobodan Milosevic, Yugoslavia was cut off by the IMF in 1992 and the World Bank in 1993 for its role in a series of Balkan wars and its refusal to pay back loans.

The move is the latest stage in Yugoslavia's international rehabilitation since election of Vojislav Kostunica and popular removal of Slobodan Milosevic in October.

Yugoslav Prime Minister Zoran Zizic said the move was an "important step to the normalisation of relations with the international community."

Great success

"This is a great success for the federal government and the central bank after only two months of negotiations," said Yugoslavia's central bank governor Mladjan Dinkic.

Mladjan Dinkic hopes to attract foreign investment

"It's a green light for investors and we expect substantial private investments next year," he added.

Rejoining the IMF is critical to Yugoslavia because foreign investors are unlikely to return to the troubled economy without a package of economic and structural reforms.

Yugoslavia is also seeking to rejoin the World Bank, but a spokeswoman said a decision has still not been made.

Arrears

"There's still a lot of steps that need to be taken...it could be some time,"she said.

Nato bomb damage in Novi Sad

World Bank officials have agreed in principle to Yugoslavia's readmission, but want the issue of the Balkan nation's $1.7 billion loan arrears to be resolved first.

Yugoslavia's economy is in tatters after more than a decade of war and sanctions, most recently from the Kosovo conflict and Nato bombings last year.

A fresh injection of cash from the two international lenders after years of isolation could prove invaluable in helping rebuild the country's economy, which contracted by more than 20% last year.