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Friday, 29 June, 2001, 15:41 GMT 16:41 UK
Yugoslavia wins $1.3bn aid pledges
A Yugoslav bridge destroyed by NATO bombing
Yugoslavia needs $4bn over the next three years to rebuild its shattered economy
International governments and organisations meeting in Brussels have pledged almost $1.3bn (924m) in aid and loans to help rebuild the Yugoslav economy.

The donor conference came the day after Yugoslavia extradited former president Slobodan Milosevic to the Hague war crimes tribunal.

The United States had threatened to boycott the conference unless the Yugoslav authorities cooperated with the tribunal.

The money is intended to help remedy the damage wreaked on the Yugoslav economy by years of war and mismanagement.

Yugoslav deputy prime minister Miroljub Labus
Labus: Raising money in Brussels
The Yugoslav delegation, headed by deputy prime minister Miroljub Labus, came to Brussels in the hope of securing pledges worth $1.25bn.

That target has been exceeded, but the money may not come in as quickly as Mr Labus and his government hope.

At least some of the commitments represent intentions to work towards debt relief and other forms of indirect assistance, rather than instant hard cash.

Paying up

All the Yugoslav Government's biggest donors and allies made fresh commitments in Brussels.

  • The European Commission said it would donate a total of 530m euros (318m; $450m) over and above contributions made by individual states.
  • The EU also plans to ask the European Investment Bank to extend loan guarantees worth up to 350m euros.
  • The German government pledged 58m euros in bilateral aid, as well as a loan of 51m euros to help stabilize Yugoslavia's foreign debt position.
  • The World Bank announced a pledge of $150m in immediate assistance, as part of an overall five-year $540m package.
  • The European Bank for Reconstruction and Development said it would commit 240m euros to projects in Yugoslavia before the end of the year.
  • The US government offered $182m, the Japanese government $50m, and the Swiss government $22m in immediate assistance.
  • The Paris Club of creditor nations is to reopen talks in September over the $4.4bn it is owed by Yugoslavia.

War damage

The Yugoslav economy is in wretched shape, largely as a result of the misguided economic policies of the Milosevic regime, years of international sanctions, and the financial demands of military activity.

The Yugoslav dinar is near-worthless, annual inflation is about 80% and foreign debt is $12.2bn, one-and-a-half times current gross domestic product.

Belgrade women scavenge for food
Two-thirds of Yugoslavs live below or near the poverty line

A quarter of Yugoslavs are jobless, about 70% live at or below the poverty line, and the country is still home to 600,000 refugees from the Balkan wars.

The country's infrastructure was badly damaged by the 1999 NATO bombing campaign.

One independent group of economist estimated the bombing damage at $4.1bn.

Foreign investors have also proved reluctant to enter the market, despite last year's change of regime.

Rebuilding Yugoslavia's infrastructure will improve the economic prospects of the entire Balkan region, which was closely linked to Serbia before the break-up of Yugoslavia and subsequent slide into civil war.

In an early example of improving trade ties, Yugoslavia, Romania and Croatia initialled a deal on Friday providing for transport of crude from the Black Sea to the Adriatic Sea.

At The Hague

Still wanted



See also:

27 Jun 01 | Business
07 May 01 | Business
20 Dec 00 | Europe
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