Bosnia and Herzegovina + 2 more

Rebuilding the Balkans

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World Bank briefing discusses region's stability and prospects for economic growth
Former World Bank South East Europe Country Director Christiaan Poortman met with journalists on Thursday to discuss lessons learned and challenges ahead for the sub-region.

"The neighborhood is getting safer," Poortman, who recently took up a new appointment in the Africa Region as Operations Director, told reporters. The countries Poortman was referring to are those that make up the Western Balkans, most of which have come out of recent conflict. Because the World Bank has been given a coordinating role by donors in the reconstruction of the region, Poortman also was in charge of a regional economic effort which is being jointly managed with the European Union during his tenure as Country Director.

Among the reasons for improved security in South East Europe is an increasing level of collaboration among states that had not long ago been torn up by ethnic tension. "The countries of the western Balkans are giving meaning to regional integration," said Poortman. An important reason for this, he noted, is the involvement of the EU with a Stability Pact that calls in part for the eventual integration of these countries into the Union, both setting the standards and driving the cause of their development.

Nonetheless, tensions, though better managed today than six years ago, remain and form a backdrop for development work, creating constraints. "The Bank by charter does not get involved in matters politic, but working in a post-conflict environment puts one in touch with the political reality and creates challenges if one is trying to bring about long-term sustainable development," he said.

The World Bank's work begins in a country coming out of war once the humanitarian needs have been met, to focus instead on the financing of longer term needs. But increasingly, the Bank is playing a greater role in the "post-conflict" period; Bosnia and Herzegovina represent one of the first instances in which the World Bank took a leading post-conflict role.

When it comes to economic development, security means more than the end of conflict. It is the security - financial and legal - that is provided for the private sector and that enables foreign investment in a country's growth. The biggest priority for the Bank's work in this region going forward, said Poortman, is "the nexus of issues around growth and bringing in the private sector." Among the areas where the Bank can have an impact are procedural and legal and banking reform. Corruption is a large related issue and one where the lead of the EU is having an impact.

Poortman also stressed the proven effectiveness of community-level development - individual involvement makes things happen; and in a country dominated by ethnic problems, the community approach has adjunct benefits.

In fact, according to Poortman, one of the Bank's most successful programs in Southeastern Europe has been the provision of microcredit. In just Bosnia and Herzegovina, over the last five years the Local Initiatives Project has helped sustain more than 170,000 jobs and disbursed some 116,000 loans to low-income micro-entrepreneurs. The repayment rates are more than 99 percent. One of the biggest lessons coming out of the region, said Poortman, is that once the basic social needs are met, allowing credit for small business and individual entrepreneurship is one of the most critical components of a country's recovery.

For more information on Economic Reconstruction and Development in South East Europe, visit http://www.seerecon.org/