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21/06/10 18:54
Balkans Healing But EU, Reforms Crucial: Wolfowitz

World Bank President Paul Wolfowitz said on Tuesday that the prospect of EU membership was crucial for Balkan countries, which are now emerging from their war-torn past but still need to work on key economic reforms, reports Reuters.

Wolfowitz, visiting Belgrade after attending the ceremony to mark the 10th anniversary of the Srebrenica massacre in Bosnia on Monday, said there was a lot left to do in the Balkans but progress since the ethnic wars of the 1990s was "pretty amazing". People in the region had a chance to build new societies, helped by the prospect of European Union membership, he said.

"The aspiration to be part of Europe is powerful and very important," Wolfowitz told the news agency in an interview. "Whatever the temporary issues out of the EU referendums, the whole process of enlargement has been very beneficial to Europe as a whole so far and it is a powerful positive force here in the Balkans...I think it is very important to keep it alive."

Slovenia is the only ex-Yugoslav country to have joined the EU. Of the rest, Croatia is the closest to membership but the start of its entry talks hinges on handing over a war crimes fugitive to the Hague tribunal.

Macedonia has formally applied to join the bloc, while Bosnia and Serbia-Montenegro hope to start talks on a Stabilization and Association Agreement (SAA) this year, conditional on EU-backed reforms and further cooperation with the war crimes court.

However, the European Union has sent mixed signals about enlargement since French and Dutch voters rejected the EU constitution, unnerving Balkan hopefuls who use the lure of EU accession as a sweetener for painful economic reforms. Some EU members have suggested enlargement be suspended.

Wolfowitz noted that political loose ends made for an uncertain business climate. "There is a political framework (in the Balkans) that is still evolving. There are a lot of issues, Kosovo prominently but also Montenegro, which are out there, unresolved, and the lack of resolution is a constraint." If political issues were tackled more decisively, it would help the economy, he said, adding that the biggest challenges were "not post-conflict issues", but "post-communist issues". He added it was up to governments to take outside advice and come up with their country-specific policies, although the need for more privatizations, improved infrastructure and a solid legal framework was common across the region.

Balkan countries, and especially the former Yugoslav republics, have made it through the last 10 years relying heavily on donor support in the form of grants and cheap loans. Data from the European Commission/World Bank Joint Office for South East Europe show the region receives some EUR6.5 billion a year, a disproportionate amount that has critics pointing to needy areas like Africa.

Wolfowitz said aid should fall, but not for that reason. "It should be reduced because ultimately the key to progress is not aid from the outside but initiative and resources of within," he said. "You don΄t want to create situations of long-term dependency, that is not healthy." But he insisted there was no timetable for the Bank to shift its attention from the Balkans. Involvement in the region was "performance based, not calendar based", Wolfowitz added. "As long as our help is needed and as long as people make good use of it, I think we should remain engaged," he said. "But it has to be both. You can΄t stay engaged if people are not doing things for themselves. Fortunately what I have seen the last couple of days says our help is being used very well."

In other news from the region, SeeNews notes the World Bank will grant Bosnia $8.9 million to help the country protect its waters and environment, the news agency of Bosnia΄s Muslim-Croat Federation, Fena, reported on Tuesday. The project is aimed at reducing pollution along the Neretva river. Utilities from six municipalities in the Muslim-Croat Federation, which together with the Serb Republic makes up postwar Bosnia, will be included in the project, Fena said. The World Bank also approved a $10 million project for education restructuring in Bosnia last month. The Bank has committed $1.1 billion to Bosnia through 51 projects since 1996, $32 million of which went toward the reconstruction and reform of the country΄s education system.