The World Bank cancels 150 million USD from inherited debt
The President of Kosov묠Fatmir Sejdiu, and the Prime Minister, Hashim Tha詬 signed on the 29th of June 2009, in Washington, adhesion instruments to the International Monetary Fund (IMF) and to the World Bank (WB).
Sejdiu and Tha詠have qualified the inclusion of Kosov롩n the international institutions as an historic development which improves the image of the new-born country on the international scene. Albanian media in Kosov롡nd in Albania have focused much attention on the event (Kosova Sot, Infopress, Korrieri, Republika, Standard, 30.06.2009). In Albania, Republika quotes institutional leaders from Kosov롩n their assessments that the inclusion of the country in the IMF and the WB will give Kosov롥conomic assurance, will improve the image of the new-born country in financial markets and may induce many foreign investors to enter the markets of Kosov롷ith a higher degree of confidence. Besides economic benefits they also expect political benefits.
Prishtina will now be able to address credit requests to the WB. Republika believes the first credit request will be addressed to the international bank with a goal to finance the highway project between V쳭ic롡nd Merdare, which will connect the new highway between Albania and Kosov롴o the Serbian highways at the Merdare connecting hub.
World Bank cancels 150 million USD from inherited debt
The question of inherited debts will possibly be a crucial issue in future discussions between Prishtin롡nd Belgrade. The inclusion of Kosov롩n the international financial organizations (IMF and WB) has arisen anew the problem of the inherited debt to the World Bank. This debt is inherited from the time of ex-Yugoslavia.
As the high ranking delegation from Kosov롦lew to Washington and signed the instruments of inclusion, the press in Albania and in Kosov롡nnounced a partial cancellation of the debt. “The World Bank makes Kosov롡 gift of 150 million USD,” stated Koha Jon롯n the 1st of July 2009. The newspaper explains that the newly included country will be liable to pay 150 million US Dollars (USD) less than the former 381 million USD of inherited debt, reducing liabilities to 231 million USD. The news was also relayed by Serb news agency Tanjug (30.06.2009) which explained that the United States had allocated 150 million dollars to help reduce Kosov먳 debt. Daily press in Albania stated that the government of Kosov롡nd officials of the World Bank will discuss the timing of the reimbursement and interest rates. Though reports in the press give generally the impression that Kosov롩s put on a stand-alone position to pay for the inherited liabilities, the Republican Party newspaper considers the issue as eligible to future negotiations between Kosov롡nd Serbia.
For Republika, inclusion in the World Bank opens new chapters in the question of the debt that Kosov롩nherits from ex-Yugoslavia. The newspaper states that so far Serbia has paid debt on behalf of Kosov묠since Serbia has considered Kosov롡s its own. According to the newspaper, after the independence of Kosov롡nd its inclusion in the international financial organizations, Kosov롡nd Serbia should start negotiations in order to fix debt obligations. These negotiations were part of the Ahtisaari plan. “The problem is not only the agreement on the amount of debt but also who should pay debts to international financial organizations. These debts should have been paid in the nineties, at the time that Serbia governed enterprises and assets in Kosov뢠- assesses Muhamet Mustafa, Professor of Economy, quoted by Republika. On the pages of Standard, (1.07.2009), the local auto-determinist movement Vetvendosja considers that “debts can be inherited only if wealth can be” .
The question of the inherited WB debt will surely soon raise questions concerning Serbia’s stand. Earlier, on the 7th of May 2009, Belgrade-based media and news agency B92, reported that the membership of Kosov롩n the international financing organizations would reopen in Serbia the question of the inherited debt and referred to the Serbian daily Blic, which assessed that on this issue Belgrade’s position was very delicate and that Serbia would not take any active steps “Što infer its willingness to relinquish the debt, as it considered the issue a matter of sovereignty.” Though Kosov롩s now a neighboring country to Serbia and is actually recognized by 60 states, Serb authorities still officially represent Kosov롡s a part of the Serb state.
The questions of inherited debts and assets should normally become part of the framework of future normalized discussions between Kosov롡nd Serbia, once this latter recognizes the independence of the new-born state. Similar discussions have been held between Serbia and former Yugoslav republics.
