CPS 2007 - 2010

Download the new Country Partnership Strategy   here 

The World Bank
Europe and Central Asia Region

                            World Bank Launches New Partnership Strategy 
                                                         for fYR Macedonia

                Program envisages support of up to $280 million for next four years

WASHINGTON, March 27, 2007 — The World Bank’s Board of Executive Directors today discussed a new Country Partnership Strategy (CPS) for fYR Macedonia. The CPS is a document that details the Bank’s work plan to assist client countries achieve their development goals. It describes all of the Bank’s planned operations in the country—lending, analytical work, and technical assistance. The new CPS for FYR Macedonia covers the period 2007-2010 and envisages a lending program of up to $280 million.

Priorities of the new CPS are centered on country’s ambition to join European Union and include support the governments’ ambitious goals on accelerated growth and job creation through an integrated and multi faceted program; to support fYR Macedonia in continuing the progress made in improving governance and reducing corruption, while deepening reforms in key sectors where governance weaknesses continue to undermine progress in the economic reforms necessary to strengthen the economy and create jobs.  Improved transparency and accountability in service delivery is critical to meet the government program on growth, foster human capital, and meet EU standards

“Despite the substantial progress made to date both on political and economic front, remaining challenges are considerable. Economic growth and formal sector job creation have been disappointing.” says Sandra Bloemenkamp, Country Manager for fYR Macedonia ”The country needs to have a comprehensive approach to improving employment, which requires efforts in a number of areas that encompass sound economic and regulatory policies, an attractive investment climate, efficient labor market regulations and institutions, education and training systems that develop relevant and high-quality skills, and a social safety net that offers protection while encouraging employability. An inseparable part of this is improvement of competitiveness of Macedonian companies”.

Proposed activities envisaged under this CPS are focused on two pillars:

Pillar 1: Foster Growth and Job Creation, Increase Living Standards for All.  Under this pillar, the WBG will aim to (i) maintain macro economic stability, while ensuring proper integration of EU priorities into the budget; (ii) improve business environment, including regulatory reform and proper enforcement of contract and creditor rights; (iii) reduce the costs of capital; (iv) improve the enterprise sector’s competitiveness, (v) improve agricultural competitiveness; (vi) establish a functioning land market and institutions; (vii) improve infrastructure for growth by strengthening the framework for public-private partnerships and invest selectively in energy and transport; (viii) remove rigidities in labor market regulations and reduce the labor tax wedge; (ix) develop a productive and appropriately skilled labor force; and (x) use cash transfer systems to encourage school enrolment and preventive health.   

Pillar 2: Public Service Delivery and Supporting Good Governance.  Under this pillar, the WBG will support fYR Macedonia in its efforts to (i) continue its efforts to improve the environment of legal uncertainty and lack of confidence in the judicial system; (ii)  apply proper public finance principles and governance standards at the municipal level, including to municipal public enterprises and utility companies; (iii) continue improving the efficient use of public resources and performance monitoring in the provision of affordable and quality health services, and (iv) make cash transfer systems more targeted and introduce incentives to encourage school enrolment and preventive health.

The previous CAS for FYR Macedonia covered the period 2003 -2006 and envisaged a lending program of up to $165 million.  In the framework of this strategy, the Bank assisted the government implement reforms in community development, education, judiciary, pension system, business environment and health sector restructuring.  These projects have already yielded some positive results. Some examples include improvements in public expenditure management, start of the reform of the civil service, assistance to the decentralization process, improvements in the energy generation capacity, substantially reduced truck waiting times at border crossings and inland clearance terminals, 125 kilometers of repaired primary irrigation canals, benefiting some 25,000 families, more than 140 community infrastructure projects, and more than 15,000 youth who have benefited from the 25 Youth Babylon centers.

The CPS was prepared in partnership with the government of FYR Macedonia and in consultation with representatives of civil society organizations, municipalities and the private sector.