YUGOSLAVIA'S DEBT 'BARRIER TO AID'.
Yugoslavia's massive debt stands in the way of desperately needed aid, new President Vojislav Kostunica has been warned, CNN Online and Reuters reports. Officials from the Group of Seven richest nations and organizations including the European Bank for Reconstruction and Development (EBRD), the World Bank, the European Investment Bank (EIB) and European Union Commission were meeting on Tuesday for talks following the end of the regime of former Yugoslav President Slobodan Milosevic. The brief gathering was not expected to bring about pledges of fresh aid for the country, but to encourage Kostunica as he attempts to end Yugoslavia's international isolation.
The EU has already promised an emergency package of 200 million euros ($166 million) to help Serbia through the coming winter, CNN Online notes. Belgrade owes the World Bank alone some $1.7 billion and senior officials from the organization said this week that they would not issue new credit lines until they had reached a restructuring agreement with the new Yugoslav authorities. But Yugoslavia is not in debt to the EBRD, and the organisation's president, Jean Lemierre, said he expected Belgrade to join by the end of the year, opening the way to the rapid implementation of funding projects.
Meanwhile, the Associated Press reports Yugoslavia is urging foreign investors to help rebuild the Balkan country's battered economy. AFP reports that international aid to Yugoslavia was suspended when Slobodan Milosevic was in power, but he was overthrown last month after presidential elections won by Kostunica. European officials said no announcement of new aid was expected to supplement the euros already confirmed by the European Commission, and much smaller amounts offered by France and Britain. Instead the HLSG would "review plans to meet the immediate needs (including winter relief) as well as for donor coordination," the statement said.
Meanwhile, says the International Herald Tribune (p.7) in a separate report, the new governments of Federal Yugoslavia and the Republic of Serbia are finding that Milosevic left enormous holes in the state budgets for such basic needs as electricity, food and payment of pensions.
The weather is still mild but it will soon turn cold, putting sharp strains on energy supplies before the election. The pension-payment system is broken, and there are major shortages of cooking oil, sugar and medicine, notes the story. Serbian officials say that to get through the winter they need $500 million to cover energy, food, medicine and pension costs - $2 million a day alone for electricity and natural gas.
The meeting comes as Yugoslavia hosts its first meeting of another regional grouping aimed at sponsoring economic development, the Balkans Stability Pact, continues the AFP piece. And next week the first summit of heads of government from the EU and the countries of former Yugoslavia and Albania will be held in Zagreb.
In a separate report, AFP notes that the first meeting of the Balkans Stability Pact to be hosted by Yugoslavia brought more pledges of aid for the economically exhausted country yesterday, as regional leaders put Yugoslav reconstruction at the heart of regional stability.
"By the end of the conference we will have hundreds of millions of dollars in promises," Bodo Hombach, the Pact's coordinator, told reporters. The two-day meeting, attended by Yugoslavia's reformist President Vojislav Kostunica and Hungarian Foreign Minister Janos Martyoni, aims to tackle the issues of aid and regional political cooperation.
Hombach insisted that "this is not a donor conference, the final word will come from the donors" at a conference scheduled for December, which will include pact representatives, members of the European Commission and the World Bank.
Separately, Dow Jones reports Russian Finance Minister Alexei Kudrin will insist in talks with Western counterparts this week that any aid to rebuild Yugoslavia be delivered to the federal government rather than to lower levels of government, a foreign ministry spokesman said yesterday.