Yugoslavia and the World Bank

 ' - . · YUGOSLAVIA 77776 · ANDTHE . . WeRLD BANK .. . : •: WI HD WN YUGOSLAVIA AND THE WORLD BANK YUGOSLAVIA AND THE . RLDBANK INTERNATIONAL MONETARY FUND JOINT LIBRARY INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT WASHINGTON. D.C. 20431 BES AVAil ,BLE COP'C  TABLE OF CONTENTS ECONOMIC DEVELOPMENT AND CHA RACTE RISTI CH OF THE YUGOSLAV ECONOMIC SYSTEM 7 UNDERDEVELOPED REGIONS OF YUGOSLAVIA II INTRODUCTO RY REMARKS 23 YUGOSLAV RELATIONS WITH THE WORLD BANK 25 VOLUME AND STRUCTURE OF THE WORLD BANK - FINANCED LOANS IN YUGOSLAVIA 41 STRUCTURAL ADJUSTMENT LOAN 46 TRAINING OF EXPERTS FOR THE WORLD BANK - FINANCED PROJECTS 48 PARTICIPATION OF THE YUGOSLAV ECONOMY IN THE WORLD BANK - FINANCED PROJ ECTS IN YUGOSLAVIA ·57 PARTICIPATION OF YUGOSLAV WORKING ORGANIZATIONS IN WORLD BANK - FINANCED PROJECTS IN OTHER CONNTRIES -79 THE INTERNATIONAL FINANCE CO RPORATION AND YUGOSLAVIA 41 INTERNATIONAL DEVELOPEMENT ASSOCIATION (IDA) 103 NEW ACTIVITIES OF THE WORLD BANK Ill YUGOSLAV WORK ORGANIZATIONS REGISTRERED AS CONSULTANTS WITH THE WORLD BANK IN 1980 125 GLOSSARY 128 Cooperation between Yugoslavia and Cooperation between Yugoslavia and Earlier average annual disbursements the World Bank dates from the time the World Bank has developed in the of World Bank loans were about this international financial institution following sectors:(/) financing the $300 million, foreign exchange inflow was founded. The intensity of economic development of Yugoslavia, to Yugoslavia being about $50 cooperation has varied over certain (2) joint analytical work and million, which had a positive effect eriods, but it has always had a rising exchanges of experience and new on the Country's balance of tendency and was marked by mutual findings, (3) participation in the payments. Decelerated disbursements understanding und a joint readiness World Bank Group's capital, (4) of World Bank loans were reflected to work not only for the fastf:r supplies of goods and implementation in reduced foreign exchange inflows economic development of Yugoslavia of projects financed by World Bank under this category, while obligations and its population, but also for the loans and those by its affiliates, IFC under loans already concluded growth of the World Bank itself as and IDA, (5) co-financing. increased. the biggest multilateral organization Cooperation has been very successful financing the development of the in the first 3 fields, while in the Slower disbursements in World Bank developing countries. The results and remaining sectors it is still in the loan proceeds are the most serious experience gained in almost 40 years early stages. issue in current cooperation between of co-operation make it posible to Yugoslavia and the World Bank. assess relations between Yugoslavia A few years ago disbursement of Activities and measures have been and the World Bank as traditionally World Bank loans slowed down, the undertaken aimed at gradually good, and of benefit to both sides. same slowdown was recorded recently moving out of the present stage in in concluding new loans following our mutual cooperation. Certain Regardless of its current economic global recession, a record debt crisis shifts from infrastructure-oriented to and financial difficulties, Yugoslavia and the difficulties being faced by industry-oriented credits, the has registered dynamic economic and developing countries, including modernization and restructuring of social growth over the past four Yugoslavia, in exporting their industry and technological decades. In the post-war period up to products and services. advancement of the entire export the early Eighties, the social product oriented economy are essential. recorded an avarage annual rise of The shortage of Dinar funds, caused Generally speaking these activities are 6% in real terms. The World Bank mainly by reduced investmeilt more able to accumulate capital and, played a significant role in that activities in the Yugoslav economy, in addition, are prime generators of context. Thanks to good cooperation contributed to that slowdown. This new and increased foreign exchange and thorough knowledge of the was drastically felt in infrastructure earnings. In this and other ways joint Yugoslav socio-economic system, the projects, especially in the road Yugoslav- World Bank efforts should World Bank has tried to adjust the construction, energy, rail link new borrowings to a solution of content and form of this cooperation transportation and water current problems, such as: to the needs and potential of management. These sub-sectors have improvements in the Yugoslavia 's development, as well as also been seriously affected by fast balance-of-payments situation, debt to the specific features of the Dinar depreciations over the last few repaymets in the forthcoming period, Yugoslav economy. One of these years which are requiring increasingly technological development and specific features lies in the great large Dinar amounts to meet the employment. The economic recovery disparities in the development levels obligations due. It was also achieved, after a number of years of of certain regions in the Country. infulenced by the constant decline in stagnation provides the basis for World Bank project financing as a further successful cooperation with consequence of the extension of terms the World Bank. scheduled for project implementation, by a high inflation rate and by the The World Bank's efforts in seeking manner in which funds from the new instruments and forms of World Bank account are disbursed. cooperation with all The period from the project initiative member-countries are evident. In to its completion is long. Long and view of Yugoslavia's economic complex procedures, both in the development level, its productive Country and in the World Bank, are capacities and export possibilities, as also a contributing factor. well as of the balance of payments  ECONOMIC DEVELOPMENT AND CHARACTERISTICS OF THE YUG~SLA V ECONOMIC SYSTEM ECONOMIC The Second half of the Sixties agriculture. Along with these changes, DEVELOPMENT brought significant variations in the employment structure also annual economic growth rates. No changed. Rural inhabitants who, Faithful to the sovereign principles of doubt this was due to deep structural between the wars, represented three independence and non-alignment in disorders which derived from the quarters of the population and the past 40 years Yugoslavia has economic development. In the two-thirds in the early post-war years, invested all her efforts in economic Seventies, Yugoslavia achieved in the early Seventies dropped to and social development. The relatively high average growth rate of one-fifth of the population. country's development efforts have over 6% while at the beginning of the Accordingly, the urban population not been linear but, Yugoslavia has eighties for the reasons of global rose from 20% to 40%. always known how to combine depression, the country confronted p olitical and ideological loyalty with difficulties and stagnation. If refer to a high sense of the practical. the post-war 1947-1980 period, we THE SELF-MANAGEMENT can see that the actual rate of ECONOMIC SYSTEM economic growth was over 6% per Upon its formation after the First year, which is much higher that the World War, Yugoslavia did not Yugoslavia accomplished this world's average. Gross national dynamic economic transofmation by ~ ucceed in reconciling the heterogenous economic trends it had product (GNP) per capita increased developing a system of self-managing inherited. That made Yugoslavia more than five times during the economic organizations. The economically dependent upon the period of hardly more than thirty development of self-management Axis Powers and weakened its years. underwent frequent changes and with dynamic economic growth potential. reason, too, for if had no model or country to follow. The So ifhe enthusiasm of its liberated CHANGES IN THE development could be based only on peoples after the Second World War ECONOMIC STRUCTURE theoretical and logical principles and made possible the rebuilding of the practical experience achieved. country. Attempts at planned The main reason of dynamic administrative industralization quickl y economic growth was the policy of The system attempted to introduce a faced foreign policy and economic intensive industrialization. After 25 maximum of stimulance into the difficulties after 1948. By passing the years of the post-war management of production process. It historic , factories to the workers" industrialization, the average was accomplished by a direct decision, the system of industrial production growth rate was engagemrnt of the workers into the self-management was introduced. It almost I 0%. Agricultural growth was decision-making and management enabled the working people to full y less intensive, but it, too, had processes. Constant application of the how their creative abilities and lead relatively high growth rate of about principle in the entire economy let to the country towards dynamic growth 3% per year average . , association of producers" in which and economic changes. By 1948 the individual production units Yugoslav economy had reached the In the process of dynamic exchanged products of their labour level of the last pre-war year, but that industrialization, the main path of the with other similar units. The results level was not to be increased further reproduction process changed. of labour were avaluated by the until the end of 1952. However, over Industrial production, in 1947 of only market on which the producers were the next fi ve years production 19% of the total production, had also the consumers. Only after an increased by 50%. The economic increased to over 40% in Eighties On objective evaluation through the growth rate in 1957-1964 period was the other hand, the share of market the society implemented the even higher and reached a level of agriculture fell from 43% to less than principle of distribution ,income I 0.2% or five times the rate in betmeen 18%. Just after the war, agricultural according to labour". the Wars period . production was twice the industrial. However, 25 years later, in the late Seventies, the ratio was reversed, the value of industrial production being more than double than that of However, more and more energy and The balance of payment deficit and raw materials for manufacturing were its crediting by international imported ed on basis of financing mainly from private banks unrealistically low exchange rate for is increasing not only because the dinar. These structural differences domestic private and investment caused the Yugoslav economy to expenditures narrow limits of the experience typical cyclical oscilations: necessary accumulation, but also the rise in economic growth brought because domestic production, and increase in imports of energy and agricultural and industrial do not raw materials which resulted in a provide enough exports to meet balance of payment deficit; necessary import needs. Yugoslavia, mainly, an brake on imports resulted in drop of exporter of industrial goods, is economic growth rate and gradually, loosing pace in administrative measures in the competitiveness on Western market import-export field led to new due to risen domestic production structural deformations. costs .. With the energy crisis in the seventies, this problem initially DETERIORATING WORLD PROGRAMME OF cyclical became deeply structural. All ECONOMY ECONOMIC imports now absorbed 20% of the income from exports and at the same STABILIZATION AND Although its foreign debt (payment of RESTRUCTURING OF THE time, weakening discipline of the interest and repayment of principal) self-managed personal income has risen from almost I billion dollars ECONOMY distribution resulted in uncontrolled in 1973 to .75 billion dollars in 1978, consumption that exceeded the labour the Yugoslav economy was able to The trade deficit in 1979 was well rate growth thus causing a drastic carry this burden because it over 7.0 billion dollars (while reduction in savings and investments. represented less then 20% of the cash coverage of imports by exports was inflow into the country which had a below 50%), the inflation rate went up relatively dynamic growth rate of and reached 40% by 1981 . Economic EXTERNAL DISBALANCE exports (especially from tourism and deficit reached enormous figures as AND NEW DEBTS workers remittances from abroad). well. All these signs indicated that the However, in 1982, that burden rose to problem no longer lay in temporary Such development concided with the 4 billion dollars under the difficulties provoked by a general enormous growth of international circumstances of the world depression sluggishness in the world economy liquid financial assets (mainly from and drasticall y reduced possibilities but deep structural economic ,petro-dollars") and the deficit in for export earnings i.e. decline in problems . trade and balance of payment the invisible exports (return of migrant result of the disproportions workers) . The problem was studied in mentioned and easily finance by professional and political international loans. The process While internal disproportions and organizations. Federal Commission to reached its peak in 1978- 1979 when structural weaknesses increased study economic and stabilization almost half of all investments were production costs and reduced problems was set up. Analysis results financed from external loans. international competitiveness and were: that the crisis had arisen foreign currency potential, and because the Constitutional regulations While in the previous period growing interest rates increased were not respected. Attempts were Yugoslavia supplemented its domestic Yugoslavia 's economic obligations, at made to deleate difficulties caused by investment disabilities with foreign the same time the depression of the current economic trends through funds, mainly through the World world economy caused extreme improvised administrative measures. Bank, now private financing is problems in the country's external While the Constitution wanted to give becoming of a prospect. While the liquidity. While in 1974 the Yugoslav full power to self-management by World Bank when approving each debt was about 5.0 billion dollars reducing bureaucratic intervention to loan, investigated the technical with an average interest rate on this a marginal role, the gradual growth of feasibility of a project, and the credit debt was 6.4% with a grace period of ,temporal" administrative measures abilities of the project and the 20 years, in 1982 the debt came to 20 produce opposite results. The national economy as a whole, private billion dollars and the interest rate to problem was even more difficult banks as well as Yugoslav borrowers, 15% while the grace period was because in the meantime political, often irresponsibly and hastily reduced to I 0 years. The situation and administrative republic and entered enormous long-term credits. even more difficult because most of province structures had assumed Up to 1970, the entire Yugoslav debt Yugoslav debts were in dollars which, political and economic power. amounted to less than 2 biUion in comparasion to other currencies, dollars, in 197 5 it reached 6.5 billion had risen over 50% in value. In such dollars and during the period a situation Yugoslavia had no other 1977- 1981 it doubled from 9.5 billion alternative but to ask for a do 20 billion dollars. re scheduling of its international financial obligations.  UNDERDEVELOPED ' ' REGI~NS OF YUGOSLAVIA INHERETED LEVEL OF Agriculture was the basic activity and Yugoslavia' s social development EVELOPMENT AND domestic production was plans determinate goals and measures EGIONAL DIFFERENCES predominant. Using hand tools, for equalising undeveloped republicis animals productivity low. 76.3% of and the Province of Kosovo with the the total population was agrarian. In rest of the country. The measures and ugoslavia is a developing country activities enabling undeveloped 1939 only 75 of 1000 inhabitants were and as such is a significant employed out of which 24 in industry regions to achieve faster national beneficiary of the World Bank assets. far below average employment in production and living standard ere has been a remarkable industry in the West European growth, higher employment rate, and nee in the development of contries. The great distruction during faster social development. and south regions through the the Second World War and enormous . For some parts of Yugoslavia loss of population (I. 7 million) made eration with the World Bank is pecially important. the situation even worse. Yugoslavia INCENTIVES FOR THE had 1% modern road milage in 1947, FASTER DEVELOPMENT railway was none the better. More northern and north-west regions than I I 4 of the overall population OF UNDEVELOPED Yugoslavia attained certain aged over I 0 was illiterate. There was REGIONS ndustrialy developt level even when one doctor per 3,021 inhabitants and the First World War, although one hospital bed per 329 patients; The accelerated development of slower than other West I 05 infants died every I 000. There undeveloped republics and SAP uropean countries. Regions south of were owly 60 university graduates. Kosovo should be solved according e rivers Sava and Danube were to common Yugoslav policy and the favourably positioned. Their Regional differences were abilities and interests of the economy. nomic development was sluggish, great, the problem made even more It should not slow down normal est and barely touched by specific multinational structure of development of production forces in · · n. Southern parts of Yugoslavia due to the ground fertile other regions nor damage optimal lavia were typical agricultural for different disputes and conflicts. economic development in the whole ns with few cities and scarce country. pulation, and production manual. Harmonius regional development was the eve of the Second World War, basis Yugoslav concept. The policy of stimulating faster goslavia was an undeveloped development of the undeveloped ricultural country with a national The 1974, Constitution, clearly republics and SAP Kosovo is based ncome of 112.00 USA dollars, which emphasized the Socialist Federal on the principle that financial country last at the European Republic of Yugoslavia faster investments are primarily directed development of productive forces in towards developing production forces underdeveloped Republics and the as the material base for the future Socialist Autonomous Province of social and economic development. Kosovo. Financial assets and other measures were assured so that Today around 3% of the Yugoslav's material base could be maintained at national income is set aside to the same level throughout the encourage the faster development of country. production forces in those regions. In the period 1947-1951, the Federation Harmonius development of distributed centralized financial assets the Yugoslav economy as a whole to already made programmes and were contained in Article 258 of the projects . Constitution and a special Federal Fund was established for crediting faster economic growth in the undeveloped republics and autonomous regions. Permanent sources of assets were established as well special crediting conditions ndividual Sector was Operative in a Most xtensive Way. Today, m odern machinery n agriculture is widely applied. Detail f rom verrun Way of Land Ploughing.  a Simple Procedure To In stall Electric at Hardly A ccessible Parts of gosla via sixties by establishing a special act to determine the basic principle of subsidies as an additional source covering the budget expenses of SR Bosnia - Herzegovina, Macedonia and SAP Kosovo. This law estimated the obligation of the Federation in ensuring assets to speed up development in these regions. Under the 1963 Constitution, additional assets for development of these regions are designed as a constitutional obligation and a long term solution to these problems. The obligation of the Federation to secure the necessary additional assets for faster development in the undeveloped republics and SAP Kosovo was confirmed by the 1974 Constitution. Starting from this Constitutional regulation, the Law on Additional Assets for Republics and Autonomous Provinces established that ass ets encouraging social services in the developed republics and SAP Ko sovo were ensured at the rate of 0,8 5% for 198 1, 0.82% for 1982, 0. 79% for 1983, 0.76% for 1984 and 0.78% for 1985 respectively from the gross national product (GNP) of the Yugoslav economy as a whole. Besides the Fund and the additional assets for developing social services as fund amental form s of direct social intervention, for the fa ster economic development of the undeveloped republics and SAP Kosovo other meas ures were also undertaken . Engagement of Funds in Modernization and Reconstruction of the Railway System was Insufficient and thereto the World Bank Approved New Credits for the Subject Purposes Another important measure by the Federation is to provide special foreign currency enchange for the economically undeveloped republics and SAP Kosovo to import equipment and effect cash payment for the Fund-financed projects. ACHIEVED DEVELOPMENT LEVEL AND DEVELOPMENTAL DIFFERENCES Results in the development of undeveloped republics and SAP Kosovo include great transformations in the social and economic structure of these regions and a considerably stronger material base for further activation of their natural, economic and human potetials. In the last period, the rate of economic growth was very high and based on significant strictural changes. The average growth of the · nati.onal products per capita (GNP) dunng the past four decades in the economically undeveloped republics and SAP Kosovo was: · total per capita 1948-1957 5.4 3.4 1958-1965 7.5 5.7 1966-1975 6.3 4.6 1976-1984 4.3 3.0  Production and Caule Breeding in Social y CRVENA ZASTAVA- Stip . and Indi vidual Sector will be Intensified acedonia Produces Considerable and thereto Farming Facilities for Big and uantities of Quality Wines Small Size Caule arr; Found ndustry absorbed 38% while other In health welfare striking results were This policy was able to react better to economic fields employed 62%. also recorded. The infant mortality possibilities in the manufacturing Post-war economic development in rate decreased in the 1950- 1982 industry, the services trade and other he undeveloped regions brought period by about 2.5 times, the number activities. That resulted in better migration from rural to other areas . of physicians increased 15 times and responses to the domestic and s a result, the agrarian population the number of hospital beds about 3 international markets producing ell in the undeveloped republics and times . export goods as import substitutes. AP Kosovo from 72.9% to 32.4% in These possibilities have not been used 1981. In the post-war period there was a jn the full because money has chiefly considerable rise in the living been invested in expensive long with changes in the social and standard. During the past ten years infrastructure projects and primary economic structure, the educational the hosing fund alone has doubled. industries not to strenghten level increased. In the 1948- 1983 reproduction. period, the number of pupils in However, these results were not in primary schools increased from accordance with those planned nor These and other weaknesses in the 600,000 to I ,281 ,000; in secondary with the resources set aside for their direct system or accelerating chools from 36,000 to 415,000, and implementation. Fund assets were development through Federation fund niversity students from 2,800 to mainly invested in the infrastructure pointed the need for furhter adaption 149,000. and in capital intensive production of the Fund's role. The social plan of and less in capacities which enabled Yugoslavia for the 1976- 1980 period his dynamic development of faster growth in incomes, employment forecast that 20% of the assets can be education led to a significant change and accumulation. realized through the direct integration In educationa! structure. In the of labour and assets of production. In ost-war period, the number of Fund assets represented a high the social plan for 1981-1985, the uneducated persons declined from quality in investments. The stability percentage of pooled Fund assets ~0.4% to 22.8%, while the number of of assets inflow and in the favourable increased to 50%. During the past those with primary, seconda ry and conditions under which they were three years significant results have higher education increased. given, enabled an efficient been achieved but not those which development policy to be evolved. were expected.  INTRODUCT~RY REMARKS e term ,The World Bank" or, ,The World The five most developed industrial nations (the The , Board" iz responsible for an Annual Bank Group", as normally used, comprises United States, the United Kingdom, the Report on the Bank's operations which, three institutions : Federal Republic of Germany, Japan and together with the Annual Statement of France) with the largest individual share in the Accounts is submitted for approval to the - I BRD - the International Bank for Bank's capital and with the largest number of Bank's Board of Governors and considered at Reconstruction and Development, founded in votes in the ,Board" (42,64%) are entitled to the Annual Meeting of this Institution. 1944, and its two affiliates : designate their own Executive Director and his alternate. The remaining member-countries Within the Bank's Articles of Agreement, a) I FC - the International Finance Corporation elect their Executive Directors by voting, for a ,Board" members have many other tasks : founded in 1956 and two-year term . As the number of such elected consideration of annual operational and b) IDA - the International Development Executive Directors can only be 16, countries financial programs, budget approvals, Association - established in 1960. unite, according to their own choice, in allocation of funds for operational programs, so-called ,Constituencies", while at the same distribution of financial and personnel In this publication the term ,Bank" is used time an agreement exists on the distribution of potentials, and net profit distribution of the with respect to I BRD activities, while the term Executive Directors, Alternates and Advisors' Bank; they also decide on wages systems, .. World Bank" includes the activities of this posts (the post of advisor is possible only in approve scientific and research programs, institution as a whole, i.e. IBRD, IDA and the case of Constituencies comprising six or review analyses of how extended loans are IFC. more countries). implemented, approve the egagement of an independent external financial auditor who he joint objective of these financial For almost 20 years now, Yugoslavia has analyzes the Bank's Annual Statement of institutions is to encourage the economic shared a Constituency with the Netherlands, Accounts, etc. development of developing countries through Romania, Israel and Cyprus. The Executive transfers of funds in the form of loans, credits Director is, under the agreement reached, a In carrying out these tasks, the 42 ,Board" and direct investments, with appropriate Dutchman and his Alternate is a Yugoslav. members (Executive Directors and Alternates) technical and other forms of professional This Constituency has a total of 3.79% of work i between Board sessions in theree assistance . Board votes and ranks eighth among 16 mixed committees and two sub-commitees, which Constiencies (the largest of these is the consider in more detail the above-mentioned he decision to establich IBRD (and the Constituency of 14 Arab countries with a total issues and furnish the Board with information International Monetary Fund) was taken at of 5.64% of the votes, and the smallest is the on their findings and proposals. Bretton Woods, USA, in 1944. By signing a Constituency of 25 African countries having a document on membership by 29 countries, total of 1.78% of the votes). Overall Bank operations are centralized and I BRD was practically established in 1945 and carried out from its Washington-located started operating in 1946. Yugoslavia has only 0.30% of votes in the headquarters. In some, usually the most Board, but an increase to 0.48% is forthcoming. undeveloped, developing countries, the Bank Governments of countries already in the IMF has its representative offices or, depending on qualify for membership of IBRD (currently IBRD is headed by a president who at the the size of operations and problems, its totalling 146). same time is Chairman of the Board of permanent missions with the necessary Executive Directors (the ,Board"). Under an professional staff to assist the local authorities Government representatives of member informal agreement reached among the most in preparing the project to be financed or countries (usually ministers of finance or of the developed countries, the president of the Bank, implementing a project(s) already underway. economy or some other related economic has always been of US nationality to date. In There are at present 24 such missions and department) constitute IBRD'S Board of turn, under the same agreement, the Managing representative offices in the world. Governors, which regularly meets once a year, Director of the International Monetary Fund at the IBRD Annual Meeting, or more comes from one of the West European During execution or implementation of frequently, if the need arises. This, the highest, countries. Bank-financed programs, the Bank's expert management body has transferred certain teams usually visit the project five to seven authorizations in managing IBRD operations to According to IBRD rules, Executive Directors times, and more frequently if needed, in order the Board of Executive Directors consisting of elect the president to a 5-year term by voting. to get an adequate insight into how . 21 members. Each Executive Director has one project funds are being spent, or whether the member. The Board is located in IBRD, in IBRD policies are determined by the , Board", project or program is being carried out in line Washington, D.C. within the framework of IBRD Articles of with the loan agreement. Where necessary, Agreement. Executive Directors and Alternates such teams propose the engagement of acting as Executive Directors take decisions on additional experts and consultants in order to lending operations to member-countries, based avoid certain problems and difficulties during on proposals submitted by the Bank's project or program implementation. president. This body decides on the Bank's policy relating to the financing of developing countries and sets concrete financial terms and conditions, as well as amounts, terms and conditions for the Bank's own borrowing on capital markets . All these and other Board decisions are taken by consensus, and only exceptionally by voting.  YUGOSLAV RELA TI~NS WITH THE WORLD BANK Yugoslavia's relations with the World Later, after transformatio·n of the After long and difficult negatiations, Bank date back forty years. After an World Bank into the ,Group of the October 1949 saw final agreement on Initial period of stagnation durign World Bank" and extension of the permission for the first IBRD's loan past twenty five years they have activities of this institution, to Yugoslavia of only 2.7 million US shown a rising tendency, stability and Yugoslavia established active dollars for the extremely short period a successful balance. Yugoslavia is cooperation with its two affiliates, the of two years. one of the founders of the I FC - International Finance International Bank for Reconstruction Corporation and the IDA Expecting both interest and and Development. When in Bretton International Development understanding in IBRD as in Board lwoods in June 1944 representatives Association. committee which represents from 44 countries gathered to try and founder-members for the country's establish institutional limits for Thus, Yugoslavia is the oniy socialist war devastation and reconstruction economic and financial cooperation, founder-member of the Group of the needs , Yugoslavia proposed to the l Yugoslavia, though still engaged in World Bank with continous Bank at the end of 1949 a long list of the final stages of its liberation membership in all three of its bodies projects valued at about 300 million struggle, sent a delegation to this - IBRD, IFC and IDA. dollars. important conference. A mission of experts in Washington When on the 27th of December 1945 A Tough Start tried hard to make a deal with the . in Washington the documents were Bank's experts and Board committee igned on admission to the Becoming a member of IMF and to finance at least part of the project International Monetary Fund and the IBRD and paying in the appropriate listing. Afterwards, the Bank sent its World Bank, Yugoslavia was one of share in capital, Yugoslavia as an own mission to Yugoslavia to clear the 29 founder-members of these active member of the Allied Coalition up all questions related to those institutions. The other Founders in the Second World War wished to proposed projects and the vital needs were: Bolivia, Brazil, Canada, China, take part in wider action to set up a of reconstruction and development. Columbia, Costa Rica, postwar system of international Soon, the President of the Bank, Mr. Czechoslovakia, Ecuador, Egypt, economic and financial cooperation Eugen R. Black visited Belgrade, in Ethiopia, France, Greece, Guatemala, and to be an active member of the September 1959, where he exchanged Hunduras, Iceland, India, Iraq, process. views with the Yugoslav economic Luxembourg, Holland, Norway, leaders. Paraguauy, Peru, the Philippines, Becoming a member of IBRD, Poland, the South African Union, the Yugoslavia hoped to rely on help and Despite all this, the pickings were support in rebuilding and developing United Kingdom, the United States of America and Uruguay. war devastated country. f rather ,lean". Yugoslavia was ~ iven onl n two loan s - o he m I 951 o 28 milt on dollars and the other in 1953 Unfortunetely, initial period of almost Few years later, Poland and of 30 million dollars. fifteen years did not come up to Czechoslovakia had withdrawn from expectations . Because of the ,Cold the membership of the World Bank Then, there was a long pause till 1961 War" which also affected this · and the Soviet Union had neither when IBRD aid to Yugoslavia was international institution and ratified nor deposited documents on totally haulted. Thd reasons were influenced the policies of IBRD, the its own adm ission to this institution. late Forties and early Fifties, cLearl y pol jtjc,a l jp Iutnd~h e Yugoslavia could not develop the opi~ of some of the Bank's most influential members and their weight cooperation. Therefore, it was forced with the Board of this institutions. to rely in its so earnestly desired resources. The ,Sava" Congress Center in Belgrade and he , Intercontinental" hotel. All three uildings, first the conference building and hen the concert and congress building and the ate/ were b·uilt by, Trudbenik" in three years ccording to a Yugoslav design. n later years, this decentralized Bank's analysis showed that about July 1975 (interest rate 8.5 per cent, · pproach made for good coordination I 00 represenatives from II firms, to be paid in after 18 years with grace etween the leaders of the Federal republics and federal leaders took period of three years). dministration in Belgrade and those part in negotiations on 75 million n the Socialist Republics and the dollars loan in 1972. Exceptionally, However, during the ratification of utonomous Provinces and the on Bank 's approval the negotiations this contract it was not possible to orld Bank. took place in Yugoslavia. come to on agreement on the Yugoslav side, because of water use It should be admitted that at the Not everything went smooth, and problem in the Basin Orin a-Tara was eginning, a coordination on the loan of 70 million dollars which was not solved. By the end of February, Yugoslav side was achieved with intended for hydroelectric power the Government conceited this very ,reat effort. Special difficulty for the station ,Buk Bijela" on the river favourable loan . Federal leaders was to cut down the Drina was cancelled. After short and umber of delegations in negotiations successful negotiations on the loan, n Bank loans, for the Bank insisted the matter judged by the experts to be hat all meetings be held at the a sound economic project, the eadqarters in Washington. The contract was signed on the 30th of (iew of Grand Hall SA VA CENTRE in elgrade During the Session of the World ank and JMF Assembly. ubrovnik is the Most Known Touristic 'entre in Yugoslavia with More than '0.000 Beds in Social Sector. The Sewage stem of the City of Dubrovnik was the ldest in this Part of the World and Was One of numerous ,interchanges " of the highway ,Bratsvo-Jedinstvo Ljubljana - Zagreb - Beograd - Skopje". Detail of the highway passing through the city of Beograd. The construction works carried out by MOSTOGRADNJA, GOSA, MIN and others. SCT - Ljubljana. Designs, builds, inspects and carries out works in all kinds of construction egineering, locally and abroad. Detail of the road Ljubljana - Postojna. So, for example, influenced by the views of earlier experts in agriculture who had worked in colonies and who represented a great number of the Bank's experts at that time, the financing of agriculture in the developing countries clung to traditional models, especially plantations and trading in agricultural products. Up to 1968 this institution financed only one project for agricultural development in 24 countries in West Africa. It should be borne in mind that the representatives of countries that are major shareholders can influence decisions with the Bank. Decisions of the Bank's board are only on special occasions (not more than two or three times per year in specific question) decided by vote and a great number of decisions are reached by conssensus. It is a fact that existing system of voting is open to influence. We must also remember that the influence of the Congress of the United States of America is very strong regarding the Bank's policy. In some cases, in the world of an expert on conditions in the Bank ,that method exceeds the usual forms of persuasion and arguments". However, the World Bank is a unique institution. At meetings of the Board, representatives of more "than 140 countries easuly reach agreement on loaning big sums and credits for a great number of development proje cts.  ombine Zl K Kumanovo, Macedonia is ' e Production Centre for Processing gricultural Products. Silo Built by GOSA Smederevska Palanka rhe ,Board" has to be realistic and leading member countries, mostly World Bank's programme of activity wnsentimental. Projects must be developed, having 61 % of votes and and policy. It often prevents the Bank echnically sound and must provide dominating very important questions from taking the initiative more 1igh returns for the investor country. on loaning to the developing quickly and makes it less likely to ~oans must have the guarantee of the countries, many questions regarding react to pressing problems and overnment that they will be repaid the World Bank's policy. situations in very tough areas ·Such as ·xclusively according to economic financing , economic and social ·riteria. The existing system of vote development in the undeveloped part distribution and decision making in of the World. uestions in which, on the basis of the Bank - accepted four decades revious consultations majority ago-brings forth those elements of That's why non-aligned and greement is not expected, are not domination and blocking in developing countries are in favour of sually put on the agenda. In the decision-making a potential right of changing the present system of the .xisting voting system, the group of veto - by one or several leading Bank's decision-making as in the 127 developing countries is in the members. This hinders and slows IMF, IDA and regional development ·nority (about 39% of votes), 20 down coordination and decisions on banks. In the conclusions of the very important questions of the  ol/ection station of the INA petroleum ndustry of Zagreb. he ,Salakovac" hydro-electric power plant, onstructed by , Hidrogradnja" Sarajevo. The initial period of IBRD did not promise any particular widespread activity or offer much hope for the developing countries. The creators of the Bretton Woods agreement were more occupied with the role and organization of the IMF. This Bank was the Bretton Woods twin but at the same time ,the second born" ... The priority task of the IBRD was seen as being financing reconstruction. Development aid task was at the second place. Soon it became evident that the newely formed institution - IBRD had been born with a couple of defects: low starting capital and a huge dependance on borrowings from the banker's market, the idea of the richest members that the IBRD first of all was a guarantee for all private investment in the developing countries and engaged fewer resources through direct loans, but the statute of the Bank left some questions unsolved and in practice led to controversies, long disputes about the authority of the Bank's Executive Board frequent changes at the top, dependance on, at that time only possible borrowings on the US capital market, the new born ,Bretton Woods" younger twin found in his older brother a powerful guardian - not only in the US administration but in the Congress as well. Due to dangers inherent in all those facts even John Maynard Keynes , head of the British delegation in negotiations tried from the very beginnings, if the IMF and IBRD had to have their headquarters in the USA, not to be in Washington himself, because of the vicinity and interference of the US Administration and the Congress. Port of Bar in Montenegro Capable to Receive Passenger and Freight Vessels of Large Capacities and to Handle the Load Fast The Earhquake at the Montenegro Littoral in 1979 Destroyed the Infrastructure The IBRD developed extremely effective potential in providing transfers of resources. With a real deposit of three billion dollars by member-countries, the IBRD alone (not including the IDA and IFC) was able to ensure a total transfer from 95 billion dollars during the 40 years of operation which shows how with a small deposit a member could effect a big flow of assets from the private capital market. It countinues to do the same thing even today. Moreover, it should be borne in mind that in today's very difficult circumstances the developing countries are plunged into debt. Yet, the IBRD - with its strong credit reputation and guaranteed potential from all the member-countries can provide a high flow resources into capital markets, and through their means to transfer the same resources to the developing countries with long repayment terms. The World Bank has created and maintained a high level of efficiency with a considerable ability to adapt to development demands. Its three branches, the IBRD, IDA and IFC in 1984 transferred about 15 billion dollars in direct loans and credits to the developing countries using co-financing schemes to attract considerable resources from private banks which were co-financing unvestors in the projects being credited by the Bank.  I Tranche 2 59,991 Paper production and processing 1,612 Shipbuilding Printing industry 558 TOTAL: 174,314 57,620 331,934 It can be noted that over a relatively short period of time (just over oM year) the Export Financing Fund has performed an important role in promoting Yugoslav exports to the convertible area. Its foreiP, exchange subloans have made possible imports necessary for export-oriented production worth S 1.275 million.  rea. In seminars relating to rural Banking-related seminars are roject financing, the functioning organized for experts working in such stem of credit institutions directing institutions and deal with the role of gricultural activities, or linked with development banking and the gricultural credits extended either by initiation of a balanced process of i!ntral banks, central planning industrialization. gencies or Government ministries is udied. More than half of all courses relate to technology and necessary estimates eminars dealing with irrigation for proposed industrial projects. rojects are intended for experts in 1e irrigation field. The most Industrial policy and investment portant aspect is a study of planning courses focus on industrial ~vestments in pump stations and the sector projects and include persons btaining of sufficient quantities of making investment decisions. They do ater. These projects relate to not deal with marketing, financing evelopment planning and the and economic aspects only, but rather corporation of new forest with industrial policy in general. omplexes into development Energy projects are covered by rogramms. General planning Small-scale industry has also become courses dealing with finance, ojects are aimed at informing, a topic of World Bank courses, with planning and management in the rough seminars, competent persons the object of indicating the broad energy policy of the country. They planning agencies, finance possibilities of this type of economic include environmental protection, inistries, development banks and activity in production, services and optimal project methodology, as well ther government bodies - on the trade. The courses point to the need as financial and economic analyses of entification, preparation, for developing this economic activity the project. Technical aspects are evelopment and survey of within the context of the Country's added where necessary as evelopment projects covering the overall economy. explanations of the basic project plan. ost important parts of the national conomy. This seminar has all the Courses relating to transportation It is interesting that Yugoslavia does aracteristics of a critical approach projects deal with the identification not apply separately as the World and analysis of the general concept of projects in the transportation Bank member-country for nd methodology of projects and sector with special emphasis on participation in seminars and courses. eir economic feasibility. One deals practice and price formation in the In line with a special agreement, the ith project management, related to courses attended by Yugoslav vestments, with the application of participants are mainly linked with anning and supervision of field of goods transportation. certain projects the World Bank evelopment projects, and their effect Transportation policy and planning - approves to our country. Within the the environment, etc. related courses are attended by senior amount approved for certain projects experts and others employed in our experts are sent to some World egional development planning is th e national transportation, planning and Bank courses either to Washington or pic of seminars in which regional financing ministries, or in planning elsewhere; these are also organized in evelopment policies, plans and commissions or in Yugoslavia, in cooperation with ograms are considered at national transportation-coordinating certain institutions or scientific r regional level. The most important commissions. The issues of institutes. le of this seminar is to contribute to rationalization, price and taxation better understanding between policies, transportation plannning, In early Eighties and before, entral and local authorities with project analyses, problems of . important courses and seminars spect to the Country's development, environmental protection, traffic attended by Yugoslavs included those lans Population planning, health safety and other important issues are dealing with general development, re are aimed at informing and considered in these seminars. credits for the rural population, ~dicating by means of organized industry, agricultural problems, ourses, the manner in which the Railway projects and management are highway projects, transportation opulation, its development and subjects of one of the numerous planning, project designing, rowth can be planned. It is closely courses whose object is to ensure safe agroindustry, power plant-designing, nked with family-planning in other and qualitative transportation as early rail transportation design, urban ectors, like health care, nutrition, as the project design stage and transportation, management projects, ducation and rural development. management of railway activities . and national economy development. rbanisation is envisaged as the main Urban transportation courses are for A number of courses were held in bject of courses dealing with urban engineers, economists, planners and Yugoslavia, again organized by the evelopment with a special focus on also include urban transportation World Bank. This practice will be e solution of residential problems policy-makers. Links between the continued in future as well. Courses f lower income families. transportation and urban structures held in industrial development, must ensure better transport, which is agriculture, general planning and groindustrial projects and seminars currently a matter of concern in transportation planning are only a eld in connection with this topic almost all the cities in the world. few. over the preparation, development nd financing of food industry They were attended by representatives rojects. of various enterprises, banks, colleges, agricultural combinats, institutes, etc.  PARTICIPATION OF THE YUGOSLAV EC~NOMY IN THE WORLD BANK-FINANCED PROJECTS IN YUGOSLAVIA roblems relating to the In order to gain a realistic picture of Average terms -the term of project mplementation of World the potential, successes, failures and implementation with World Bank capabilities of the domestic economy financial participation is about five Bank-financed projects in implementing World Bank loans years. These terms, as has already extended for its development, a been stated, are entered into the Loan ~artnership between Yugoslavia and detailed overview of all relevant Agreement. The term necessary for he World Bank is fruitful and factors and conditions will be project implementation depends on uccessful. That partnership has most described in which partnership with its size and complexity. Large requently resulted in World Bank this international financial multipurpose and infrastructure inancial assistance to the economic organization developed. The basic projects take more time to execute. levelopment of Yugoslavia. and initial parameter affecting the However, few projects can be rherefore, the amounts of loans, involvement of our economy is the executed in less than four years. orrowing status, dynamics of loan volume of loans the World Bank has ·xtension and direct effects of the extended to Yugoslavia. Another A comparative review of World Bank ~rojects primarily on exports, import important factor is the Country's committed and disbursed loans follows: ubstitution, major infrastructure ability to disburse committed funds at mdertakings, etc. have often been the a given time. Then, the institutional 'ocus of attention. However, not In millions $ and legal framework which exerts an ,nough j1as been said or written influence on the possibility of the Period Commit- Disbursed Outstanding tbout the indirect effects of received domestic economy participating in ted (undisbursed) oans on overall economic flows in the implementation of World Bank funds he Country. What is involved are the projects will follow . Special emphasis ultiplicative effects of World Bank will be placed on the contribution of 2-3 2 3 oans on the Country's economic the participants through supplies of !evelopment which make these loans equipment and implementation of 1950-1976 1,180.7 770.0 410.7 pecific and different from other projects. Some failings and errors will ypes of international borrowings - be also highlighted, as well as 1976-1980 1,297.0 760.4 536.6 ure financial and commercial possibilities for greater involvement ·redits, World Bank financing of of our economy in these contracts. 1980-1984 1,199.6 1,071.5 128.1 arge projects helps create potential ossibilities for the major engagement Cooperation with the World Bank, TOTAL f our economy through supplies of measured by the volume of extended 1950- 1984 : 3,677.3 2,601.9 1,075.4 :quipment and implementation of loans, has oscillated over the past nvestment projects, which then result period. Only in the last ten years has n significant foreign exchange this partnership started to flourish. In The last column in this Table nflows to the country. addition to a larger amount of indicates the state at the end of each committed funds, other contents and period (June 30). The Review ur intention is to discuss first the forms of cooperation have expanded. highlights the following: (a) that esults achieved by our economy, borrowings in all periods under nainly industry and construction in The implementation schedule of each review were faster than upplies of equipment and projects individual project is set by the loan disbursements, (b) there was a large inanced by the World Bank. agreement. As large projects are gap between commitme~ts and ~eference will be also made to the concerned, the terms and stages of disbursements of funds m the mportant role of joint activities with implementation must be precisely 1976-1980 period, (c) a more 'oreign partners in supplying the most determined. Several factors influence balanced proportion between nodern equipment and in training the the achievement of the terms laid commitments and disbursements took ugoslav economy to operate down in the Loan Agreement. place in the final period owing to ndependently in the country and reduced borrowings and more broad. accelerated disbursements.  s commitments were faster than loan portions have been rather The Loan Agreements set upper limits i~bursements in earlier periods, in frequent recently, ranging from - percentages - up to which the Bank Id-1984 total cumulative several hundred s to several millions will participate in local costs as an utstanding (undisbursed) funds of dollars. indirect foreign exchange component. otalled $ I ,075.4 million (as of June In the case of our country, those 0). The lack of local (Dinar) fund s is the percent~ges range from 30-60, basic reason for slow disbursements dependmg on the type of project. he volume of disbursed World Bank of World Bank loan s. It is known that Withdrawal of resources from the oans in the last four years the share of Dinar funds (local , loan account" in the World Bank is 1980- 1984) was better than in the so urces) in the overall estimated cost carried out under the principle of receeding four-year period. However, of World Bank-financed projects reimbursing costs already in Dinars. f the latest period is analysed on an accounts for 60%. H?wever, from the moment of paying nnual basis, it is noted that fund Dmars to domestic suppliers and lisbursements rapidly fell over the The drop in investment activities in c· st two years. If reviewed per each the s;tuat;on was as follows: the Country, non-liquidity and reduced capital formation ability of the economy have all had an impact on the abilites of almost all borrowers contractors (often at fixed and previously agreed prices), till the moment of placing orders for reimbursement to the Bank (with · Y81 $ 218.0 milli on to provide local currency funds. enclosed invoices) considerable time However, the intensity of this elapses; meanwhile the Dinar f Y82 $ 330.3 million phenomenon was not equally felt by depreciates and so fewer Dollars are Y83 $ 291.7 milli on all sub-sectors and regions. Those receive for the same amount in f Y84 $ 231.5 million Dinars. This leads to a relative borrowers with fixed revenues and OTAL 198 1-83: $I ,07 1.5 million th ose faced with limited price ,surplus" of the loan in relation to increases of their products and the given project ; that is, the project se rvices were in a particulary hard is completed with lower World Bank lmost one half of loans under par~icipation than that originally lisbursement register ,overruns" in posi~ion. Thi.s was most drasticall y felt. m s? me Infrastructure projects, envi saged by the Agreement. This elation to the di sbursement schedule relative ,surplus" of the loan in nvisaged in the Loan Agreement. maml y m road construction. relation to the project is most verruns relating to project Depreciations of the Dinar vis-a-vis frequently solved in one of the ompletion range from 2- 3 years. hard currencies have been very following ways: (a) by project tis the World Bank's usual practice stro ngl y pronounced over the last 3-4 ~mplification - if poss ible, b y the o approve extensions of closing date s years . In the course of the last 4 years mclu sion of new similar subprojects; or project completion and for loan the value of the Dinar with resp~ct to (b) by annullment of the loan lisburse ments , respectively. Howeve r, the Dollar has depreciated mo:e than ,surplus"; (c) by a timely increase of hi s practice is not automatic and ten times. Most projects were World Bank participation in local loes not take place in all cases. There\:._ executed when the exchange rate costs. In the majority of cases the as recently been a decreasing between the Dinar and the Dollar World Bank decides on which type of lumber of re-approval s of closing was considerably more favourable these 3 modalities is to be applied. late extensions. The World Bank a nd stable. A lower inflation rate was a lso expected. All thi s led to large As can be seen, the high inflation rate arns the borrower in advance of has had many effects on ossible consequences. These cost overruns of investments while onsequences are annulment of the avai lable funds to cover the~ were di sburse ments of World Bank loans. mdisbursed portion of the loan limited . A large number of borrowers roceeds , regardless of the fact that traditional World Bank loan ' he borrower, from the moment of beneficiaries, were obliged to use igning the Loan Agreement, pays an nearly all their revenues to repay mnual nonreimbursable commission earlier di sbursed loans. The level of f 0.75%, including the portion of repayments falling due in the second nnulled funds. Examples of annulled half of 1984 was I 0 times those in the first half of 1980, although tihs in vo lved the sa me amount in Dollar terms. Hotel Complex BERNARDIN- PORTOROt. Th e World Bank Extended Loans for Development of Touristic Economy is adversely affected, but also the speed in disbursing World Bank loans . Quite often suppliers of equipment and contractors do not respect contracted terms. Shortages of necessary material and spare parts and deteriorating links in the reproduction chain prevent suppliers from respecting contract schedules. Slow disbursements of World Bank loans have numerous negative consequences. Firstly, a commission of 0.75% per annum is paid to the World Bank . In a one-year period only,$ 7.5 million is paid on account of$ I billion of outstanding funds with the World Bank . Moreover, indirect damage generated by delayed project completion is enormous - immobilization of large financial resources, investment overruns and increased project costs. Earlier, when the average of disbursed funds was $ 300 million per year, the foreign exchange inflow under World Bank loans ranged from between$ 150- 160 million, which reflected positively on the balance of payments of the Country. However, as pointed out, disbursement of loans is declining, accompanied automatically by a decline in foreign exchange inflows. On the other hand, repayment obligations falling due are increasing from year to year. In 1984, they amounted to about $ 320 million ($ 160 million on principal and the same amount on interest payments) . Over the past few years measures have been introduced at all levels aimed at faster disbursement of World Bank loans. In 1984, significant changes were introduced in prices policy (in accordance with the Long- Term Program of Economic Stabilization) so that in areas and sub-branches where prices had beem o Make Operative the Project of Land System at Kosovo Province it is to Dislocate and Build Again Communication Facilities one can see from the full title of these aspects because many According to the Bank's provisions of Guidelines, the term ,guidelines" inexperienced borrowers consider the the Articles of Agreement it is used, and not terms or regulations Guidelines in the beginning as a required to ensure that the proceeds provisions and, further on in the non-obliging document, or even as a of its loans are used with due roduction it says that their basic simple manual. Such misconceptions attention to economy and efficiency. sk is to ,inform" ... However, if one and misplaced attitudes are very soon s the contents of the Guidelines corrected in practice, but with certain ore carefully, it is easy to realise consequences. It has established detailed t this document represents Each loan agreement entered into procurement procedures to be mething more than plain between the World Bank and the followed in the execution of each idelines; in other words, it is a Borrower stipulates that works and project. vision imposing obligations, goods will be procured on the basis quiring strict rules of behaviour of separate contracts which are The Bank started from three basic ring procurements and certain entered into between the Borrower requirements in setting the when the provisions and contractor, in accordance with procurement policy: (a) the need for ined in the Guidelines are procedures set forth in the economy and efficiency in the alated. It is important to point out Guidelines. execution of the project, including the  Yugoslavia Invests Considerable Funds in Development of Undeveloped Parts of the Country. Hotel GRAND- Pristina at Kosovo Provin ce , Federation Fund Directed Means into A lmost All Facilities of the Undeveloped Province of Kosovo. As a Result- Textile Combine Gnjilane preferences to domestic manufacturers and, finally , award of a contract. In cases where international competitive bidding (ICB) is not. the most efficient and economic way of procurement or performance of a project, a bidding may be organized which is locally advertized and in conformity with procedures in the Country. The Guidelines cite examples when procurements are carried out in line with local procedures (civil works of smaller size, minor purchases of goods and equipment, etc.). In fact, this would be the type of work in which foreign bidders would have no interest. The same applies to those cases where the costs of international biddings are so high so that there is no sense in using this procedure. In addition, international bidding takes considerable time, which influences the speed of total project implementation . The Bank and the Borrower agree upon and enter into a Loan Agreement, whose goods and works reguire an application to the ICB and are the object of local competitive bidding (LCB). The World Bank's engagement and monitoring in the procurement process last until definite completion of the project. Its staff is very intensively involved during project appraisal ; it takes into account and examines the nature and types of goods and civil works to be financed, the most suitable modalities of procurement, as wetl as the capabilities of local manufacturers and contractors. Details of project-related procurement are discussed and agreed upon during negotiations with the borrower. The World Bank Approves Credits For Production and Processing of Crude Oil. One of Plants and Facilities at Omisalj at the Adriatic Coast. The most striking feature of the above Table is that net foreign exchange inflows to the Country under World Bank loans extended to Yugoslavia were greatest over the last four years. This period accounts for 46% of all foreing exchange inflows from the 1950-1984 period. Another feature is that net foreign exchange inflows to the Country increased from period to period in relation to foreign exchange payments made to foreign suppliers, which is assessed very positively as an achievement by the Yugoslav economy in minning contracts for projects financed by the World Bank in Yugoslavia. Needless to say, periodical foreign exchange movements of inflows are important, but the best insight is obtained by reviewing annual movements. Annual net foreign exchange inflows In millions of dollars Fiscal years Total Payments disbursed in the Country % 1977 104.0 55 .0 53 .0 1978 156.0 84.0 53 .8 1979 219.0 103.7 47.3 1980 281.4 180.1 64.0 1981 218 .0 158.9 72.9 1982 330.3 199.5 60.3 1983 291.7 182.0 62.4 1984 231.5 152.8 66.0 TOTAL I ,831.9 1,116.0 60.9 1977 - 1984 : ement Mill SAR of Djeneral Jankovic at osovo Province, Built by the Funds xtended by the Federation and the World ank y, Sarajevo Made a Significant Step wards Human Environment Protection . the City is Equipped For System Application. Detail Works at Gasification System The above data suggest variations in the foreign exchange inflow to the country realized under disbursements of funds for certain projects: of almost l 00% of loan disbursements in the Country (loans for road construction) up to l 00% of disbursements abroad - in the case of loans for industrial credit lines. The question arises as to whether it was necessary, indispensable and justified to procure equipment abroad for all sub-projects (particularly when medium - and small - size projects are concerned) in different industrial sub-sectors. As a large number of different projects were concerned, involving a variety of different equipment, it is hard to believe that the domestic industry could have been so weak or non-competitive. There are no precise figures on either the position of the total foreign exchange inflow realized under the indirect foreign exchange component (realized by the established r mechanism and recognized rights), or the portion generated from contracts which the domestic economy had earned by competing in internationally invited biddings. They would be very interesting, significant and helpful for assessing the competitiveness of our economy in World Bank - financed projects in Yugoslavia. Some estimates indicate that the share of the inirect foreign exchange component in the total foreign exchange inflow was about 50% over longer period of time, while the remaining half was the result of the works and goods supplied in conformity with the procedures of international biddings.  near Beske (Novi Sad) over the River Named the largest river gate in to the span between the bearings. lPcicrr.-•rt by MOSTOGRADNJA, Beograd. works and equipment is signed. There - are no precise figures on the number of such concluded contracts with our suppliers of works and goods and their values since 1950 onwards, as borrowers are not obliged to register these data statistically. The World Bank, however, registers contracts of great value, most frequently those which result from international biddings. These contracts will be referred to later in the text. Starting from the total foreign exchange inflows realized over the 1950- 1984 period($ 1,515 million) and the average number of contracts per project, a tentative indicator is obtained showing that more than . I ,000 contracts were concluded worth more than $ I 0,000 each. The Yugoslav organizations of associated labour which participated in works and supplies for projects in Yugoslavia were numerous. According to some estimates, more than 50% of Yugoslavia's working organizations were directly or indirectly engaged in the execution of World Bank-financed projects in Yugoslavia. Economic sectors and subsectors most directly linked with the supplies of work, goods, materials and equipment under World Bank loans were the following: 0 building materials industry, 0 machine-building, 0 ferrous metallurgy, 0 non-ferrous metallurgy, 0 electrical industry, 0 building industry, 0 transportation, 0 serv uce crafts 0 service activities - including scientific organizations and institutes.  uppliers of work and goods with success achieved in biddings in FY77 No. of contracts Value of works ontractorI supplier (contracted value) Project/ loan in 000 of$ Elektromontaza", Belgrade I 2,603 Port of Bar Hidroelektra", Zagreb 2 12,120 Port of Bar Trudbenik", Belgrade I 3,560 Port of Bar Radoje Dakic", Titograd I 739 Port of Bar Nivo", Celje I 1,084 Regulation Unioninvest", Sarajevo I 0,493 Regulation Autokomerc" Ljubljana I 798 380 kV grid Crna Gora", Niksic I 1,374 VII loan for achieved, to encourage them and roads offer them references for their further activity in biddings for contracts in f'IK ,Zeta", Titograd I 3,348 VII loan for the face very of tough competitions. roads In 1977, the first. year under review, Iskra", Kranj I 3,049 VI loan for good results were achieved. Of the 14 railways organizations of associated labour mentioned, only two had contracts Rad", Belgrade 2 4,590 VI loan for worth less than one million dollars. railways This exception was made because in both cases supplies of special Hidroelektra"/ ,Konstruktor", I 9,482 VI loan for significance for our economy were tijeka concerned. The best results were railways registered by RM K Zenica - about $ Ilinden", Skopje I 1,329 VI loan for 17 million contracted - to cover the supply of railroad tracks for railways modernization of the Yugoslav ~MK Zenica railways. 9 16,970 VI loan for railways The above data indicate that all of the contracts won were signed for a small number of loans (five only), ontractors and suppliers with contracts signed in 1978 \ although at that time a considerable number of loans were under ontractor/ supplier No. of contracts Value of works/ Project/ loan disbursement. However, it has already contracted value been stated that our contractors and in thousands of$ suppliers did not participate in certain loans or that their l Metalservis", Belgrade I 3,143 Infrastructure, participation was smaller in volume - Sarajevo amounts. L dcogmdnja", Samjovo r 1,466 Infrastructure, As was indicated earlier, 1979 was the Sarajevo most successful year for our contractors and suppliers. Over the Dalmacija cement", Split I 1,348 Infrastructure, past eight years, the biggest contracts Sarajevo were signed in 1979. One working I organization, alone, ( "'togmdnja", Belgmde I 8,074 Infrastructure, ,Makedonijainvest" of Skopje, Sarajevo concluded 3 contracts whose value was almost equal to all the major P ,Put", Sarajevo I 7,336 Infrastructure, contracted amounts in FY77. That Sarajevo year, in relation to the preceding two, was also richer and more diversified l Unioninve<t", Samjevo 3 30,577 Infrastructure, with respect to the number of projects Sarajevo (loans) within which contracts were concluded - 12 in total - again ,lngra", Zagreb 3 8,842 The Yugoslav exceeding the sum of the previous pipeline two years. Minor contracts were not included in this List (due to limited ,Ivan Milutinovic", Belgrade I 1,909 The Yugoslav space), although these contracts and pipeline their prime contractors deserve due recognition. I ist ()f concluded contracts (of major value) in 1980 ontractorI supplier Contracted value in Project/ loan thousands of dollars Jedinstvo", Zagreb 1,053 VIII loan for roads Energoinvest", Sarajevo 1,702 Environmental protection loan, Sarajevo Binicka Morava", Pristina 13,416 lbar- Lepenac Rade Koncar", Zagreb 719 Water supply system, Dubrovnik 1 l.IK , Osijek", Civil construction 17,050 II agriculture credit line forking organization Jedinstvo", T. Uzice 1,780 Regulation of the Morava River basin international biddings. , Unioninvest" IRO ,.Vmn;oa", Smjovo 12,896 Agricultural development in of Sarajevo, not accidentally, appeared twice in the List for 1981. Macedonia In the first case, its name appeared I""• CaOak 2,829 Agricultural development in Macedonia with respect to civil works and in the second with respect to supplies of equipment. In addition, different fetal complex ,Tito", Skopje 2,444 Water management project borrowers - investors or projects under implementation were involed. , Metohija" Almost all organizations included in the List were awarded large contracts ist of organizations awarded major contracts in 1981 (per project) - only one below the value of one million dollars. , Unioninvest" of mtractor/su pplicr No. o f Con tracted va lue Description Project/loan Sarajevo and ,Prva Iskra" of contracts inOOOof $ of works Belgrade had the largest concluded Jedinstvo" . 1 2,254 Construction Morava I contractual values of that year. The itovo Uzice works share of organizations supplying goods was also substantial. Ratko MitroviC" . I 1,004 Co nstruction Morava I e lgrade works In 1982 alone, the ,Ramiz Sadiku" Nivo" , Ce lj e I I ,422 Construction works Morava I enterprise from Pristina concluded 3 contracts for one project, while all the Pelagonija" . Skopje I 6,2 17 Construction Agr . development rest concluded one contract each. An works in Macedonia important contract was won by ,Energoinvest" from Sarajevo ($ 19.8 Unioninvest". 2 22,888 Constructio n AIPK Bosanska million). As could be seen from the arajevo works Krajina 1 List for the preceding year, contracts ' IK .. Kozara " I 8.822 Constructio n AIPK Bosanska with Borrower - Investors for the - anja Luka works Krajin a performance of civil works are generally larger in value terms than Prvi Iskra". Baric I 9.026 Construction AIPK Bosanska those for equipment supplies. On the works Kraj in a other hand, the World Bank's ,recognition" of foreign exchange Agro indu strij a", I 1.014 Construction Cc movsko polj e. oviSad works Monte negro participation on account of indirect foreign exchange component in civil ;vt K , U rosev ac". I 0,736 Equipment Water suppl y works contracts was lower in the case rosevac system, Prist ina of equipment supplies. As the Loan Agreement for modernization of the Energo in vest ", 5 o.is46 Equipment Hydroe lectricpowe r railways in Kosovo states that the arajevo plants on the World Bank will finance costs of Neretva equipment (signal and jUn is" , Sarajevo I l ,3RO Equipment Hydroel ectricpower telecommunication devices) in foreign pl antso nthe Neretva exchange with a 95% of the total value of those costs incurred by the li Nis RIO Equipment 380 kV powe r Borrower-Investor, the contract won transmission by ,Energoinvest", for this project was of great importance, both for the Un ion in vest" , 1,014 Equipment Ce movsko polje. prajevo Montene Qro organization itself and for the Country in general.  No. of List of organizations \\-ith major contractual values in 1984 Projec t/ loan co ncl uded Co nt racto r/supp lier Nu m ber of Co ntracted va lue Project/ loan contracb contracts OOOof$ X loa n fo r roads 10 , Prva Iskra". Be lgrade I I ,800 Regio nal developm ent of Se rbi a Reco nstru ct io n of th e Po rt of Ba r afte r the ea rthqu ake 19 , Jugoa uto", Be lgrade 2 2,829 Regio nal deve lopment o f Se rbi a I I I credit lin e for ag ri culture 2 , Agro in dustrij a" , No vi Sad 2 3,776 Regional developme nt of XI loa n fo r roads I Se rbi a Modrcni za tio n of the rai lways , U ni on meta l", Belgrade I 4,900 Regio nal developm ent o f in Kosovo 2 Serbi a Agro- in dustry in Macedo nia 3 ,Ce r", Cacak I I ,324 Reg io nal deve lopme nt of Se rbi a Agro-industry in Bos ni a and He rcegov in a 4 , ,Seve r", Suboti ca I 2,030 Regio nal deve lopm ent of Serbi a Reco nst ructi o n of the City ofTuzla 5 , Soko", Mostar 1 7,683 Regio nal deve lopment Regio nal deve lop me nt , Hi drog rad nj a", Sarajevo 3 II ,954 Hyd romechanizati on of Serb ia 8 Semberij a and hydro- e lectric powe r pl ant o n the TOTAL: 54 Neretva Ri ver inally, let u s mention the G RO , Tempo", Zag reb 1 2,758 Hyd romechanizati on Semberij a S lovenijaceste" working organization hich won the largest contract in ,Litost roj" , Ljublj ana 2 5,449 Hydroelectric powe r pl ants 983 . o n the Neretva Rive r . s the Table s hows, Yugoslav .. Rade Ko nca r", Zagreb 2 3,796 Hydroe lectri c power pl ants pterprises concluded 54 contracts of o n the Neretva River ajor value in 1983. According to ' orld Bank data, our organizations MIN, screws fac to ry, Svrlji g 3 4,484 VI loan fo r rail ways st 34 bids in that year, which were ZTP-Infrastructure, Zagreb 1 1,830 VI Joan fo r railways fv arded to foreign contractors and ppliers. MI N-1 2. fe bruar, NI S 2 3.054 VI loan fo r railway ~e value structure of the 1983 RMK - Zeni ca 4 20 ,311 VI loan fo r railways ntracts was as follows : , ,E nergoinvest", Sarajevo 3 1,75 1 VI loan fo r railways ivil construction 30.3% , Iskra" , Kranj 4 2,024 VI loan fo r railways uilding material 47 .7% , Put", Pristi na 4 3, 168 X loan for roads , ,Mavrovo" , Skopj e 1 32,288 X loan for roads quipment 22.0% OTAL : ' . 100.00% , Pe lago nij a" , Skopj e 1 24,005 X loan for roads , J ugosla vij apu t", Be lgrade 1 1,667 X loan for roads ., Vojvodin aput" , Novi Sad 1 1,825 X loan for roads he li st of organizations of associated bour in 1984 is longer than in any .. Vij adukt ", Zagreb 3 5,516 X nad XI Ionas for the TYN f the preceding seven years. It is !most twice as long as some earlier ., G ranit' ' , Skopj e 1 11 ,570 X loan for roads ears. The List indicates that contract alues were somewhat lower than in 1e years up to 1980. The column umber of contracts" shows that the umber of contracts increased (with 1e same contractor and for the same -~~ject) in relation to earlier years. 'his means that biddings were maller in size compared with the receding years . The reasons for this  PARTICIPATION OF YUGOSLAV WORKING ORGANIZATIONS IN WORLD BANK-FINANCED PR~JECTS IN OTHER COUNTRIES portance of participation in manner in which it pursues its catalyzing the foreign capital inflows orld Bank-financed projects business activities are of significant coming from different bilateral, benefit to those involved in multilateral, official and private he World Bank, as one of major implementing projects. Finally, sources, with the aim of being a urces and catalysts in engaging successful deliveries of goods and leading partner and coordinator of reign fund to finance projects in successful extension of services help finance and assistance to LDCs' ss developed countries (LDCs), provide excellent references both in development. One way to ensure gnificantly contributes by its overall the recipient countries and elsewhere. major inflows of financial resources ancial and investment activities to Competitiveness thus gains in to LDCs and to encourage their faster e promotion of general strength, penetration of new markets development is co-financing •. !velopment in its member countries. is easier, and inclusion in new Co-financing offers new possibilities also indirectly furnishes different contracts, where there is strong to Yugoslav firms of taking part in vantages and facilities to international competition and implementing development projects in anufactuters and suppliers of considerable advantages for firms LDCs. pita) goods and to performers of from developed countries is possible. vestment activities once they are This is of particular importance for World Bank-financed projects involve tively engaged (by means of working organizations from both the external and internal cost ternational bidding) in Yugoslavia and from other LDCs components envisaged for project ~plementing World Bank-financed whose development in their respective execution. This execution is carried ·ojects. As the World Bank has countries has already qualified them out in line with a number of the !veloped and applied an to seek a broader inclusion in the World Bank's rules and procedures. ctraordinarily competent financial, international lfibour division (energy, Selection of the most advantageous vestment and professional-technical metal-processing industry, agriculture supplier of necessary goods and tivity related to the preparation, and agro-industry). services is also in line with regulated priasal and implementation of procedure, i.e. through international ·ojects, and as its policy is aimed at In their previous longstanding bidding (ICB - International p priority projects - the programs cooperation with the World Bank, Competitive Bidding). · investor countries - then it is mainly in implementing WB-financed ossible to evaluate the prospects and development projects in Yugoslavia, a By the end of FY84 more than 60% 1portance of a successful large number of Yugoslav enterprises, of World Bank and IDA disbursed 1plementation of each project it experts and institutions have received funds was used for making payments ances, as well as the responsibility professional training, export to suppliers of goods and services those, who by supplying goods and potentials have increased and there outside the borrowing countries. The rvices, partici pate in their has been a growing orientation most important suppliers of goods ·eparation and implementation. For towards broader and longer-term and services, used in the anufacturer-suppliers of goods and international cooperation, especially implementation of World Bank rvices from the LDCs, like in implementing development projects projects, were from the developed ugoslavia, in addition to safe and in LDCs. More comprehensive and countries, but suppliers from LDCs shpayments ensured by the Worldl fruitful cooperation is being caried have been increasingly successful in nk, great importance derives from out in that field, new experience winning new contracts. Therefore, ·ofessional and technical assistance being gained and certain resuilts their share of 7.7% at the end of td experience, informative, legal and achieved. FY79 increased to 16.5% in FY84. At her types of assistance and the same time the share of local perience gained by participating in In view of the fact that projects and suppliers (from the borrowing e implementation of World development programs financing the countries) rose from about 20% at the ank-financed projects. Earlier needs of LDCs far exceed World end of FY79 and 37% in FY80 to 47% ngstanding investment activities in Bank possibilities, the Bank is of all disbursed funds in FY84. e construction of basic adjusting itself to these needs; the frastructure facilities, the Bank is introducing new methods and orld-wide professional training of ways of financing and intends to stitutions and experts, its successfully carry out its role in ·onomical operations and the  Th e Dam Radenic at Kosovo Province in . Kosovo Pro vin ce ccording to World Bank data for 77 - FY82 period in international ddings invited for projects financed the World Bank Yugoslav firms on 37 contracts abroad totalling $ ' 0.1 million. The values of contracts arded per fiscal year (the number contracts is given in brackets) were ,: rollowi ng : 7 $ 8.9 million (6) 78 $ 31 .7 million (5) 79 $ 25 . 1 million (7) 80 $ 56.6 million (6) 81 $ 8.8 million (6) 82 $ 29.0 million (7) $ 160. 1 million (37) lte contracts won were distributed among gions as follows (the number of r tracts is given in brackets): t in milli o n $ as te rn Africa t thi o pi a, Ke nya, Ta nza ni a) 28.9 (7) 9.2 (5) As ia a nd th e Pacifi c 0. 0 (0) 0 .9(6) e rn Afri ca and Iraq , r a nd Middl e East lge ri a, Egypt , Iraq , DR o f Ye me n , rus, Syri a, Sud a n , Tuni sia, ) 11 7.2( 15) 3.9 (4) 160 .1 (37)  Ancient part of the City of Sarajevo Required Reconstruction of the Sewage System which required Sizeable Investments. To Regulate Land Reclaming System at Kosovo Province a Tunnel was Built. The structure of contracts won (in terms of value) was the followin~: Less than 1.0 milion $ 7 co ntracts. Less th an 1-7 milions $ 2 contracts. The distribution of contracts won, per sub-sectors, was the following: million $ E lectrica l equipme nt 2.822 (3) Mechanical eq uipme nt 0.468 (2) Co ns ultin g services 1.011 (2) Co nstruct io n works 6.341 (1) FY83 , in international bildings Out of this total figure World Bank Co nstruct io n materia l 0.255 (1) for World Bank-financed projects financed contracts worth $ 9.0 her LDCs Yugoslav firms won the million, while IDA financed lowing contracts: constracts totalling $ 1.897 million. Compared with FY82, in FY83 Yugoslav firms won more contracts (2 Co ntract Type of va lue in Contracts were won in the following contracts more), but their value was $ contract mil. of$ regions (the number of contracts 18.1 million lower. is given in brackets): Co nsu lting se rvices 0.871 As in the preceding six years, in milli o n $ 198~ Yugoslav firms won the largest Co nstruct ion works 6.34 1 number of contracts in the North Northern Africa a nd Near E lect rica l eq uipm ent 0.750 a nd Middle East African and Near and Middle East (Leba no n , Morocco , Tunisia, countries - 37% and in those of East 0.315 Turkey, Egypt , AR of Yemen 3.998 (6) Africa - 58% out of the total number of contracts. Mechanical eq uipme nt 0.243 Latin America (Braz il , Co lo mbi a) 0.558 (2) Electrical al equipm e nt export contracts Mecha ni ca l equipme nt 0.225 were by far the largest in number - 3 Easte rn Africa ( Ke nya) 6.341 ( I ) Construct io n works 0.225 contracts, followed by exports of Total: 10.897 (9) mechanical equipment - 2 contracts E lectrica l eq uipm e nt 1.757 and by consulting services - 2 contracts. Major contracts won in FY83 were: Co nsu lting serv ice 0.140 0 Kenya - construction works valued at 10 ,897.00 $ 6.341 million (,Put" of Sarajevo), 0 Egypt - export of electrical equipment valued at $ 1.757 million (,Iskra" of Ljubljana).  Product from Textile Combine Gnjilane Exported to Numerous Countries. The Combine Used the Loans Extended by the World Bank. Yugoslavia is Exporter of Shoewear. The Factory KOSUTA- Cetinje, Montenegro is One of Big Manufacturers alia, a commitment on the part of Yugoslavia to have the YBIEC trained in terms of organization building, and in its personnel and institutional aspects in order to proffer information on markets of investment goods and services (marketing). To this end, a Program of Activities was worked out, while a project for a General und Up-to-Date Information System, needed for exports of capital goods and services, whose implementation should start in early 1985, is at present being worked out. As part of the Structural Adjustment Loan (SAL I) is disbursed by Yugoslav exporters through the YBIEC (for the needs of importing parts and components for the preparation of products are financed by the YBIEC), the above-mentioned institutional training of the Bank is directly linked to further promotion of the export deals it supports and thus to the utilization of new similar World Bank loans in supporting exports of Yugoslav capital goods. World Bank development project financing in cooperation with other creditors Inter-American Development Bank, African Development Bank, Asian Development Bank, the OPEC Fund, .xperience indicates that many more successful relationship with the banks and funds for OPEC ctivities have to be performed prior World Bank and to the access of development, other similar defining sources of financing and Yugoslav organizations to the projects institutions for public financing, bmitting tenders at internationally it finances. Such general and private banks, export financing banks vited biddings. Technically, specialized seminars should continue is known as co-financing. It has dministratively and financially, in future as well. become very important in engaging rocedures relating to World additional sources of funds, in ank-monitored projects are very In view of the existing possibilities increasing capital flows to LDCs and rict and precise. Therefore, one and export orientation of the in the better utilization of generally hould be thoroughly acquainted with Yugoslav economy, and the World available sources of funds and em and fully respect them at all Bank's own assessment that expanded assistance for development. The tages. Seminars organized by the exports are essential for Yugoslavia's World Bank's role in co-financing B I EC with the object of further development (i.e. proceeds differs and depends on such factors ·ansmitting information on these from exports), a Program of Measures as: the wishes of its beneficiaries and rocedures and other activities in this and Activities envisaged by the World the possibilities and experience of espect contribute to a better and Bank Structural Adjustment Loan other creditors and types of Agreement (SAL I) laid down, inter co-financing sources. That role may Detail Shows Tough Building Conditions from the Sites of One Hydro Power Plant at the River Neretva in Hercegovina Thus, on the basis of interest manifested by Yugoslav firms in the Kiambere hydropower project construction in Kenya, the YBI EC entered into co-financing of part of the project relating to a large earth dam. As the most advantageous bidder among those offering tenders for this dam in 1983, ,Energoprojekt" was awarded the contract, worth more than $80 million, while upon the Investor's request, the YBIEC undertook to finance part of the Yugoslav equipment and services procured for the dam. The World Bank, as prime financier, provided $37.1 million for this part of the project, the African Development Bank $21.7, the Saudi Development Fund $11.5 and the YBIEC $11.4 million. Cooperation between the YBIEC, the World Bank and other co-financiers in the Kiambere hydropower project is the first example of this type of cooperation for the Yugoslav Bank for International Economic Cooperation. Successful implementation of this project is expected to give good references for cooperation in other projects of interest to Yugoslav firms and activities by the YBIEC aimed at further improvement and expansion of initiated cooperation to other projects are already underway. The YBIEC assesses that realistic conditions and needs exist for a major involvement in co-financing arrangements with the World Bank and other international financial organizations. In this sense, its export credits might support exports of Yugoslav equipment and the execution of complete works and facilities in LDCs and thus facilitate their involvement in developing long-term cooperation in sectors of mutual interest. The main attitude is that participation in co-financing arrangements and links between the Bank and multilateral sources of financing, respectively, ensure a higher degree of safety and more efficient access to contracts whose general financing is too big a bite for the YBIEC's limited funds. The Yugoslav Bank for International Economic Coop'eration is basically interested in those co-financing arrangements which make possible links between participation in financing and the exp?rt of Yugoslav goods and services. For the YBIEC's participation in parallel financing the existing  THE INTERNATIONAL FI NANCE C~RPORATION AND YUGOSLAVIA 'he International Finance (I I) helps bring together investment Traditional sources of Corporation orporation belongs to the World opportunities and domestic and financing have been subscriptions to ank Group. This affiliation is foreign investment capital and authorized capital by eflected in common goals: helping to managerial skill; member-countries and borrowings timulate economic development and from the World Bank. Although IFC aise the standard of living by (I I I) promotes and creates conditions may borrow on the international roviding funds from the developed favouring domestic and foreign capital markets under its Articles of the developing countries; the same capital flows to productive enterprises Agreement, it was in 1984 that the embership; an identical approach to in member countries (Article I of Corporation was allowed to borrow roblems of economic development Articles of Agreement). ,experimentally" on international developing member-countries and capital markets "up to a maximum of heir solution; similar principles and At the beginning, the Corporation's 100 million dollars", provided, echanisms in project financing; membership was 21 and authorized however, that the terms and !most the same organization and capital one hundred million dollars; conditions match those of the World anagement characteristics (voting at the end of fiscal 1984 (June 30, Bank. Further sources of IFC funding ower of member countries in 1984) it was 125 and share capital 650 are the income from interest charged ecision-making being proportionate million dollars, of which 544.2 million on previous !endings and dividends o the share capital they hold); almost paidin. In response to the successful on shares. tlentical methods and criteria of operations and requirements of roject identification and commercial, recipient member-countries it was In view of the intensity and scope of inancial and technical appraisal and agreed by all (developed and financial cooperation between IFC egotiations on external financial developing countnes) to double and Yugoslavia (20 enterprises were upport. Membership of the World authorized I FC capital to I ,300 financed with over 421 million lank is a pre-condition for I FC million dollars. dollars) a positive evolution should embership. be noted in the IFC's interpretation The plan of future expansion of the of the meaning of ,private he Corporation was established in Corporation is built on IFC's strong enterprise", ,private ownership", 956, as a World Bank affiliate, performance during previous years: ,private sector" and the like in edicated to furthering economic on June 30, 1984 the total capital Yugoslav terms. The fact that IFC levelopment in its developing invested in the developing countries does not identify the Yugoslav ember-countries by promoting and amounted to 3.2 billion dollars, of organization of associated labour with upporting private productive which I ,989 million on its own ,public" or ,state" or ,shareholding" nterprises, particularly those located account and I ,254 million dollars forms of ownership is of great n the less developed regions of a held and administered for significance for Yugoslavia, in ountry. Seeking to accomplish this, participants in IFC financings political and socio-economic terms. he Corporation: (commercial banks and other The Corporation accepted that financial institutions). ,enterprises in Yugoslavia are socially ) financially assists together with owned, that is belong to the people of rivate investors, in establishing, In pursuing its aims IFC relies on its Yugoslavia, not the state". nodernizing and expanding private own funds and expertise as well as nterprises which aid development in those from other sources, primarily IFC does not insist on its finance ember-countries, but without commercial and helps establish d i being spent in specific countries . rovernment guarantees, whenever r e c t business contacts between However, procurement of goods and rivate capital cannot be obtained in private enterprise in services has to be made in one of the ufficient amounts or under member-countries and private 146 member-countries of the ·ommercially acceptable and justified domestic and foreign financial International Bank for Reconstruction sources or i n d i r e c t by acting on and Development, and Switzerland. its own behalf but for the account of The approach to and flexibility of the others. forms the finance can take (,the Corporation may invest in the way it considers appropriate under the otel Complex BABIN KUK- ubrovnik. Widely Known Touristic entre For Most Choosy Guests From vu'"""'"'' the World The rescheduling practice has evolved in the last few years since the debt crisis hit a large number of countries. In consequence, however, IFC had to expand its loss coverage fund. In the - course of its thirty-year operations I FC has had some losses, but it nevertheless ended each year with a profit. To recall the Articles of Agreement - no member-country is liable for the IFC obligations by virtue of its membership. Cooperation of Yugoslavia with the Corporation Since IFC is an inter-governmental organization, Yugoslavia as one of its member-countries, is obliged to subscribe to IFC's equity, expansion and diversification of its activities. Since it joined IFC in 1968, Yugoslavia has committed 591 thousand dollars to IFC's authorized capital. Together with other member-countries, Yugoslavia accepted the capital increase of 1978 and committed another 2,879 thousand dollars. Both commitments were honoured. It is Yugoslavia's intention in spite of its serious economic and balance of payment difficulties, to participate in the latest increase of IFC capital in the 1985- 1989 period. To maintain the present level of its shares (0.53 %) Yugoslavia would have to pay in somewhat above 3.4 million dollars in the next five years, in equal instalments of 687 thousand dollars each. The first instalment is due on August I, 1985. Each instalment brings in turn a corresponding number of I ,000 dollar shares. This means a corresponding number of votes, i. e, influence on the IFC management. The voting power of Yugoslavia as of June 30, 1984 was 3,129 votes or 0.54% of the total.  The World Bank and Federation Fund Invested Sizeable Funds in th e Undeveloped Republic of Montenegro for a Number of Industrial Facilities. Detail from Packing Facility of Quality Marble for Shipment to Foreign Customers First phase of building the railway bridge Mala Rijeka at the railway line Beograd - Bar. At the end of 1974, project implementation was transferred to Yugoslavia. The president of the Corporation is a foreigner and the executive vice-president a Yugoslav. Under the IICY Articles of Agreement no single bank or group of banks may hold a major interest in its capital. IFC is the biggest individal shareholder with 12% of the shares, 12 Yugoslav banks hold 28.8% and 42 foreign banks from II countries (Austria, France, the Netherlands, Italy, Japan, Kuwait, the USA and FR of Germany, Switzerland, Sweden, Great Britain) have a total of 59.2% of the shares. IICY was established to promote joint ventures between domestic organizations of associated labour and foreign firms. Its objective is to assist local organizations (legally, commercially, financially and technically, with a view to selecting the best partner), to invest its own funds in the form of contribution, assist foreign partners in consulting Yugoslav regulations and other conditions in the country. At the end of 1974 IICY established a marketing service. helped finance 20 work !ICY was established in December anizations in the 1970- 1984 1969, with the consent of the Federal riod. Altogether 28 loans were Executive Council and in agreement luded, two per year on average. with the Yugoslav banks concerned, work organizations had two, IFC and a number of foreign banks . ers three loans in a row. IICY has 55 shareholders and is e International Investment registered as an international stock rporation for Yugoslavia (IICY) company in Luxembourg with 13.5 I FC's first investment in million dollars of share capital. Its goslavia. official seat is in Luxembourg, but it operates from its head office in Vienna (until recently in London) and a representative office in Yugoslavia .  Automatic block installation manufactured by ISKRA, Ljubljana. A prewired and_ bench tested cabin is crane-lowered into Its foundation . fiscal 1970, TAM and ockner- Humboldt-Bentz A. G. of e German Federal Republic ncluded joint venture aimed at the pansion and modernization of M's production of light and edium-sized trucks and buses from "00 to 13,000 units and production a new type of diesel engine. The tal estimated cost of the project was out 120 million dollars, of which 80 !lions was invested in plants and uipment and about 40 million in rking capital. 1980, SAVA- SEMPERIT mpleted the Phase II expansion oject (from 24,500 to 36,300 tons of dial automotive tyres a year). IFC lped finance another increase in oductive capacity with 11 million liars. 1973, BELISCE undertook, with C assistance, a joint venture volving a group of West German d Austrian companies. The vestment went into the expansion of per output from 38,000 to 95,000 ns and container board and ntainers from 30,000 to 60,000 tons year. -C granted an 11.1 million dollar an in the course of 1973 . 1980 the second stage of Zelezara Jesenice, Yugoslavia's RM~ Zenica is Yugoslavia's largest panding and modernizing paper second-largest steel producer, steel producer. In 1976. IFC invested cardboard production was embarked on joint venture for a 50 million dollars. Thanks to this loan rtaken. IFC invested 80 million special steel cold-rolling mill with and capital from other foreign and ARMCO and other suppliers from local sources, Zenica expanded its the USA. IFC granted a I 0 otuput of crude steel by 1.4 million million-dollar loan in 1974. tons and its rolling mill capacity of 1.1 million tons for manufacturing Tvornica ANHOVO, an important various profiles and forms. cement producer in Yugoslavia, received an IFC loan of I 0 million dollars for the construction of a new facility of 850,000 tons capacity a year in 197 4. nd Reclamation System !bar - Lepenac Kosovo Province, surface 73.000 ha - ilding of the Dam Gazivoda, Height om 1illion dollars and I 0 million OM 300,000 dollars . These ceilings were The Institute recorded good results in ndicated among foreign commercial intended to safeguard the purpose of the treatment of all types of anks. the loan-small-scale enterprises. rheumatic (particularly, arthritic) pulmonary and cardiovascular ~ nder the loan agreement each bank On the whole, these investments have patients . ommitted I / 8 of the credit line or been very useful. About 200 ,250 thousand dollars and I ,250 sub-projects were implemented and Thus, another building was ousand Deutsch marks . Eighty per number of new jobs created . constructed with 814 patient beds, ent of the line was allocated to the Numerous bottlenecks were mainly for foreigners (80%). ocial sector and 20% to the private . eliminated. Exports went and n the social sector, eligibility of sometimes import substitution rganizations of associated labour achieved. Project preparation for the , Dr Sima as tied to their number of Milosevic" Institute of Physical mployees, 125 at most. The Medicine and Rehabilitation started 1aximum amount per recipient was in 1980, resulting in a loan agreement concluded in 1981.  INTERNATI~NAL DEVELOPMENT ASSOCIATION (IDA) ugoslavia joined the International The very low-income countries, The IDA's Articles of Agreement evelopment Association in 1962 and characterized by excessive population made it legally and financially aid its initial subsription. According growth, a low capital-generation rate, distinct from IBRD. Only the IDA's categories of membership, and suffering from the consequences members of IBRD can join IDA. The ugoslavia was not obliged to make of colonial rule, were badly in need President of the Bank is IDA's pplementary contributions in of external aid to finance large President and at the same time bsequent replenishments of IDA investment projects so as to increase presides over the Board of Executive nds. Namely, Yugoslavia, being a their output and per capita income. Directors. In the same way Governors eveloping country, was classified as What they needed was another and Executive Directors of the Bank Part I I member. The money was to permanent source of external serve as IDA's Governors and e provided entirely by IDA's Part I development funds. Executive Directors, provided the 1ember countries (developed). countres they represent in the Bank It was evident from the beginning of are the members of the Association. evertheless, Yugoslavia decided, in I BRD'a operations that the terms and Therefore, IDA has no staff of its onformity with its long-term policy conditions of their loans (interest own, but draws upon the Bank for f fostering comprehensive economic rates slightly below commercial ones, administrative and other services. operation with the developing relatively short repayment periods, This is both rational and practical. untries and assisting them, within finance for imported equipment and possibilities, to participate technology only) did not take into The IDA's Charter provided for two untarily in the third replenishment account the problems of developing categories of membership: Part I f IDA's fund in 1969. countries that had to finance projects which includes economically with a low, slow or non-existent rate developed countries and Part II this way Yugoslavia manifested its of direct self-repayment. Many which is composed of the developing port of IDA aims and its countries, particularly the countries. These two groups of darity with the least developed newly-liberated ones, were in urgent countries pay different subscriptions. ng the developing countries. The need of an infrastructure, not only Each Part I member pays its full ugoslav example was followed later roads and ports, but numerous health, subscription in convertible currencies y other developing countries, so that education and housing facilities. that can be applied towards financing number of Part II members Private capital could not be attracted procurements under IDA credits to rticipating in the seventh to such projects while IBRD could developing countries. Subscriptions lenishment in 1984 rose to ten . not fit them into standard eligibility and contributions provided by Part II e importance of the Yugoslav criteria. Moreover, many member countries are paid in the ecision of 1969, which triggered newly-liberated countries were not member's own currency and only I 0 roader support by the developing creditworthy, and automatically percent in convertible funds. The untries of IDA's programmes, non-eligible . other 90 percent, paid to IDA's xceeds its nominal value at the time. account, can be used for lending It is clear that the poor developing (with the consent of the contributor) ugoslavia participated in all countries, and there were many, to other developing countries. bsequent replenishments as follows: needed a source of concessional contributed 4 million dollars in the funds such as grants, soft loans and The initial subscription by Part I ird replenishment, 5 million in the: credits, repayable over several member-countries amounted to about rth, 8 million in the fifth and 16 decades, with a grace period of I 0 74 percent of all IDA funds. On the illion dollars in the seventh years, with low or no interest rate, other hand, 89 Part I I member lenishment. which could be applied not only countries subscribed the other 26 towards costs of procurement of percent of the total. equipment but local costs, too. A decade passed before the idea was materialized, however partially and in principle, in the establishment of IDA.  Dam at the River Neretva, Vicinity of , Herzegovina . The Electric Current by the Hydro Power Plant ·n tnvn.,nr will be Used by the Factory of "''"'"'"·" " of Mostar To Crash Rocky Mountains Powerful Machinery is Required. Hilly Regions of Herzegovina A ssisted by the Dams at the River Neretva Are Becomming Fertile Land For Growing Early Fruit and Vegetable. · The Yugoslavs have a highly developed sense of solidarity and foster bilateral and multilateral economic cooperation among the non-aligned and developing countries, and full awarness of the concrete economic interest of Yugoslavia, being one of more advanced developing countries in this field of cooperation. Whenever the contributions of IDA donor countries are written about or spoken of, there is hardly any mention of the benefits they themselves have. This is a sort of , taboo" topics in some countries, and not by chance. Therefore it seems appropriate to give a brief explanation. According to IDA Articles of Agreement, member - countries (as well as non-member countries participating in replenishments, such as Switzerland) are entitled to bid at international tenders for projects financed by IDA. Since the awarded contractor is paid in cash, these tenders are quite attractive, competition harsh, particularly among firms from the industrially advanced countries . The contracts usually involve supplies of equipment, technology and various technical and expert services (studies, designing, consulting, supervision, project management, training of local staff and the like) and are obviously beneficial to the economy of the supplier country, as a whole. rude Oil Processing Equipment and acility at Omisalj - S. R. Croatia ugoslav contractors earned I 00 enhanced economic cooperation with TOTAL IDA FUNDS illion dollars in the 1962-June 1979 the developing countries, it is eriod, participating in the execution significant. Thus, Yugoslav (in US$ million) f IDA-financed projects in the organizations of associated labour Original In 1981 eveloping countries. In the following have a major task in the years to amount dollars ve years, 1980- 1984, however, the come, to intensify their activities and f.!Ount was only 16.4 million dollars. secure more deals, if competitive, Initial his is not much, but in view of the solidary and technically and subscriptions 757 3,128 . . levance of exports to our commercially superior. abilization programme and Repleni shments: The first replenish.ment rEN-YEAR SURVEY OF IDA OPERATIONS ( 1965- 68) 745 2,844 975-1984 iscal Years The second In US$ millions replenishment ( 1969-7 1) 1,271 3,466 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 redits committed I ,576 I ,655 I ,308 2,313 3,022 3,838 3,482 2,686 3,341 3,575 The third replenishment redits di sbursed I ,026 I ,252 I ,298 I ,062 I ,222 I ,411 I ,878 2,067 2,596 2,524 (1972- 74) 2,441 4,495 umber of new credits 68 73 67 99 105 103 106 97 107 106 The fourth repleni shment ~ umber of countries ( 1978- 80) 7,732 8,688 r nefiting credits 39 39 36 42 43 40 40 42 44 43 The sixth otal number of IDA replenishment ember co untries 114 116 117 120 121 121 125 130 131 131 * (1981 - 83) 12,000 11,204 Two app li ca ti o ns for members hip (Mozambique a nd Port uga l) a re being processed . TOTAL : 29.,447 ' 40.,025  NEW ACTIVITIES OF THE W~RLD BANK he Place and Role of the It is true that the governments of their balance of payments position, 1ternational Bank for almost all countries in the world are can attract an additional inflow of faced with a debt problem . private capital (even from econstruction and Developing and socialist countries over-indebted developing countries!), evelopment in Economic have an external debt problem, while which again is not the case with the ecovery and Settlement of the some industrially advanced countries developing nations. ternational Debt Problem (smaller, as a rule) have huge domestic debts . However, it is of vital It is worth recalling here the address 1e problem of the indebtedness of importance to any country because of of the late President Tito at the e developing countries is one of the the economic, social and political Annual Meeting of the World Bank jor economic concerns of our time. dimensions of a debt (a) whether it is and IMF, held in October 1979, in though only the developing external of internal, and (b) whether Belgrade . In his remarkable speech, untries are indebted, this affects the the debtor is economically developed the late President warned those dustrially advanced nations, too , and its currency freely convertible, or attending and world public opinion cause of their claim s as creditors a developing country with a of the serious problem that was going d broadder economic non-convertible currency, suffering to face the world: interdependence of development"), from basic economic problems and a cial and political implications . low standard of living. These facts are , It is clear that there can be no stable (sides, the stability of the highly relevant, firstly because and just peace or global progress ternational capital markets, servicing a domestic debt means the without the solution of basic rticularly their leading segment, is transfer of income from one group of economic problems affecting the ectly linked to and dependent on people to another, while servicing an interests of many countries. The e resolution of the debt crisis. external debt reduces the total real inequitable international economic debtedness if definitely a long-term income of a country; secondly, the relations prevailing today are an oblem. The crisis broke out in 1982 terms an'd conditions of paying off ever-increasing source of crises and d we do not know yet whether it is debts are determined by entities conflicts." ttoming out or not. In this context, outside the legal and economic e role of international financial sovereignty of the debtor country, led , The present crisis in the world titutions, and of the World Bank, primarily by their own interest, which economy stems from wide differences, unavoidable in the present is not always purely economic, which are primarily due to the ernational economic and financial particularly not when the creditor is a existing system of international ·tern and irreplacea ble for some government agency, not a commercial economic relations because the btor countries. It is even more lending institution; thirdly, the system so adversely affecting the mificant in view of the fact that developed countries have permanent developing countries, holding vast ~ce 1982 the outright default of the access to fresh money on the human and natural resources on the jor debtor countries has become domestic and foreign financial margin of economic trends, possible for economic, political or markets , so that they can maintain the unavoidably creates global difficulties cia! reasons. pace of their investments, production, in the world economy, including the exports and debt servicing; this is not developing countries .. . No one can the case with the developing countries assure his own welfare without global which, due to insufficient domestic progress and prosperity for the whole capital generation and a lack of international community. In short, the domestic financial markets , have to responsibility we have for the present borrow abroad , where they have and future world, whose fate we all almost no access at present; finally, share, must not be overlooked." thanks to the convertibility of their currencies and the role they play in international payment transactions, the developed countries, by their monetary policies and high interest rates (domestic) and irrespective of 1ese adjustments and innovations in secondly, apart from the need for Experience shows that the World e operations of the World Bank national adjustment (first and Bank is rather flexible in its re reflected in the conditions and foremost in the manufacturing sector operations, within its statutory and nge of cooperation . with Yugoslavia, which should be geared to higher managerial limits, of course. This is o. Moreover, Yugoslavia is a exports, international competitiveness manifested in a number of spheres : ember drawing on almost all and greater mobility of savings) the the Bank is no longer limited to its cilities of the World Bank. The international business environment is traditional project lending, but ults, thus far, are good, but there of crucial relevance for: (a) trade increasingly oriented to balance of e still untapped opportunities. The flows from the developing countries payments support and analytical and tent of future cooperation will and (b) flows of external financial advisory services. In spite of the pend on both sides. It should be support to those countries; principle and practice of ceilings on membered, though, that the Bank some types of financial assistance s been one of the major sources of thirdly, economic problems relating to (member countries cannot be granted ng-term finance of the Yugoslav the current and long-term more than I 0% of the total annual anomy and will continue to be so development of each member country )endings of the Bank, nor of the total the years to come. are different and quite specific; annual )endings of the Bank, for structural adjustment purposes, and a r many developing countries, fourthly, present balance of payments structural adjustment loan to any eluding Yugoslavia, economic problems in the developing countries, country cannot exceed one third of velopment up to the end of the specifically the difficulties total annual !endings to that country, ntury is of vital and long-term encountered in their external debt etc.), the Bank makes exceptions, tportance. It will largely depend on servicing, being of a long-term and adapting its support to the concrete sumption of the balance of structural nature, call for solutions needs and specificities of each tyments equilibrium in the years to which will take some time to yield member. The Bank encourages faster me and the establishment of results. disbursement of loans by increasing gular forms of financial cooperation the share of the direct foreign ith foreign countries (international Practical ways and means of exchange component and introducing ancial markets). A feasible solution implementing those assumptions do instruments for quicker disbursement, clearly in the interest of the World not depend on the World Bank alone and allows application of th-e loan nk, because of its considerable whose principles of operation, proceed to local costs under certain posure in the developing countries organization and management were conditions, etc. These activities were td its maintenance of stability in the determined by the developed stepped up following the adoption of isting international economic and countries forty years ago, at a time of the Special Action Programme. ancial order. In this context, the completely different international orld Bank is seeking ways to economic, financial, political and The Special Action Programme was valve itself in broader support of social conditions. Although the World approved in 1983, and its aims are e overindebted developing Bank, like the International Monetary basically as follows: untries, proceeding from the Fund, is a Bretton Wood's instituion, II owing assumptions: altghough the two therefore operate a) faster disbursement of the Bank's almost along the same lines, adjusted loans, for both on-going and new rstly, the future of a country's of course to specific aims and tasks, it projects. Export-oriented projects are ·anomie development lies in its own is beyond doubt that cooperation favoured, if their completion and nds, and is primarily that country's between the World Bank and almost commissioning can warrant an sponsibility; all the developing countries has been improvement in the country's balance far less controversial. of payments position; projects conceived along new lines of economic development, approved for the sake of surmouting existing economic difficulties, and action directed towards the elimination of bottle-necks in the final stage of project implementation;  doing this the Bank has Since the programme of structural However, the borrowing country is proached the role of the adjustment is jointly established with the one which finally decides on the ternational Monetary Fund, which the Bank and since it coordinates its terms of the structural adjustment legal terms, is not strictly in line work with the International Monetary and the programme of economic ith its traditional aims. Nevertheless, Fund, one might think that countries adjustment and their justifiability and the time of establishment of the are reluctant to accept the feasibility. In principle, however, the orld Bank it was laid down in ,conditionality" of the World Bank, main objection may be the rticle I (iii) of its Article of which often does not differ much multiplicity of criteria and timing of greement that the Bank ,shall from that of IMF. Different their performance, as determined in ·ornate the long-range balanced approaches by the two institutions are the Letter on Development Policy. owth of international trade and the unavoidable in some formulations. Economic development targets, aintenance of equilibrium in That assumption could be reinforced jointly established with the World lances of payments by encouraging if we remember the customarily low Bank may be achieved, as a rule, ternational investment..." . nominal amounts of structural given the most favourable ·oceeding from this and the practice adjustment loans (ranging from international economic circumstances · the World Bank in approving between 200 and 300 million dollars). and national austerity, within five to ructural adjustment loans based on As a rule, the World Bank puts seven years, at best; however the programme which aims at: (a) more limitations on those loans, about one Setter on Development Policy usually fective mobilization and utilization third of the total regular lending to sets this period at only two or three domestic and external financial the member country. There are two years! sources, (b) increased productivity, points, however. The first is that a ionality and international developing country opting for a The mechanism, or collaterals for mpetitiveness, (c) higher exports in structural adjustment loan is already performance of criteria is the der to bring the balanace of faced with balance of payments and disbursement of proceeds in tranches tyments and trade flows into serious external debt servicing (usually two) and a commitment by 1uilibrium and the establishment of problems, as a rule. Coupled with the the Bank to approve further eady economic growth, the rationale lack of external liquid resources and (maximum five) consecutive structural · the World Bank in authorizing almost no access to international adjustment loans. There are, however, ese loans in the World's changing financial markets, their chances of some unavoidable contradictions. One anomie and financial circumstances borrowing on relatively reasonable of the main characteristics of kes into account not only the terms, as are those of the World structural adjustment loans should be praisal (commercial and financial) Bank, are minimal. On the other the quick disbursement of loan a given investment project and hand, the World Bank ties up all of proceeds. On the other hand, this can edit worthiness of a debtor - its project and programme lending, in be done in tranches, released only untry, but the global economic and the process of negotiation or pending after the agreed policy has been stitutional framework in which the loan approval, with the outcome of implemented, including quite a oject is to be implemented. structural adjustment loan number of significant measures, negotiations, that is, the adopiton of a which as a rule, dramatically change certain policy in key sectors the conditions of economic activity as (investment, foreign exchange, the a whole. Based on earlier experience, credit-monetary sphere, prices). This it may be said that the World Bank is simultaneously negotiated with the has become aware of these IMF and other official and private shortcomings and therefore adopted a creditors of the country concerned. rather flexible approach to the appraisal of criteria and timing of performance of some obligations. arted authorizing others, but jointly Although previous experience with Parallel with the growing number of ·th other, mainly private sources . the new forms of co-financing "B" over-indebted countries and their ever e additional loan was designated loans is relatively modest, two things shrinking opportunities of access to a "B" loan and could be in one of may be noted: first, preparation and the capital markets, the pressure on e following three forms: (i) direct conclusion of a " B" loan is extremely World Bank lending increased. In the rticipation with additional fund s slow, procedure is quite complicated absence of greater contributions by om commercial sources; (ii) and loses of effectiveness ; second, in the developed member countries (the 1arantee of repayment of a the course of negotiations the World traditional source of the Bank's ndicated loan over an extended Bank appears in the capacity of a funding) it had to rely increasingly on ~ riod and (iii) commitment of funds . commercial bank not a factor of borrowings from the international cohesion and mediation between the financial markets. This trend was irect participation of the World commercial banks and the borrower, favoured, on the one hand, by the ank in a "B" loan is possible under as it should be in view of its aims and high liquidity of the international e same financial term s governing knowledge of the economic and financial markets, and on the other, mmercial credits, or at the interest financial status and legal position of by higher risks involved in the direct te charged by the Bank on its a debtor country. lending of international private gual "A" loans (fixed at six-month capital to developing countries, tervals to equal the cost of the because of their mounting debt. As a ank's borrowing). In such a case the World Bank and Debt result, the World Bank has become rrency of denomination , valuation one of the major lenders to assets, computation of repayment , Rescheduling developing countries and at the same bmission of calculation at time one of the largest borrowers on aturities through the agent bank The Articles of Agreement and the the international financial markets . ~d the similar, are the same as for rules of the Bank did not explicitly gular Bank loans. The Bank accepts stipulate the matter of debt Legally, the World Bank could participate in a " B" loan, as a rescheduling or any reschedule its claims against member atter of principle, with any similar- mehanism for alleviating the countries, as evidenced by two cases mvertible currency (at the moment, debt burden of a member country. In to date going back to the Sixties, and ost frequently the US Dollar), at the its operations so far, the World Bank by the practice of the International terest rate prevailing on the capital was involved in only two Finance Corporation, its affiliate. arkets for loans extended in the rescheduling exercises in the Sixties, This possibility therefore should not me currency. at a time when the volume of credit be ruled out in future, although its financing of member countries was feasibility and conditions are quite e decision on the World Bank's considerably lower than today and uncertain. rticipation in co-financing in a "B" when the Bank itself borrowed much pe loan is taken in agreement less on the international capital The present official standpoint and tween the Bank and the recipient markets. Finally, at that time member practice of the World Bank are not to untry. It is a joint decision about countries formally requested include outstanding claims in the e market to be approached for the rescheduling in exceptional cases programme of alleviation of the debt )-financing partners and about only, and in so far as the public debt burden of its debtors, either by a urces (banks and other financial was concerned. Meanwhile, however, moratorium, rescheduling or the like. stitutions) to be tapped. the operations of the Bank greatly expanded and the number of developing countries encountering balance of payments problems grew all the time. In the Eighties, and particularly since the outbreak of the international debt crisis ( 1982), the number of countries seeking rescheduling of their external debts has been steadily rising as have the amounts involved in the exercise.  inful adjustment to the new World Bank loans to Yugoslavia, This cooperation flourished in the ndition s and criteria preva iling on which helped finance priority early Eighties, when a number of e international economic and projects, were highly relevant for the developing countries attempted to ancial markets . economic development of the country resolve their structural problems more up to 1983. At the end of 1982, the decisively by overcoming existing p to the Eighties Yugoslavia had share of World Bank loans in total already deep-rooted current account ·en borrowing almost three-fourths Yugoslav external indebtedness was difficulties, i.e. when the World Bank its total convertible funds from about I 0.5 %. Since 1983, however, the introduced structural adjustment mmercial sources. The major World Bank has been actively loans. Since then, almost no rtion was in the form of export involved in multilateral activity on distinction can be drawn between the pplier's) credits. To achieve its the part of governments, commercial Bank's operations aimed at ·onomic revival targets and steady banks and the International Monetary development and those aimed at ~velopment, Yugoslavia will need Fund, aimed at redressing current redressing balance of payments rge amounts of external commodity account deficits and tackling the debt deficits. In view of the numerous td financial credits in future. problem. Confident of the structural objections raised by the developed character of economic problems in and some developing countries to that stained viability of external Yugoslavia, the World Bank extended effect, a question of principle arises: uidity is still being sought by additional long - term financial is it possible and if so, to what extent, ocessing steadily towards support to Yugoslavia, besides regular to draft and implement a viable If-reliance in full cooperation with loans, assisted it in formulating sound economic recovery and structural I commercial and financial partners economic development programme, adjustment programme for a country overnments, commercial banks and postponed discussion on the without taking into account its ternational financial institutions) graduation programme and helped macro-economic backgroung; in other eluding the International Bank for Yugoslavia raise new credits on words , is a balance of payments econtruction and Development, our capital markets and from commercial equilibrium possible in the long term ngstanding and successful associate. sources. without a corresponding development he results achieved in the course of programme. Moreover, it is known 83 and 1984 proved that this Cooperation between the World Bank that International Monetary Fund operation in the joint search for and the International Monetary Fund programmes are short-term in lutions to external liquidity has come to the fore during the principle and mainly concerned with oblems has been most fruitful and international debt crisis. Yugoslavia, urgent and short-term actions, while line with Yugoslavia's internal being a member country of both those of the Bank are medium-term stem and long-term economic institutions is also concerned. and gradually implemented over long terests i.e. in line with the Informal cooperation between the periods of time. The performance of ientation laid down in our Bank and the Fund has been going certain criteria, laid down in the IMF ong-Term Economic Stabilization on since their establishment, but was programme, may be decisive for the rogramme concerning the country's formalized in 1966. It began with an Bank's programming of development ·ternal liquidity. Normally, this exchange of information and in the long run, and vice versa. >operation has not always been documents and expanded to include Basically, a programme aimed at nooth but the difficulties have never coordination of technical assistance improving the external current illanated from the main options and and assignment of joint missions and account position, which is usually rgets of Yugoslavia 's social and as of late, to a concerted effort to lay insisted upon by the International ,onomic development. down conditions by which member Monetary Fund, permit sor at least countries can be assisted financially. should be aimed at permitting - the 1 any case, thanks to successful establishment of a macro-economic operation with the World Bank, climate favouring the implementation ong others, and unlike some other of the World Bank programme of eveloping countries, Yugoslavia has long-range structural changes. Thus, anaged to meet its external there is no doubt about the ligations, never questioning further complementary efforts by the two operation with the international institutions and the desirability of ancial community. coordinating practical action in member countries so as to avoid  nee bilateral assistance is largely conservative; it is a channel for First, member countries of the World otivated by political , military and exports of equipment and services Bank and of the International eological interests, economic from the developed nations. Monetary Fund are suffering from !nefits for the US economy and for serious external current account her donors, it can be far less problems and consequently debt fective than that in goods and Non-project lending permits larger repayment at maturities. Therefore, rvices procured and financed by portions of proceeds to be used for irrespective of the conditionality of ultilateral institution loans (the the procurement of raw materials and the IMF (contained in the Letter of orld Bank and its affiliates, IDA intermediaries in other developing Intent), and of the Bank (contained in 1d I FC, regional banks and countries, which explains the the Letter on Development Policy) !velopment funds, etc.). Another opposition to the new orientation of they pursue a very restrictive policy ost relevan.t factor is the high the Bank. themselves in imports, foreign • ~idity in the commercial (private) exchange allocation and investment nking system and limited It would not be fair to think that the (due to the lack of foreign exchange portunities for use in the heavily developed countries are unaware that and insufficient domestic and debted developing countries. Given the Bank could hardly play a new, external savings) in order to reverse e fact that multilateral financial broad role at the present level of balance of payments trends and stitutions lack adequate funds, the finance. First, by opposing the create a solid basis for a sustained ners of private capital have wider proposals to iucrease paid-in capital, revival of economic growth. Another anoeuvering space to lend their the developed countries have opted link in the chain is restoration of the 1pital through various market for a traditional role by the Bank and credit standing of a debtor country on struments at smaller risk if placed safe project lending to the developing the international capital markets, ough multilateral institutions, countries. Second, instead of resorting access to new borrowings to help vernments and government to budgetary allocation of resources finance revival and then further ~encies, specilizing in export credit for the Bank, they force it to raise econom,ic growth. Each project loan 1arantees and insurance schemes. money on the international financial of the World Bank directly or hus, the latest forms of ,financial markets (still highly liquid), because indirectly dictates a particular pport" to the developing countries of the great risks involved in direct economic policy in one or more e often nothing but export credits private lending to the majority of sectors, depending on the type and om the developed to the developing developing countries. Third, bilateral significance of the project, and on untries; frequently they are not flows of capital from the developed certain specific economic policy tiequadte solutions for all countries gain in importance under measures, often in the spheres of eveloping countries or the most the circumstances, since they are prices, investments and allocations of itable form of assistance. Finally, more strongly tied to exports of their financial (domestic and external) me developing countries, facing own goods and services and carry resources . In project lending, oblems of economic development more weight in terms of political however, the requirements of the d shrinking exports, are unable to influence on the recipient country. Bank are narrower than in the aw on the Bank's project lending in non-project, due to the character of e volume and for the periods that There are also objections by the the latter and the fact that it is revailed before the 1980's. Aware of developing countries to non-project available when the country is already 1is fact, the Bank endeavours to help lending, as being less favourable due faced with a huge balance of s member-countries recover their to tighter macroeconomic payments deficit and a lack of foreign conomic activity and achieve conditionality. Two things at least exchange with which to maintain stainable growth, convinced that it should be borne in mind, however. regular production. thereby also serving the interests of 1e developed countries. The overnments of many developed ountries, however, do not favour the hanging character of the Bank's ·nding and the shift from project to on-project financing. Their view of e Bank is traditional and  is known, however, that the share and current obligations of the Among various initiatives launched World Bank in various projects in Employer towards the World Bank go by the World Bank, the idea of ·inciple is one third of the total up, while domestic suppliers of establishing a ,multilateral investment sts and loan proceeds are used to equipment and contractors are less guarantee agency" and ,Bank af the ver the procurement costs of interested as they have to shoulder World Bank" are worth mentioning 1ported equipment. Great considerable exchange variations in here. For the time being at least, they fficulties have keen encountered by the currencies they disbursed from are being greeted by mixed feelings ployers (Bank borrowers) for the World Bank, and which were by the Bank's members. For it is any years now in securing the used to buy imported intermediaries widely believed that the )mestic portion of the financing, for the manufacture of equipment; implementation of those ideas would ,her from their own savings or from third, the share of the World Bank better serve the purpose of cal bank sources, in an diminishes relative to that originally safeguarding private capital (endings 1favourable domestic and planned, from about 30% to less than from the developed countries through ternational economic climate. a half of this, due to: (a) the high the usual safe channels and avoiding oking.for solutions to domestic inflation rate and (b), the further funding by the World Bank. ·onomic problems they must often depreciation of national currencies sort to a restrictive credit and against convertible ones. The As a result of the many years of onetary policy, tight investment diminishing share of the World Bank, effort by the developed countries in licy, positive interest rates in real irrespective of the causes, leads to various international bodies (the UN, rms and a realistic exchange rate difficulties in the new disbursement UNCTAD and others) to start r the national currency, stringent of loan proceeds and on the whole, negotiations between developed and nancial discipline and the like. A discourages borrowers from drawing developing countries on a mutually ajor role in these developments is further on the Bank. Efforts on the acceptable framework for faster ayed by the International Monetary part of the World Bank to eliminate economic development and adequate nd, joined as of late by the World these problems are evident. It keeps mechanisms of development ank. The present, highly complex undertaking partial measures, financing of the developing countries, 1d rather cumbersome disbursement however, and introducing ,new an agreement was reached at the last ocedure with the World Bank (the techniques of financing and Annual Meeting of the International inciple of direct payment to foreign programming" . However, more Bank for Reconstruction and 1ppliers, the so-called direct foreign radical and courageous measures are Development and its affiliates, and tchange component and the needed to ensure success. One is the International Monetary Fund, inciple of reimbursement of dinar undonbtedly, to do away with held in 1984, within the Development yments made to domestic suppliers unreserved companionship with the and Interim Committee, to initiate, equipment and contractors - the International Monetary Fund, inter alia, a discussion on the -called indirect foreign exchange advocating a policy of real interest fundamental issues relating to the )mponent) results, with a time lapse rates and having exchange variatiops external debt of the developing ometimes several months), in a shauldered by the borrower, because countries. This was one of the rare wer inflow of foreign exchange this approach by the latter adversely joint actions by the developed and om payment initially effected in the affects recipients of Bank's loans and developing countries in this sphere of cal currency, and hence in a further the attainment of development targets cooperation. However, in view of the rop in the value of the local vis-a-vis in the developing countries - the known stand of the major developed mvertible currencies. The direct main concern of the World Bank as a countries on (a) opening up the plications are: first, the Employer traditionally developmental markets of the developed countries to ceives less foreign exchange at the institution. exports from the developing nations, oment of reimbursement than he (b) provision of a higher and more as actually entitled to at the time he steady inflow of new capital under id the supplier; second, due to terms acceptable to the developing epreciation of the national currency countries, (c) a request for direct haracteristic of almost all negotiations between creditor and eveloping countries) the previons debtor countries, the outcome of this action is quite uncertain. YUGOSLAV WORKING ORGANIZATIONS REGISTERED AS CONSULTANTS WITH THE WORLD BANK IN 1980 Name Address Institute ,Kirilo Savic" Vojvode Stepe 51 II 000 - Beograd, Yugoslavia Telephone 469-322 Telex 11565 cables IKS Beograd Progres Invest Bulevar Revolucije 84 II 000 Beograd Tel. 431-624 Telex Ill 0 I YU Proinv Cables Proinvest ,Jugoinspekt" Cargo Superintendence Corp. Trg Republike 3/ 1 II 000 - Beograd Tel. 622-199 Telex 11424 YU Jugins Cables Jugoinspekt lnsitute of Forestry and Wood Industry at the Vecna pot 2 Biotechnical Faculty 61000 - Ljubljana Tel. (061) 264-761 Faculty of Transport & Traffic Engineering, Bulevar Vojvode Stepe 305 University of Belgrade 11000 - Beograd Tel. 468-120 (Director's office) 466-294 (Dean's office) Hidroprojekat Consulting Engineers Vele Nigrinove 16 11000 - Beograd Tel. 458-234; 458-222 Telex 11618 YU Contal Cables Hidro Beograd Ruder Boskovic Institute Bijenicka 54 41001 - Zagreb Tel. (041) 38-541 Telex 21383 Cables lnstrubo Zagreb IPK Osijek Vinkovacka 63 54000 - Osijek Tel. (054) 25-522 Telex 28088 YU IPEKA Cables IPEKA OSIJEK Institute for Social Development and Urban Vojkova 57 Planning 61000 - Ljubljana Tel. 346-161; 345-181 Turboinstitut - Ljubljana Rovsnikova 7 61210 - Ljubljana-Sentvid Tel. (061) 51-522 Arhitektura i Urbanizam Viktora Bubnja 5 11080 - Zemun Tel. 212-178; 218-490 Telex 11667 YU INTEXP Cables URBAN BEOGRAD me Address ize Research Institute Zemun Polje Slobodana Bajica I P.O.B. 89 II 080 - Zemun Tel. (011) 217-434 Telex 12363 YU Hibrid ustroprojekt Savska c. 88a 41 000 - Zagreb Tel. (041) 516-022 Telex 21483 YU INZ Cables INDUSTROPROJEKT ZAGREB 0 Mose Pijade 5/ VI 61 00 I - Ljubljana P.O. Box 476 Tel. (061) 310-545 titute for Town Planning and Communal Drugi bulevar I 09 ivities of SR Serbia II 070 - Beograd Tel. (011) 601-524 VODI ,Crvena zastava" Spanskih boraca st. 2 34000 - Kragujevac Tel. (034) 63-150 Telex 17155 titut za puteve Ul. Kumodraska br. 257 II 000 - Beograd Tel. (011) 466-133 ricultural Economics Institute Cara U rosa 54 II 000 - Beograd )I - United Agriculture Food Industry and Butmirska cesta 22 de - Institute 71210 Ilidza - Sarajevo K - Industry of Thermopower Plants, Zitnjak b.b. Zagreb cessing Equipment and Boilers Tel. (041) 217-420 Telex 21319 YU TPK ZG Cables TEPKA Zagreb wna Inzeniring Smartinska 130 61 000 - Ljubljana ~G ,Trudbenik" Bulevar Revolucije 79 I I 000 - Beograd Tel. (0 II) 424-033 Telex 12404 YU KMG BG ' titute of Agricultural Economics and Bulevar Yugoslavija bb ganization - Faculty of Agriculture 91000 - Skoplje Tel. (091) 227-569 ltitut za drvo Ul. 8. maja 82/ I 41000 - Zagreb Tel. (041) 448-611 Jam ova 39 61000 - Ljubljana Tel. (061) 263-261 Telex 31296 YU Jostin OJECTION OF THE BALANCE OF economic relations, and in line with them SOCIALIST REPUBLICS (socijali sticke YMENTS AND PROJECTION OF to determine the extent of the right to republike) are federated units of the E FOREIGN EXCHANGE import goods and services and to make Socialist Federal Republic of Yugoslavia. LANCE (projekcija platnog bilansa i international payments, and to define There are six socialist republics: jekcija deviznog bilansa) are planning obligations concerning the realization of Bosnia- Herzegovina, Croatia, Macedonia, egories and a joint expression of the exports and foreign exchange earnings. Montenegro, Serbia (within which there ·rail planning of foreign economic are two socialist autonomous provinces: tions. Projections of the balance of SOCIAL ACCOUNTING SERVICE Kosovo and Vojvodina), and Slovenia. ments and foreign exchange balance (sluzba drustvenog knjigovodstva) . This is According to the SFRY Constitution of Yugoslavia contain mutually adjusted an independent and specialized service 1974, socialist republics are based on the 1jections of the balance-of-payments responsible for social accountacy. It sovereignty of the people and the power .l balance-of-foreign exchange position performs activities related to : of and self-management by all working the republics and autonomous record-keeping, analysis and transmission people and are socialist self-managing 1vinces. The basic reasons for the of information in the use of social democratic communities of working roduction of the position of the reso urces ; supervision of the accuracy of people and citizens and of nations and ublics and autonomous provinces in data in the use of these resources; nationalities having equal right. goslavia's balance of payments and supervision of legality in the use of social eign exchange lie in the intention to resources; supervision of the execution of WORK ORGANIZATION (radna sfer to the republics and autonomous obligations of associated labour organizacija). This term denotes a form of vinces appropriate rights and organizations, socio-political communities the pooling of labour and resources in ponsibilities in reference with and other self-managing organizations which workers are united by their ernational trade . and communities. This service is also in common interests in work. A work charge of all payments within Yugoslavia. organization is an independent, LF- MANAGEMENT AGREEMENTS self-managing organization of associated moupravni sporazum) are THE SOCIAL PLAN OF YUGOSLAVIA labour. f-management acts adopted, on equal (drustveni plan Jugoslavije) lays down ms, by workers in organizations of development policy for the country as a ociated labour and by workers in work whole and gives guide lin es and munities, communities of interest and frameworks for the adoption of measures 1er self-managing organizations, with a ensuring general conditions for f spect to coordinating mutual interests implementing this policy and directing · purposes of more efficient social reproduction . The Plan is based on ecialization of production, the pooling the agreement reached by working people, labour and resources, and the organizations of associated labour, ·mation of work and other se lf-managed communities of interest and >anizations of associated labour. other self-managed organizations and r f-management agreement is only communities, and on the agreement 1ding on those who have signed or reached by the republics and autonomous . eded to it. provinces. The Social Plan of Yugoslavia is passed by the SFR Y Assembly in LF- ' MANAGING COMMUNITIES agreement with the republican and · INTEREST FOR FOREIGN provincial assemblies. ' ONOMIC RELATIONS ON THE PUBLICS AND AUTONOMOUS SOCIALIST AUTONOMOUS OVJNCES (samoupravne zajednice za PROVINCE (socijalisticka autonomna onomske odnose sa inostranstvom u pokrajina). This term denotes an ublikama i autonomnim pokrajinama), autonomous socialist self-managing ~ obligatory communities for all socio-political community, a constituent onomic agents operating on the territory pa rt of the Socialist Republic of Serbia. a republic or autonomous province Its autonomous rights are defined by the 1ich realize or use foreign exchange in SFRY Constitution and the Constitution ir business. The basic duty of such of the Socialist Republic of Serbia. The mmunities is to help with the drawing socialist autonomous provinces have been d coordinating of plans for foreign formed on territories inhabited by a population of mixed ethnic composition (nations and nationalities).  udruzena banka hrvatske e Udruzena banka Hrvatske, It contributes to the improvement The import from hard currencies greb (UBH, Zagreb) was of relations with and amongthe markets is expected to grow by :ablished in mid 1983 and on other associated banks in the 12% and total imports by 10%. vember 15, 1984 it commenced country, due to the fact that six of international activities. its member-banks are at the same With a view of further time members of other associated improvement of national export, individual basic banks located banks in Yugoslavia. The aim of the task of the UBH, Zagreb will the Socialist Republic of Croatia the UBH, Zagreb is primarily to be to ensure funds at best for the ered the Self-Management coordinate and promote export-related sector financing, as \reement on Association into Yugoslavia's international well as for financial consultings. 3H, Zagreb,. At present it is one economic relations, up to now, it the largest banking institution in has pooled member banks' foreign The UBH, Zagreb consolidated its 1goslavia. Its 1983 concolidated accounts, it has consolidated and member shareholding (its lance sheet showed the total updated wide international shareholding members) in the >ets of 1.199,608 biJlion, dinar correspondent network, as well as following banks abroad: ich equals US $ 9,35 biJlion, as of its representative offices, and it r rate of exchange on 31 has taken over the foreign 0 LHB International Handelsbank :cember, 1983. exchange management for its AG, Frankfurrt/ M, member banks. From the moment 0 The International Investment e UBH, Zagreb becambe a of its foundation it has been liable Corporation for Yugoslavia S.A. \nificant link in the domestic for all obligations undertaken Luxembourg, mey marketby servicing almost abroad. Its responsibility is to 0 Anglo Yugoslav (LOT) Ltd, Croatia's associated labour. organize international credit and London, guarantee activities to accept and 0 Adria Bank, AG, Vienna, issue international credits, 0 Bangue Franco Y ougoslave, short-term credit lines and Paris, deposits. 0 The Development Bank of Zambia, Lusaka. The UBH, Zagreb takes over its The UBH, Zagreb has member banks' shareholdings in representative offices in London, foreign banks, and it will continue Frankfurt/ M and Zurich. to develop a network of offices abroad, particularly in the countries where Yugoslavia has its commercial interests. The UBH, Zagreb operates in the SR of Croatia, and it has great possibilities to improve international trade. The export of goods from the SR of Croatia will substantially exceed US$ 3 billion in 1985. The SR of Croatia also takes an active part in invisible export (transportation, tourism, investment enterprising). The export to hard currency markets is likely to grow this year by 15% and the total export by 12%.  a- udruzena beogradska banka (ASSOCIATE D BE LG RADE BANK) Kn ez Mihajlova 2 P.O .B. 955 11001 BEOG RAD Telephone : 624-455 Telex: 11712 , 12709 Yu BG Bank DRUZENA BEOGRADSKA Particular attention is paid to \.NKA follows the work and development of relations with the velopment of almost Five world financial market. This is ousands Yougoslav organizations. It confirmed by established done trough 19 basic banks which correspodental relation with over one e: BEO-BANK, INVESTBANK, thousand banks throughout the world )UGOSLAV Export and Credit and exclusive accounts withwmore mk, Agrar bank, bank of Nis, then 270 world banks. >mmercial Bank - Nis, Belgrade nk - basic bank Ljubljana, as well Particular attention is given to basic commercial banks from development of relations with the teak, Loznica, Pirot, Pozarevac, world finacial market. This is iboj, Prokuplje, Smederevo, Sabac, confirmed by established tovo Uzice, Trstenik, Valjevo, and correspodental relaltion with over one anje. Highly spread banking system thousand banks trougmout the world t of Udruzena Beogradska banka and opened unique accounts in more nsists of about 500 branches of then 270 world banks . .sic banks throughout Yugoslavia. Successesful inclusion of the tere is no economic or social affairs Udruzena Beogradska banka in world tivity which is not incorporated finacial market was enabled by its net onomic organizations - members of of agencies, representing officies and tsic banks in Udruzena Beogradska information bureaus in New York, mka system. Mutual cooperation London, Paris, Frankfurt, Wien, td connections are among basic Zurcih, Moscow, Marare, Tripoly, !vantages of this banking system. Stochlom, Amsterdam, Brussell Munchen, Hanover, Duseldorf, lore than 5 million savers have their Stuttgart, Berlin, Hamburg and Koln. nnar and foreign currency accounts td perform finacial and credit Udruzena Beogradska banka is one of :msactions through Basic Banks - of the founders of mixed banks with druzena Beogradska banka system. residence in London, Luxembourg, Pris, Wien, Frankfurt, Lusaka and Llsiness with the world represents Kampala. gnificant part of total buisness :tivity of Udruzena Beogradska mka.  UDRUZENA BANKA PRIVREDNA BANKA SARAJEVO (ASSO C IATED) (ALLIED BANK-COMMERCIAL BANK SARAJEVO) 71001 SARAJEVO 19, Vojvode Stepe obala Telephon: (071) 33-143 Telex : YU P.B.S. 41-280 Cable telegram : privredbank Yougoslavia Privredna banka Sarajevo (P.B.S.) is a commercial and financial system consisting of 22 basic banks, 350 smaller and bigger business units and 7 representative officies troughout the world. Privredna banka SaraJevo has domicile in socialist republic of Bosnia and Hercegovina. With its credit potentials, Privredna banka Sarajevo is among leaders in Yugoslav banking system, and has significant plase among world banks. Main directions of activity of Privredna banka Sarajevo is, maximal concentration and mobilisation of financial assets, giving priority to economic development, industrialisation on basis of domestic row material potentials, building of power plants, food production, streenhting export, services and productiv hendcrafts. Modernisation of selfmenagement and tehnology of work in Privredna banka Sarajevo is under way, with main aim to activate economic and professional abilities in giving better quality service, and realisation of main aims and goals in long - therm pro&ram of Yugoslav economic stabtlisation.  STOPANSKA BANKA ZDRU2ENA BANKA SKOPJE (STOPANSKA BANK - ALLIED (ASSOCIATED) BANK - SKOPJE) 7, II Oktomvri street 91000 SKOPJE )panska bank is the biggest REPRESENTATIVE OFFICES: ancial association of associated London >our in Socialist Republic of I 03 Kings way acedonia, and among the six Telefon : 0 I 405 6053 ~gest in Yougoslavia. Stopanska Telex : 229053 stabnk nka incorporates 25 basic banks Frankfurt ·oughout Macedonia, located in all Prsellanhof str 4/ lll ~ger towns. Telefon : 0611 285 792, 285 793 total banking assets of Macedonia, Telex: 416770 stabnk >p~mska bank participates with New York out 90%, and it is the main Empire State Building momy and population creditor. 350 Fifth Ave, Room 4914 >panska bank is the licenced bank Telefon: (212) 594 6157 8 · operation with Federation Fund Sidney ;ets in order to credit faster 323 Castereaqh street velopment of economically Central Square developed republics and Telefon: 212 4058 tonomus provincies among which is Telex : 25124 stabnk ! Socialistic Republic of Macedonia Stopanska bank cooperates with over Toronto elf. At the same time Stopanska 300 world banks. Relations and 741 Broad view Avenue nk is a mediary in providing contacts with I.B.R.D. from Telefon : (416) 46 \ancial credits from abroad and Washington are highly developed. Telex : 652 4072 arantor when the member banks I.B.R.D. assets were used for ce commercial credits. financing medium and small industrial objects, especially agroindustrial complexes and general consumer goods· industry. Stopanska bank has provided from the World Bank 12 credit lines, since 1973, of total value of 362,4 million dollars. Seven credit lines, 240,6 million dollar value, were assigned for financing development of agroindustrial complexes in Socialistic Republic of Macedonia, while 85,8 million dollar credited the development of general consumer goods industry in the Republic. Stopanska bank is one of the founders of Anglo-Yugoslav bank, Franco-Yugoslav bank, LHB- bank Frankfurt, as well as International Financial Corporation for Yougoslavia with residence in Luxembourg.  INVESTICIONA BANKA TITOGRAD (1-B-T) UDRUZENA BANKA (INVEST BANK- TITOGRAD - ASSOCIATED BANK) I, Bulevar Le njina te lephone : (081) 44-555 telex: 611 8 YU JBANKA BOKEUSKABANKAOSNOVNA BASIC BANKS BUSINESSES INANCIAL BANKA - KOTOR EARER Partizanski put 1, tel.: 082/25-333 Dinar and foreign currency savings accounts IF MONTENEGRO OSNOVNA BANKA ROZAJE - ROZAJE , M. Tita 45 , tel.: 084/54-135 ~EVELOPMENT Consumers credits (for industrial, and OSNOVNA BANKA NIKSIC - building materials and cars ·esticiona banka - Titograd , NIKSIC ruzena banka is the biggest Radoja Dakica bb. , tel. : 083/22-396 Housing loans :menaging financial organization of Socialist Republic of Montenegro. BUDVANSKA OSNOVNA BANKA Cush credits 'estbanka - Titograd incorporates - BUDVA basic banks, all basic and other Nova ulica bb. , tel.: 086/41-744 Credits on basis of sold fore ign 'anizations of associated labour, currencies f-managing communitions of CETINJSKA OSNOVNA BANKA - ~ rests and other social organizations CETINJE the territory of the Republic. Personal income payments BaiSica bazar bb ., tel.: 086/21-225 .SIC BANKS - MEMBERS OF OSNOVNA BANKA ULCINJ - Foreign exchange :- T - ASSOCIATED BANK ULCINJ Ul. 26. novembra bb ., tel.: 085/84-172 Money transfers from abroad and fOGRADSKA OSNOVNA lawful opennings of foreign currency ~NKA - TITOGRAD OSNOVNA BANKA U accounts 'vaka Miloseva 8 a , BEOGRADU .: 081 /44-555 Deligradska 12, tel.: 0111643-121 Current accounts ;NOVNA BANKA PLEVLJA PRIMORSKA BANKA erliceva bb. tel.: 084/81-406 Insurance services OSNOVNA BANKA - BAR M. Tita bb ., tel.: 085/22-173 ELOPOLJSKA OSNOVNA Complete privacy guaranted ~NKA - BIJELO POLJE . Slobode 40, tel.: 084/22-443 REPRESENTATIVE OFFICIES: :: RCEGNOVSKA OSNOVNA LONDON , tel.: 43-98-725 , \NKA - HERCEG NOVI telex: 21454 egoseva 46 , tel.: 082/43-444 MILANO, tel.: 726-476 , telex: 25896 THE NATIONAL ;NOVNA BANKA- IVANGRAD FRANKFURT, tel.: 281158/59, limska 2, tel.: 084/61 telex: 4189476 BANK OF NEW YORK , tel.: 212/490-8990/1/2 YUGOSLAVIA Investiciona banka -Titograd - associated bank and basic banks , her IS THE members , perform all credit and GUARANTEE FOR banking services in the country and abroad. ALL SERVICES YUGOSLAVIA AND THE WORLD BANK