World Bank loan for Slovakia

- Last updated on GMT

Related tags: World bank, Poverty

The World Bank's Board of executive directors has negotiated a new
Country Partnership Strategy (CPS) for the Slovak Republic covering
the period 2005-07, a move that is expected to bring further
funding to SME food and beverage businesses in the country.

The CPS details the Bank's work plan to assist client countries in achieving their development goals. It describes all of the Bank's planned operations in the country-lending, analytical work, and technical assistance. The new CPS for Slovakia covers the period 2005-2007 and envisages a lending programme of up to $17 million (€13,85m) with a special focus on the non-lending instruments such as technical assistance and analytical work.

According to Petra Vehovska of the World Bank, the CPS has not been specifically drawn up for the food industry, but both directly and indirectly it is expected to benefit from the funding once it is allocated by the Slovakian Ministry of Finance.

Specific priorities of the new CPS include assisting the government in improving fiscal consolidation and management of public finances; further implementation of structural reforms to enhance competitiveness of the economy; and social development and poverty reduction. Although the programme is not specifically aimed at the food industry, the sector is expected to be a benefactor.

"The goal of the CPS is to support the country's efforts to improve the quality of life of its people and enhance efficiency and competitiveness of the economy",​ said Ingrid Brockova, World Bank Country Manager for Slovakia. "This is why improving the education system as well as promoting poverty alleviation and social inclusion are key in the Slovakia CPS, as is supporting the restructuring of judicial system in order to improve overall transparency and efficiency of the system."

While significant progress has been achieved in implementing structural reforms since 1998, Slovakia is still facing major development challenges in its efforts to manage public finances more prudently; converge to the EU income levels and be fully competitive in European and world markets; and at the same time address issues of social inclusion and poverty alleviation.

Despite a very impressive economic performance (GDP growth over 4 per cent, public deficit at 3.6 per cent in 2003, substantial public expenditures decline), the unemployment rate remains high (17 per cent), and while absolute poverty is low, there are deep pockets of poverty, particularly among the unemployed and the Roma minority. Small and medium enterprise development is lagging, and education reforms are at an early stage while the lack of education remains a key determinant of unemployment and poverty.

The CPS is organised around three central themes: Fiscal consolidation, implementation of structural reforms for economic enhancement and poverty reduction.

The previous Country Assistance Strategy (CAS) for Slovakia covered the period 2001-2003 and envisaged a lending program of up to $415 million. In the framework of this strategy, the Bank assisted the government in implementing reforms aimed at restructuring the banking and enterprise sector, supporting design and implementation of pension reform, and strengthening public finance management as well as health sector modernisation.

"Slovakia has made notable progress in recent years. Its accession to the EU both certifies this progress and presages continued achievements in the future",​ noted Roger Grawe, World Bank Country Director for Slovakia. "As Slovakia assumes a new status, it is appropriate for Slovakia and the World Bank to enter into a new phase of their partnership in which analytical work and advice based on global experience will play a major role."

Currently the Slovakian food industry produces €2.44 billion worth of food each year and involves 346 companies employing 46,000 people. In 2002 an estimated 70 per cent of Slovakian income was spent on food, although that figure is expected to decrease as income levels are currently increasing.

Related topics: Market Trends

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