Income per capita is only half of the highest GNI in the group, or only 33% of the average GDP per capita (PPP terms) of the 27 EU countries. We have a strong need of funds and permanent technical assistance in order to continue with and accelerate our structural reforms. The Greek example is a newest lesson. European and other funds, without all the painful and grave structural reforms, could not protect the country from facing the present crisis. However, it seems that, without structural reforms, they just boost the illusion. The recent crisis has highlighted the need for the international financial institutions to have adequate level of resources and flexible, innovative and swift technical infrastructure. It is a prerequisite for a well targeted, timely, coordinated and efficient response to global shocks. The strong increase of IBRD disbursements, policy based lending and advisory services in 2009, the dominance of social protections programs, on the background of the social implications of the crisis, pinpoint the rapid and well targeted adjustments in the lending policy and expertise provided by the World Bank. The share of the World Bank financial support to the region in the total WB financing in 2009 rose to 20% (compared to the average of 16% for the previous three years). Significant weight was put on the enhanced social protection, regulation adjustment for the purpose of trade promotion, financial sector reforms and improved governance. Dear guests, Let me once more repeat that looking forward, the role of the World Bank becomes even more pronounced.
As stated in the World Bank Annual Report 2009 “targets that it would have been difficult to reach even before the crisis are now considered implausible, and a real risks exists that the financial and economic crisis that begun in United States may develop into a humanitarian, political, and security catastrophe in the world’s most vulnerable regions.” The ECA Region was the hardest hit region by the global crisis. The decline of external demand, unfavorable terms of trade, decline in capital flows, as well as spillover effects to the domestic demand resulted in a fall of region’s GDP in 2009 of about 6%. With the real sector of the economy contracting and financial flows being constrained, unemployment and poverty have risen. Although all countries in the region faced with challenges during this turbulent time, still the crisis has had a disproportionate impact on the vulnerable in the less developed countries calling for bigger assistance to mitigate social impact. The World Banks’ assistance was of a paramount importance in the past and will continue to be. It is not only about the financial support, but the support and guidance in implementing structural reforms. The mix of the World Bank programs aimed at creating broader based growth, efficient public sector and social protection, has yielded in decrease of the poor or vulnerable population in the region (18% of the total population has exited this group, since 1999).