“Europe and Central Asia was one of the regions hit hardest by the financial crisis and the region is still recovering.  Rising joblessness is pushing households into poverty and making things even harder for those already poor,” said World Bank Group President Robert B. Zoellick.  “The World Bank has provided record support to help the countries of Europe and Central Asia respond to the crisis.  I look forward to discussing with the governments of Bulgaria, Moldova, and Latvia how the Bank can continue to help drive economic recovery.”

Europe and Central Asia is a diverse region of emerging economies, and therefore faces differing prospects for recovery.  About half of the region’s 30 countries experienced a decline in GDP in 2009, with GDP growth ranging from a negative 18 percent in Latvia to a positive 9.3 percent in Azerbaijan.  Growth in the region, which had peaked at about 7 percent in 2007, fell to a negative 6 percent in 2009 and is projected this year at around 4 percent.

The World Bank Group responded quickly in fiscal year 2010 (FY10) to requests from countries in Europe and Central Asia for help in addressing the global economic crisis, providing record support of $14.8 billion to the region.

On August 9 – 11, President Zoellick will, together with EC Commissioner Kristalina Georgieva, former Vice President and Corporate Secretary of the World Bank Group, visit Bulgaria, a new EU member state as of January 1, 2007.  EC Commissioner Georgieva and President Zoellick will meet with, among others, President Georgi Parvanov, Prime Minister Boyko Borissov, Deputy Prime Minister and Minister of Finance Simeon Djankov, and Minister of Foreign Affairs Nickolay Mladenov.  Along with Minister of Regional Development and Public Works Rosen Plevneliev and EC Commissioner Georgieva, President Zoellick will visit a road section which is being rehabilitated with co-financing provided by the World Bank’s Road Infrastructure Rehabilitation Project.

“As a new EU member state, Bulgaria has a unique opportunity to make the most of the existing European support to speed up the convergence of living standards,” said Zoellick.  “In order to increase the country’s competitiveness, investing in infrastructure – including transport infrastructure – is critical.  I look forward to discussing how the World Bank can, in close partnership with the European Commission and European institutions, help Bulgaria best use available resources.”

In Moldova, on August 11 – 12, President Zoellick will meet with Prime Minister Vlad Filat, members of the Moldovan Cabinet, as well as ambassadors, think tanks, and heads of donor agencies.  He will have the opportunity to visit a kindergarten supported by the Moldova Social Investment Fund 2 project and the Education for All-Fast Track Initiative.  Zoellick will speak with beneficiaries of the Competitiveness Enhancement Project, which the World Bank has provided additional financing of $24 million over the past year in order to promote Moldovan exports and create new jobs in the face of the economic crisis.

“Moldova is undertaking reforms to stabilize, recover, and grow the economy while at the same time protecting the most vulnerable.  Important progress has been made on the latter with the rolling-out of the new income-based social assistance system. But, the devastating floods that hit Moldova this summer have raised new social and economic challenges,” said Zoellick. “I look forward to hearing about the steps that the Government of Moldova has taken to address the impact of the economic crisis and re-orient the economy for European integration, and discuss the Bank’s role in helping the country achieve progress on this agenda.”

In his final stop, Latvia, on August 12 – 13, Zoellick will meet with President Valdis Zatlers and Prime Minister Valdis Dombrovskis, and, together with EU Commissioner for Development Andris Piebalgs meet with the State Employment and Social Insurance Agencies and visit with the beneficiaries of the Workplace Stipend Program supported by the Bank’s Safety Net and Social Sector Reform Development Policy Loan (SDPL).  President Zoellick will also meet with Minister of Finance Einars Repše, as well as representatives of the private sector and civil society.

“The global recession hit Latvia harder than any other country in Europe, increasing unemployment to almost 17 percent.  The economy declined by 18 percent in 2009 and is expected to contract further by 4 percent in 2010.  The social impact of the contraction has and will continue to be deep and widespread.  Latvia has been steadily implementing difficult fiscal reforms that have enabled it to exceed targets set in the international rescue package,” said Zoellick. “These are certainly very difficult times for Latvia and the government has to make sure that especially the poorest and most vulnerable groups are protected. I look forward to hearing about how the reforms are going and what the World Bank can do to continue supporting the country in its recovery from the crisis.”

Background:

The IBRD/IDA recipients in ECA are using $10.8 billion for 57 projects across all sectors in FY10 (July 1, 2009 – June 30, 2010).  Of this, IDA commitments were $0.6 billion in FY10 – up from $0.4 billion in FY09 – and IBRD commitments totaled $10.2 billion in FY10 – up from $8.9 billion in FY09.  In FY10, IFC committed $2.9 billion for its own account and mobilized an additional $682 million in financing for its clients in the Region.  IFC supported 100 projects, of which 46 percent are in IDA countries and in frontier regions of middle-income countries.  And MIGA provided support for 12 projects with $1.1 billion in political risk insurance coverage in the Region during fiscal year 2010.

The World Bank Group consists of the International Bank for Reconstruction and Development (IBRD), which provides financing, risk management products, and other financial services to members, as well as analytical services, capacity building, and technical services; the International Development Association (IDA), which provides interest-free loans and grants to the poorest countries; the International Finance Corporation (IFC), which makes equity investments and provides loans, guarantees, and advisory services to private-sector business in developing countries; and the Bank Group’s political risk insurance agency, the Multilateral Investment Guarantee Investment Agency (MIGA).