28 April 1999 

TRANSCRIPT: IMF, WORLD BANK PRESS BRIEFING ON KOSOVO AID, 4/28

(Assistance aimed at refugee and reconstruction costs) (5800)



Washington - The International Monetary Fund and the World Bank said
they are working with the European Union to deal with the economic
consequences of the Kosovo crisis both on individual countries and on
the region as a whole. They said their efforts are focusing on the
immediate costs of refugee assistance, as well as the longer-term
costs of post-conflict reconstruction.


Michael Deppler of the IMF and Johannes Linn of the World Bank
discussed the issue during a press conference here April 28, after
which the IMF and World Bank released a joint report, "The Economic
Consequences of the Kosovo Crisis."


Deppler said he had no concerns about financing refugee costs, because
support appears to be "tremendous" so far, but he was more cautious
about the long term. "The really huge bills are going to be in
reconstruction, but this is down the road. We have to have peace
before we can think of reconstruction."


Linn said he did not think the amounts needed are so great that they
will stress the financial capacity of either the IMF or World Bank
"or, for that matter, that they should present insurmountable burdens
on bilateral donor budgets."


Deppler said the international community is concerned that the current
crisis could disrupt the economic stabilization and reform process
taking place in the region. He added that the IMF and World Bank
welcome statements by affected countries to persevere with reforms
despite the severe difficulties that the crisis has placed on them.
"Part of the assistance," he said, "is needed to sustain that momentum
so that these economies keep on the road to market-oriented stable
economies."


Following is an edited transcript of the press conference, from the
IMF homepage:


(Begin transcript)



PRESS CONFERENCE

"THE INTERNATIONAL COMMUNITY RESPONDS TO THE KOSOVO CRISIS" 

By MICHAEL DEPPLER, DIRECTOR, EUROPEAN 1 DEPARTMENT, IMF, 

and JOHANNES LINN, VICE PRESIDENT, EUROPEAN AND CENTRAL ASIA REGION,
WORLD BANK


April 28 1999

9:00 a.m.

IMF Headquarters, B-702

Washington DC



MS. WHITE: Good morning. My name is Kathleen White with the Media
Relations Office of the IMF. Welcome to the press conference on the
economic consequences of the Kosovo crisis.


Addressing you today will be, on my right, Michael Deppler, the
Director of the European One Department of the IMF. To his right is
Johannes Linn, the Vice President of the European and Central Asia
Region for the World Bank. Soon to arrive will be Jan Pakulski, at the
end of the table, the External Affairs Officer for Europe and Central
Asia.


Let me do a little bit of housekeeping first. The contents of the
paper which I hope most of you have received upstairs, "The Economic
Consequences of the Kosovo Crisis," will be embargoed until the end of
the press conference, and I will announce a specific time at the end
of our conference this morning, which needs to end promptly at 9:50.


We have some opening statements by both of our officials here this
morning, and I invite Mr. Deppler to begin.


MR. DEPPLER: Good morning. We have reached a certain stage in the
process where the two institutions have been doing work on the
implications of the Kosovo crisis.


The first step was this paper which you see, which you have, and which
was discussed by our respective Boards last week and endorsed by them
in terms of the basic thrust, in terms of the roles and the work of
our two institutions.


I will not discuss the report because I will wait for your questions
later on.


What I thought I might do is relay a few points about the meeting we
had yesterday evening, which was a further step in this process. My
own reading is that that meeting was successful in achieving one of
the objectives, which was furthering the process and galvanizing the
process of international economic coordination about the implications
of the crisis.


I thought it was a very good meeting. The donor countries were fulsome
in their statements of support and commitments to the amounts of money
they have already committed to support these countries. I thought we
also had a very good set of statements from the affected countries,
very responsible in their own assessments of the situation. So I
thought it was a very positive meeting and helped move the process
forward.


The other point I would see coming out of that meeting was the sense
that the Europeans should be taking the lead in addressing and
furthering the coordination process. This was a point that the
Managing Director made.


It was also in line with what is on the table already. As you know,
the Germans have called for a meeting of Foreign Ministers in late
May. Indeed, yesterday's meeting was partly prompted by the call by
the French Minister of Finance, Mr. Strauss-Kahn, for a Balkan
committee. So this is part of an evolution.


I think there was also agreement, in terms of the nitty gritty of
coordinating financing and so forth, that some version of the G-24
process which we have used in the transition economies over the past 8
or 9 years to help mobilize balance-of-payments financing might be
suitably adapted. This, for those of you who do not know, is a process
which is led, in the first instance, by the EU Commission and the
World Bank. And my sense of the meeting yesterday is there is general
agreement to proceed in these directions.


The other point I heard was the affected countries, while underscoring
the severe difficulties that the crisis had placed on them, also
emphasized their firm resolve to persevere with the economic
adjustment and reform ethics. I think one of the concerns of the
international community is that this crisis not disrupt the
stabilization and reform process in these countries. Part of the
assistance is needed to sustain that momentum so that these economies
keep on the road to market-oriented stable economies.


Finally, as I said earlier about the Board's support for the basic
vision of the goal of the Fund and the Bank that is in this paper,
this was also something that was supported at this meeting. There was
a particularly strong endorsement for the Fund to focus on the
macroeconomic implications and balance of payments implications of
this crisis for the affected region.


The final point, I think, is there was a strong theme that there was
not only a need to look at the region on a country-by-country basis,
but also to have a regional focus. As you probably know, Yugoslavia is
not a member of the Bretton Woods institutions. So we have a
non-member in the middle of the region, and it is very important to
support the individual country analyses with a more regional
framework.


MR. LINN: I do not really need to add much to what my colleague from
the IMF said. I perhaps just want to point to the press release that I
am sure you have all seen, and in particular point to the five
critical dimensions which are mentioned on the second page, which I
think very effectively summarize the sense in the room in terms of the
criteria that should govern the support that is
being provided. First, the urgency of the need and the quickness of
response. Secondly attention to reform and governance, which is one of
the last points that Michael Deppler made. Third, additionality; that
there is a need for additional resources. Fourth, concessionality,
meaning that the resources should be on appropriate terms for the
situation. And finally, that, of course,
they should be properly coordinated. So these, I think, were very
useful. It was also very useful to have that agreement all around the
table, including, as Michael said, from the countries that are
directly affected, quite apart from the donor countries.


I might perhaps say a few words on the next steps because I think one
question one can rightfully ask is: all these meetings, that is great,
but what is actually happening?


Well, first of all, let me say that there are country-specific donor
mobilization meetings which I expect to yield specific results in
terms of commitments for countries concerned. So we are, in fact,
moving forward with country-specific donor meetings, following the one
that was already held last week on the 21st in Brussels for Bulgaria,
which resulted in total pledges of $750 million, of which $275 million
for 1999, and of that, an estimated roughly $100 million in additional
incremental support to deal with the impacts of the Kosovo crisis.


So there is already a very clear indication that the donor community
is actively engaged beyond the humanitarian and refugee assistance,
which is ongoing currently on the ground, which UNHCR and other relief
and refugee organizations are running.


We have an emergency meeting, a donors meeting planned for May 5th on
FYR Macedonia in Paris, where we are hopeful that we can also achieve
specific pledges based on country-specific assessments of impact. We
are also currently preparing donor meetings for Bosnia-Herzegovina and
for Albania later in May.


So these meetings will proceed and are a very important framework in
which country-specific efforts, assessments and donor efforts will be
made more precise, and, of course, the basis for implementation.


The second follow-up set of instruments are, as Mike has already
indicated, regional meetings because it became clear at yesterday's
meeting that we really do need, in addition to the country-specific
fora, a broader regional perspective and coordination mechanism.


In connection with the May 5 donors meeting in Paris on Macedonia,
there will be an additional short, brief updating meeting for the
representatives of the donor community to report on further progress
in assessment impact estimates and planning for region-wide response,
and that in turn is prepared as a preliminary for the meeting that the
Germans and the EU presidency has now announced for May 27 in Bonn.
That will be a broad Balkans meeting assessment and response
coordination meeting.


So there are these two tracks, first of all, country and bilateral
country-specific meetings between countries and donors; secondly, the
region-wide approach. But let me also say a few things about immediate
assistance from at least ourselves because I think it is important for
you to realize that we are actually also doing things on the ground.


In Albania, in particular, we have approved two $1 million
post-conflict grants in support of infrastructure improvements in the
refugee areas, and I am now talking about World Bank assistance
specifically. Secondly, we are ready with a $30 million
quick-disbursing public expenditures support program which will be
presented to and, we expect, approved by our Board next Thursday. We
are finalizing another $35 million quick-disbursing operation next
week with Albanian officials for approval later in May or June. And we
are organizing, as I mentioned, a donors meeting for Albania late in
May.


For Macedonia, we are preparing a $1-million grant from our
post-conflict fund to provide educational materials, supplies, and
teacher training to help with refugee education, children's education.
We expect to see approval from our Board of a $50-million emergency
critical imports credit in early May. And finally, as I mentioned, we
are planning the CG for Macedonia on May 5.


For Bosnia-Herzegovina, we intend to increase budget support within
our regular program. We have two adjustment credits which are being
prepared for Board approval in May-June, and they will be increased
from $44 million to $60 million to allow for the increased needs in
the context of the Kosovo crisis. Also for Bosnia-Herzegovina, we have
a donor meeting planned for late May.


In the case of Bulgaria, Romania, and Croatia, we are also preparing
very actively adjustment operations. In each case, we will look at
incremental needs and make, where possible, appropriate additional
funding available.


I should perhaps clarify, in the case of Albania, Macedonia, and
Bosnia-Herzegovina, all our lending is on IDA terms. In the case of
Bulgaria, Romania, and Croatia, our lending is on IBRD terms.


Let me stop here.



QUESTION: I wonder if you could talk for a moment about thinking
further ahead. There are, of course, reasons why Yugoslavia itself, it
is difficult for you to talk about, but the reality or our reality may
be that when peace is achieved, the country will be perhaps bombed to
semi-oblivion.


Can you talk about the regional perspective, and how you will think
about that perhaps in a year or when peace or some settlement is
achieved?


MR. LINN: Let me say the discussion yesterday was around two broad
time frames. One was the immediate short term, the other one around
the medium term, and we were asked as part of the discussion to begin
to put in place a thinking and planning process for the longer-term,
hopefully, peaceful context of reconstruction of the whole region,
including also thinking about
reconstruction needs especially in Kosovo and hopefully, then, also of
Yugoslavia.


So the focus will be from now on not just on the short term, but also
on the medium term, reconstruction needs, and, of course, in that
context, one will want to think about how regional integration and
cooperation can be fostered through various mechanisms, whether it is
infrastructure that links countries and peoples in the region or
institutional mechanisms, or just facilitation of trade.


We actually are currently preparing a project, a multi-country
project, under the aegis of the so-called SECI regional initiative,
which is in support of facilitation of cross-border trade. We know
that, even forgetting for a moment about the current difficulties that
cross-border trade has been impeded because of lack of information
flow across countries as regards the simple movement of trucks and
their contents, the lack of proper border crossing regulation,
inappropriate customs procedures, and lack of effective institutions,
corruption, of course, at the border, et cetera, et cetera.


So we have a project under preparation that we will hope to bring to
our Board this summer that would start with three countries and expand
to six countries and could be further expanded as we see more peace,
peace returning, to assure that trade flows both through the
countries.


So I think your question is very well taken, and it is indeed in our
agenda, very much reinforced by yesterday's discussion.


QUESTION: A quick follow-up, if I could. Is it a risk of Yugoslavia
becoming a bit of black hole?


MR. LINN: Well, from our perspective, I am not sure that the term is
the right term. But for us, unfortunately, Yugoslavia has been a
country which we have not been able to work in, and it's also clear
because of the impacts of past blockades and continuing elements of
lack of integration of the country.


I am told that when the most recent conflict started, the country had
not been fully integrated. It had been an important conduit for
transit. It had been an important country for bilateral trade for some
of the countries, such as Macedonia and some of the other countries,
but also, for example, Republika Srpska in Bosnia-Herzegovina depended
very heavily on trade with Yugoslavia.


Looking forward, obviously, for the region to become fully integrated
and for transit trade to be again fully reestablished, after the
conflict has been settled, the infrastructure reconstruction needs are
now humongous, and the need for an integration for Yugoslavia for a
lasting economic, let alone political, settlement, integration of
Yugoslavia will be essential, in my view.


QUESTION: I would like to understand the last table of your document,
whether some figures can be added up or not and why. You have got a
figure for total financing needs in two different scenarios. Why is
the budgetary gap not included? Can one add them up, or not?


And second, if indeed these are preliminary evaluations of the needs,
do you expect that the total aid will meet these needs?


MR. DEPPLER: On your first question, the balance-of-payments and the
financing-need estimates include the financing needs that stem from
the budgetary gaps. So the budgetary gap estimate is an estimate of
the pressure on their budgets stemming from the crisis. But the
balance-of-payments gap includes that, plus all the pressures that
come from the disruptions to trade and tourism and so forth.


Now, as regards the extent to which financing is sufficient to meet
these needs, I would make a clear distinction between refugee costs
and balance-of-payments gaps.


My sense of the meeting yesterday, and I am thinking in particular of
the representative from the UNDP, is that financing needs are being
met currently for refugee costs, which is the important thing. That is
not to say everything is running smoothly, but I do not think there is
a financing bottleneck, if that is what your question is.


With respect to the balance-of-payments gap, we are still in an
earlier phase. Bear in mind that these are estimates for the balance
of the year. So these are numbers that have to be forthcoming during
the year. They do not have to be forthcoming today.


I would be reasonably hopeful that we will be getting financing of
this order of magnitude.


MR. LINN: Let me maybe just add, also, one of the pieces of feedback
we got yesterday was that there is a general sense, which we also
share, that these are probably low estimates, and as we refine them,
as we are now doing country by country, that these estimates may well
become higher.


But perhaps more importantly, it is also becoming clearer that the
economic impact in the countries concerned is potentially quite severe
in terms of the impact on private business. If a business loses 20
percent of its exports and trade opportunities, that may be the
difference between staying in business or going out of business, and
then, of course, the impact on employment, on
the economy as a whole can be much larger than just the 20 percent of
trade, which we have initially focused on.


So there are dynamic effects and threshold effects which can make, as
this works through the economies, the impact on the economies, on
employment, ultimately then on the budget, and balance-of-payments
also more severe.


We are now, country by country, looking at this in greater detail,
particularly as we prepare for the country-specific donors meetings,
and we will update our estimates as we go along. I just wanted to
indicate that that is the nature of the data, indicative and
preliminary, as I think the paper makes very clear.


QUESTION: I do notice from the numbers in here that $800-and-something
million. will be needed for this year if the crisis finishes soon.
Well, we are already beyond that, if we add up the numbers that you
were just giving us, with $750 million for Bulgaria, plus, plus.


Is there a concern that even with all of these donor meetings going on
that the money is going to run out faster than the problem can be
resolved, and is this going to be a bottomless pit? I know no money
was pledged yesterday, but is there a sense that people will be
willing to step up with huge sums, if this gets to be the size of
Bosnia or worse?


MR. LINN: Let me just clarify the number I gave you before. It was the
total amount pledged not specifically for dealing with the Kosovo
impact, but the total amount pledged in support by all donors for
Bulgaria. So there is a total number, not the specific Kosovo
response.


I think, in terms of a bottomless pit, the needs are clearly large. In
particular, once you include the reconstruction needs of Yugoslavia
and also of Kosovo, they will be very large, and the countries
themselves in the first instance and the donor community will have to
deal with the challenge that we face.


In the immediate future, the needs are the needs of the refugees,
which on the financial perspective at least seem to be doing
reasonably well. But beyond this, we have to keep an eye on the
economic and balance-of-payments and budgetary impacts, and between
country-specific adjustment and our own support have to do the best we
can.


MR. DEPPLER: You have to realize that there are very different issues
between refugee costs and economic impact costs and reconstruction.
The really huge bills are going to be in reconstruction, but this is
down the road. We have to have peace before we can think of
reconstruction.


In terms of the refugee costs, my sense is the support there is
tremendous, and I have no concerns.


One of the purposes of our analysis was to bring out that the economic
disruption is costly. These numbers may seem low, but I point you to
the last paragraph on page 8, which says that the effect on output in
the countries affected is 5 percent of GDP. Now, that is not a trivial
economic impact. So these indirect effects of the crisis are quite
severe, and one of our purposes
behind this work has been to alert the community to these costs and
the need to generate the financing required to cover it.


I would be reasonably optimistic from the soundings yesterday, at any
rate, that this will be forthcoming, and I still take Johannes' point
that these are scenarios based on certain assumptions.


Developments over the past 2 weeks make Scenario B pretty irrelevant.
Scenario A is much more of the central case, and it was not originally
designed as such.


QUESTION: The Europeans this week have been talking about an estimate
for all costs, including reconstruction of something along the lines
of $30 billion. Do you have an idea of how accurate that number is or
how reasonable?


MR. DEPPLER: I do not. I do not.



MR. LINN: I think it is premature, frankly, and we have not done the
homework. We have concentrated on the limited exercise that we have in
front of us and on the immediate support for the countries by
designing some of the programs that I mentioned before.


I think now that we have a mandate to work closely with our European
partners, especially the EU on the broader and longer-term
perspective, we will start doing so.


Let me maybe also say, of course, that infrastructure, as Michael
said, is where a lot of the long-term costs will be, but at the same
time, some of that cost can probably also be borne by long-term
credit. So it is not that these kind of investments will require, say,
concessional funding up front, like grant-based funding, like refugee
support and so on.


So the budgetary impact on the taxpayers that was mentioned before in
the donor countries will also be different, depending on the financing
modalities. So I would hope that also will be an option that we can
then draw on to facilitate the financing.


QUESTION: My question may be directed to Mr. Deppler or Mr. Linn. We
particularly welcome the regional perspective that you are developing,
and in terms of our own work within the trade union movement, we are
encouraged by the fact that Montenegro has distanced itself from the
conflict and has from our point of view a good track record in terms
of governance, in terms of civil society, participation, and attempts
to build up a democratic institution. Yet, it is suffering economic
hardship and political pressure because of its precisely distancing
itself from the conflict.


I note that it is included in the table on the last page. Our question
would be: What is the sort of treatment for that particular subregion,
let's say, and in terms of the figures, an assessment of the economic
hardship, and how does it fit into a sort of short-term treatment in
terms of support, in terms of economic support?


MR. DEPPLER: I heard you refer to Montenegro, and I should be clear.



First of all, we do not cover Montenegro in this table. There is a
footnote, but it is not part of the analysis.


Montenegro is part of Yugoslavia and, hence, is not a member of the
Bretton Woods institutions. So it is not part of our analysis.


It is a somewhat independent part of Yugoslavia, and we have had sort
of informal contacts with some of their people over the years, but
there is no formal relationship. Both of our institutions cannot
really operate in these countries until some regularization is
undertaken with respect to these countries.


MR. LINN: I would like to just add that yesterday's discussion did not
specifically refer to the case of Montenegro. But we were asked, as
part of the medium-term perspective, to look at what will be the
reconstruction and refugee return needs for Kosovo and to have the
longer-term regional perspective for reconstruction and development of
the region.


My expectation would be that as one looks at this, one would also look
in terms of the impact assessment and in terms of reconstruction and
assistance needs. And ultimately, to an extent, one will, of course,
include also consideration of Montenegro in an assessment of the
overall situation in the region. That would be in the initial part, I
expect, of our contribution. That does not, of course, prevent
bilateral donors from providing assistance. As I understand, some
donors have been at least contemplating providing direct assistance to
Montenegro. But as Michael said, we at the Bretton Woods institutions
are not able at this juncture to operate in or directly support
Montenegro.


QUESTION: Thank you. Who is nominally organizing the donors meetings,
and broadly speaking, who will lead the coordination process? Is it
the European Union or the World Bank or who?


MR. LINN: The country-specific donors meetings are currently co-hosted
and co-organized by the European Union and the World Bank under the
umbrella that Michael explained, the G-24 process.


MR. DEPPLER: Could I explain? Let us be clear. This is the Brussels
G-24, not the IMF's G-24.


MR. LINN: The regional meetings, the regional information meetings
that are currently associated, as in the case of the Bulgaria country
meeting and then the forthcoming Macedonia country meeting, those
regional information meetings will also be organized by the EU and the
World Bank.


The meeting that we mentioned that is planned for May 27 in Bonn, I
believe, will be organized by the EU presidency, Germany, under the EU
umbrella, but the international financial institutions will be
invited, as I indicated at yesterday's meeting.


The EU and we and the Bank will be discussing starting today how we
can in preparation for the May 27 meeting and beyond respond to the
effective mandate that we received yesterday to jointly organize the
assessment and donor coordination efforts on a region-wide basis. We
have not yet gotten specific plans, but we will develop those quickly,
and we will, of course, use these country-specific meetings, as I
mentioned earlier, as a vehicle to move the region-wide process also
forward.


So we see those two tracks moving in tandem, with the World Bank/EU,
EU/World Bank in the lead role.


QUESTION: I guess these figures are just for 1999. Did you put
together any sort of guesstimate as to how many years you are going to
need to give assistance for humanitarian and economic impacts and what
the total number might be? Maybe the
previous crisis in Bosnia would give you an idea of how long you have
to have and what the total might be.


MR. DEPPLER: Let me go back to that previous question about the very
different economic implications of the refugee costs, economic impacts
and reconstruction.


The refugee costs. I would emphasize that refugee costs are going to
escalate sharply if we get into the business of trying to house
refugees through the winter. Starting in October, you can no longer
live in Northern Albania and Macedonia in tents. So these things will
evolve over time as well.


Coming to the economic disruption, it depends very much on what
happens to the peace process over the next few months. We are seeing a
large negative effect right now, but if the war is over soon, you
could see a substantial reversal of these negative effects. Indeed,
for a country like Romania, depending on what happens to Yugoslavia,
there will be significant positive effects because the reconstruction
will be a boon to Romania in the next phase.


So it is a very dynamic process, what the needs are, and at this
juncture, it is just too early to conjecture about what happens on the
politics to be thinking these things through in any detail.


QUESTION: Just want you to clarify farther the whole concept of using
the G-24 process for this coordination. Does that also mean that there
would be countries like the United States who would also be making
bilateral contributions on their own? I mean, can you just explain
about the nitty gritty of the money?


MR. DEPPLER: The G-24 process was something that was launched to deal
with the balance-of-payments needs of the transition economies. It
goes back to 1990 or 1991. Much of the bilateral aid funneled to all
the Eastern European countries
was coordinated and put together through the G-24 process, and this is
indeed still a vehicle that is in place, chaired jointly by the Bank
and the EU Commission. That is working on the CGs right now for
Macedonia and Bulgaria and so forth.


This has been a useful vehicle, and the idea is an adaptive G-24
process. You may want to add countries. There will probably be some
number other than 24 at the end of the day, and we need to sort of
work through the implications of that, but the idea is to use that
vehicle which has worked well.


And possibly, I heard the French, for instance, and another Chair
yesterday say that the experience on the coordination in Bosnia had
worked well also, and countries are looking for some vehicle which is
adapted to the situation and will work.


I think the precise modalities clearly need to be worked out in
detail, but the general sentiment at the meeting yesterday was to
build on this platform, and I heard Mr. Wolfensohn and Mr. de Silguy
at the end of the meeting sort of agree that they needed to meet at an
early date. So that gives you a sense of movement in this direction.


MR. LINN: Just to clarify, the U.S. and Japan and all other major
donors are part of the G-24 process. So it is basically a shorthand
for saying the major European, U.S., North American, and Asian donors,
mostly Japan, get together to discuss the finance and reconstruction
needs of a particular country concerned, make their pledges of
support, both balance of payments, but also investment needs, and then
that is the base on which each individual bilateral donor, but also
we, can operate in assisting the coordination and implementation. We
then build on the implementation process to assure that the needs are
being
met.



QUESTION: Can I ask Mr. Deppler--in the meeting last night and also in
this paper, there seems a heavy emphasis on the need for bilateral
donors. Is that an indication perhaps of the financial stress that the
Bretton Woods institutions are under right now?


And was there any sense out of the meeting last night that there is
any sort of discomfort at all from the donor countries about the scope
of what they are going to have to pay, in that there is going to be
significant impacts on their own budgets?


Also, Mr. Linn, if I could just ask you, does this scenario that has
been drawn up take into account the rather sketchy, at this point
anyway, plans for an oil embargo or blockade by the NATO countries?


MR. DEPPLER: On your first question, we are dealing with pure external
shock on countries who have a relatively low capacity to pay in terms
of per-capita incomes and so forth. Therefore, there is widespread
agreement that much of this aid has to be on highly concessional
terms.


The Fund is not the best institution for that purpose. It is not
particularly designed for that purpose. We are going to use the
instruments that we have, particularly ESAF, to provide some of the
aid, and we have plans afoot for negotiations. We are negotiating with
all of the countries currently, but at the same time, there is a
recognition that there is a need for bilateral
concessional support in this circumstance, and this is why there is
that emphasis.


Now, I did not hear any resistance to that notion, but I did also hear
fairly clearly that those countries are also looking for the Fund and
the Bank to be very much involved in this process.


MR. LINN: I do not think the orders of magnitude that we are talking
about are such that they, per se, stress the financial capacity of our
institutions or, for that matter, that they should present
insurmountable burdens on bilateral donor budgets.


I think the recognition yesterday was that this is a very urgent
problem that is of immediate importance to many of the donors in the
region, and indeed internationally. Like Michael, I did not sense any
reticence about making this a high priority, moving forward.


So I think we can be all hopeful that there will be a strong response
among donors. We in the institutions are also responding strongly, as
I already indicated. And I am reasonably hopeful that if peace returns
then we can see a replication of what I would regard as a very
successful experience in Bosnia-Herzegovina. So I think we have a good
model on which we can build, and I
would hope that the peace process allows that.



On the oil question, I think the simple answer is no, we did not take
that into account.


QUESTION: A follow-up to the oil embargo question. Do the neighboring
countries bring that up, given that some of them have already turned
off the tap? Romania is one. Do they talk about compensation from the
European Union countries or even a specific deal at the end of the
conflict?


MR. LINN: It did not come up yesterday, and I have not heard it
specifically mentioned, at least in conversations with us.


MS. WHITE: If we have no further questions, the embargo [on the
report] will be lifted at exactly 10:00. Thank you for coming.


(End transcript)