The financial crisis has taken a staggering economic toll globally, but it has been the Europe and Central Asia Region that has felt the hardest blows. The Region has suffered an 11 percentage point decline in GDP growth from 2007 to 2009, and an average fiscal deterioration of 5 percent of GDP – the largest declines of any other region.
Countries within the region are turning to the World Bank for assistance in dealing with the hits to their economies, resulting in historic levels of lending to the region – what were average lending amounts of $3.9 billion per year throughout FY00-08, evolved into $9 billion in FY09 and projected around $11-13 billion in FY10.
With 2010-13 economic growth projections lower for Europe and Central Asia (less than 4 percent) than any other region, the post-crisis financing demand in the region is estimated at $6-7 billion per year – about 50 percent above pre-crisis levels. With resources stretched thin, meeting this demand will only be possible if there is an increase in resources.
Countries in Europe and Central Asia – Armenia, Croatia, Georgia, Kazakhstan and Russia –recognize this strain, and are voicing their support for a capital increase for the World Bank. Here are some examples:
Armenia
"To meet our development goals we need to step up our public investment effort now, despite the impact of the crisis—with the prudence that has always been the cornerstone of our fiscal policy. The World Bank’s regular financing window (IBRD) provides to Armenia a unique opportunity to meet this challenge." More
Croatia
"Cooperation with the World Bank (International Bank for Reconstruction and Development) is of exceptional importance and we value the Bank’s support from the very beginning of this cooperation and the very first approved project – the Emergency Reconstruction Project, as it duly recognized the specific need of the Republic of Croatia and adapted its instruments accordingly." More
Georgia
"Georgia has had quite difficult years from an economic point of view. In the past years, however, there was very important support from The World Bank, especially this IDA program, that have changed Georgian economy. Right now we are on the rise, right now economy is recovering and one of the main reasons for this recovery can be said to be IDA. It is the projects that we need to develop in future for this growth to be sustainable for long term sustainability. We definitely need IDA."More
Georgia
"The World Bank Group has always been outstanding with its efficient and demand-oriented approach. The substantial WBG resources have been allocated for physical and social infrastructure projects, as well as providing significant financial assistance for mitigating the short-term impact of the crisis. It makes the WBG one of our most reliable and long-standing partners." More (.pdf)
Kazakhstan
"In the past two years Kazakhstan, like many other countries, has significantly expanded cooperation with the World Bank. Going forward, we intend to continue drawing on the Bank's analytical and financial resources to support our reform program and facilitate recovery from the crisis. Therefore, to accommodate our growing demand for Bank financing, the Republic of Kazakhstan expresses its support for the current initiative to increase the capital of the World Bank." More
FYR Macedonia
"The World Bank proved to be a loyal and dedicated partner over the past 17 years, and made an exceptional contribution to the country’s transition and development by providing strong financial and advisory support. In order for the World Bank to continue playing such an important role in my own country and the whole region, it is crucially important that an appropriate capital increase is secured." More
Moldova
"I would like to emphasize our appreciation for the close partnership Moldova has enjoyed in past two decades with the World Bank and the International Development Association. We call on donor countries to generously support IDA in its current round of replenishment, so that IDA can continue to be a strong partner for developing countries like Moldova in their efforts to achieve the MDGs. " More
Russia
"This year, the Bank will set a record for investment in developing countries. To sustain its vital role, it is working with its shareholders to strengthen its capital base. A well-capitalized World Bank leverages all its shareholders’ investments by pooling them and then raising five times the capital by borrowing in financial markets. It then uses these funds in cooperation with aid partners, old and new, public and private." More
Serbia
"After a rainfall of trillions for domestic financial institutions, the world balks at solidly capitalizing the World Bank and the IBRD, even when their mandate fits circumstances perfectly." More
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