Economic Assistance 4 Project

closed

The main objective of the proposed Fourth Economic Assistance Grant is to assist Kosovo in the implementation of a structural reform agenda, aimed at enhancing medium-term macro-fiscal sustainability, sustaining adequate public service delivery in the face of declining donor support, and, promoting private-sector driven growth. The reform program to be supported by this grant works to achieve these objectives through specific reforms in the areas of budget management, and the business environment. In the area of budget management, the grant would support concrete measures towards improving the transparency, and accountability of public spending, as well as in the allocation of resources, in line with medium-term priorities. In the area o f private sector development, the grant would help to improve the business environment, by making further progress on the design, and implementation of the private sector regulatory framework, and taking steps to improve the efficiency of publicly-owned enterprises. Project benefits include, a stable economy, through the promotion of reforms which will enhance medium-term fiscal sustainability, and adequate service delivery. Second, the assistance to authorities will benefit an articulated, and mutually reinforced sectoral reform agenda, backed by a consistent macroeconomic framework. Policy measures to promote private sector development, and growth will be a key component o f the overall reform package. Nonetheless, there is considerable uncertainty about growth prospects, and, the macroeconomic scenario is associated with substantial risks. The basis macroeconomic scenario for a sustained rebound in growth, and living standards assumes implementation of a coherent medium-term program of institutional strengthening and reform; continued, well-targeted donor support for Kosovo; and, a relatively favorable external environment.