IMF to admit Bosnia on Wednesday

Dec. 18, 1995
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WASHINGTON, Dec. 18 -- Bosnia-Herzegovina will be admitted as a member in the International Monetary Fund on Wednesday in conjunction with a donors meeting in Brussels, officials said Monday. Membership in the IMF allows Bosnia to immediately receive loans and aid from the World Bank and other multilateral lending institutions. The World Bank estimates Bosnia will need more than $500 million in emergency aid in the first quarter of 1996 to begin post-war reconstruction. IMF European Department Director Massimo Russo said Bosnia must first repay the IMF $37.2 million in arrears before it will receive a loan of $44.8 million. The Dutch government has promised to finance the debt repayment, Russo said. He promised the IMF will not hold up international reconstruction aid to Bosnia. 'We will not be the wagon that slows down the whole train,' he said during a news conference. Bosnia will enter the international lending institution, which subscribes annual contribution amounts to member countries, with a quota of $179.4 million. Russo said all of the IMF's discussions have been held with the Muslim-led Bosnian government and the self-styled Bosnian Serb republic initially would not be party to the agreement. He also confirmed that the IMF will name the next governor of Bosnia's Central Bank in Sarajevo. 'A new central bank will be created after parliamentary elections. At that time the IMF will name the governor, who will not be a national of the area,' Massimo said in explaining terms spelled out in the Dayton peace agreement.

The World Bank, which is hosting the Brussels donors meeting, estimates Bosnia will need at least $5 billion over three to five years in order to rebuild the war-shattered country. Nearly 50 countries have offered to provide emergency assistance but long-term financing remains uncertain since current pledges amount to less than 40 percent of the estimated bill. Multilateral lending institutions in Europe and the Middle East will be asked to help make of the difference, Russo said.

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