Editor's Note Balkans Rehabilitation
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September 1999 World Bank AGM Issue Editor’s Note The environmental, social and other civic groups are Europe - in Prague. In order to help the World Bank staff concerned that the World Bank and other International and officials become familiar with issues in this region, Financial Institutions will repeat their previous mistakes we have described some of projects where the World Bank in decision-making about the Balkan region. Therefore works hand in hand with the national government to the NGOs decided to come together and develop successfully continue the practise of the previous guidelines for international investment in this region to Communist regime of ignoring of public opinion or ensure that civil society has a voice and an influence in environmental laws and regulations. the control of public funding. Other issues of concern are NGO and World Bank participation in the Prague- energy, particularly nuclear power, and transportation 2000 meeting will offer an excellent opportunity, not only projects. We refer you to details of specific projects to taste Czech beer, but also to monitor progress made by outlined in the articles printed in this newsletter. the World Bank in opening the funding process to public Please note that the World Bank Annual meeting in review and comment. The result will be a stronger society, September 2000 will, for the first time, be held in Eastern fuelled by a responsible, involved citizenry. Balkans Rehabilitation- new development or old mistakes? Immediately after the end of the NATO’s military goals of this process? What kinds of financial resources will operations in Yugoslavia, Western governments and donors flow into it and under what conditions? How can this process began estimating the war's impact and consequences on the lead to a system where there are no winners and losers? What region. Many strategies, priorities, policies and agendas now is the place of public opinion and how will the public be being considered will shape the future of millions of people consulted? living in this region. A few global players such as WB/IMF, Because of the complicated and rather contradictory EBRD and EU will implement the region’s macro-economic situation in the Balkans, CEE Bankwatch Network will restructuring process and sponsor a region-wide meeting determine the future of Balkans. of NGOs to discuss the current How will this be done? Are situation and possible solutions. the donors going to implement Out of the discussions Balkan the same "economic medicine" civic organisations can draw a they used in Bosnia- number of recommendations Herzegovina? --the same towards the International policies that led to the collapse Financial Institutions(IFIs). of the national economies, Civic organisations hope that the disintegration of the industrial following recommendations will sectors, deregulation of the trade be heard and heeded by the IFIs. regimes, and flood of imported Unified region. IFIs should commodities to further look at the region as a whole. destabilise domestic production? IFIs already have plans that Will they break up integrated consider so-called "waves" of systems of public transport and countries according to their construct new motorways? Or is degree of affliction by the war. it possible that the interests of Such differentiation is based on the Balkan countries and their political and economic people will be taken into account favouritism. This approach can by the global economic players? only lead to new conflicts. Balkan residents have many Principles that divide the questions such as: what are the countries into different CEE Bankwatch Network 1 categories, that are not based on the countries’ real needs, Sustainable development. With the sustainable and do not support sustainable development should not be development model, decisions are made with public used in the process. A unified approach is crucial for the participation, a new democratic legislation is built, and new political, economic and social stabilisation and development approaches for natural resource use are adopted. All the new of the Balkan countries. regional development sector programs should pass the The "Bosnia" syndrome. How will the IFIs avoid Strategic Environmental Impact Assessment procedures repeating mistakes such as Bosnia-Herzegovina, where huge before their approval. It is unacceptable that with public amounts of money were improperly used or simply money, IFIs are financing projects which conflict with local disappeared? There needs to be a clear mechanism for legislation and negatively impact the environment and the initiating, monitoring and evaluating projects and funding for population -- all under the guise of post-war reconstruction. the reconstruction process. This mechanism should be based Independent estimation. The damages from the war in on the highest standards, procedures and policies of the IFIs Yugoslavia will have long-term impacts, not just on the and should be open for public monitoring and control in territories and populations who were directly affected by the accordance with the Aarhus convention. The process also conflict, but also on the Balkan region as a whole. There should be easy to implement with as little bureaucracy as must be objective and independent estimates of the short- and possible and clear rights and responsibilities for the process long-term damages, in which NGOs and the public are facilitators. consulted. No one knows how the Balkan reconstruction Civil society participation. Democratic decision-making process will end. The issues are complicated and difficult. in the use of rehabilitation funds is critical for the economic, But the process does offer the IFIs an opportunity to correct political, and social relationships between the Balkan past mistakes and use their power to help build one stable countries. IFIs must seek input from the affected and integrated region in the Balkans. CEE Bankwatch communities, local authorities, NGOs, expert groups and Network urges IFIs to have the courage and integrity to use trade unions on what needs to be done and how it should be their power constructively. accomplished. They must work in a clear and transparent structure, adhering to their own policies and making NGOs Meeting on Balkan Reconstruction is organised from thoughtful decisions that include the rights and opinions of 8-10 October 1999 in Sofia. Results of the meeting will be civil society. available on www.bankwatch.org Energy efficiency funds unused in Ukraine Despite an investment offer of more than one billion the World Bank. Other projects were either postponed or dollars in energy efficiency and infrastructure improvements, cancelled. Ukraine has completed only two projects totalling 230 Why was this money not used? One reason can be found million USD in two years. The Joint EBRD and World Bank in the text of the Action Plan: "While the potential for cost- Energy Efficiency Action Plan was proposed to Ukrainian effective Energy Efficiency improvements is huge, the president Leonid Kuchma in January 1998. According to the current political, legal, institutional and economic Action Plan, the EBRD and WB would provide financing to environments in Ukraine are not always supportive of their start a comprehensive energy conservation program while implementation.” assisting the Ukrainian government The second reason is linked to to establish sound pricing policies the first: The government of Ukraine and financial practices. Dangerous Energy Efficiency still has its old habits, remaining Proposed investments included At last year's annual meeting of the from the Soviet times, of dealing installing gas meters, rehabilitating EBRD, CEE Bankwatch Network distributed with a few giant projects but not power generators, improving with numerous small ones, even if transmission and distribution copies of the "Joint EBRD and World Bank Energy Efficiency Action Plan" in order to they are more effective. Intent on systems, rehabilitating district constructing the controversial heating, developing energy service highlight the initiatives of the two IFIs in the nuclear reactors known as the companies, and upgrading systems energy sector. This Action Plan was signed K2/R4 project, the Ukrainian for large-scale industrial consumers. by James Wolfensohn - president of the government is blind and deaf to any Because Ukraine imports World Bank, and Jacques de Larosiere alternative energy proposals. substantial amount of its energy and president of the EBRD. Representatives from What should the World Bank needs 4 to 10 times more energy the Ukrainian government were not and EBRD do with the Action Plan? than other industrialised countries to enthusiastic about this information effort, First of all, they should develop produce a unit of GDP, this was a however. Security police confiscated all similar proposals for other CEE significant opportunity. Rather than copies of the Plan and halted its distribution. countries. At the same time, the beginning negotiations immediately banks should be firm in promoting to implement this Action Plan, the energy efficiency in Ukraine Ukrainian government has developed only two projects in through both lending and advisory services. nearly two years. The first one is an EBRD loan (30 million USD) for establishing UkrESCO. The second is a 200 million USD loan for Kiev District Heating Improvement Project by The text of the Action Plan can be found at http://www.ecn.cz/K2R4/eeplan.stm 2 Mail, World Bank AGM Issue, September 1999 EIA?