• Pre-Membership Phase. The former Socialist Federal Republic of Yugoslavia (SFRY) ceased to be a member of the World Bank Group in February 1993, and FRY has so far not yet become a member in the World Bank Group organizations. As a first step, once the new government has expressed its interest, the Bank would initiate preparations for FRY’s membership by assessing the economic situation and exploring with the government options for the settlement of the US$1.7 billion arrears which FRY currently owes to the World Bank. Bank membership could occur only after membership in the International Monetary Fund (IMF) and after a plan for settlement of arrears has been agreed upon.
  
  During the pre-membership phase, the Bank would expect to provide analytical and advisory support to FRY, in partnership with the European Union, the IMF, and other international partners and in connection with the South East Europe Stability Pact. This support would focus on preparing an assessment of the reconstruction and development needs of FRY and on mobilizing and coordinating assistance for FRY jointly with the European Commission. In parallel, the Bank would also work closely with the government to develop a sound structural and social reform program for the medium term. The preparation of membership of FRY in the Bank will likely take some time and no regular Bank loans could be made available to FRY during this phase. The Bank would also explore setting up and administering donor trust funds as a way to provide financial support to FRY in advance of membership.
  
• Post Membership Phase. Once FRY’s membership has been approved by the Bank’s Board and until arrears have actually been settled, the Bank could continue to provide advisory and aid coordination services, as well as administering trust funds. Once arrears are settled, the Bank could also provide new financing. While there will be important requirements for physical rebuilding and reconstruction, the Bank would expect that a key part of its role in a post-membership phase would be supporting the badly-needed structural and social reform measures the government will need to put in place to achieve a lasting economic recovery and prosperity for its citizens.
  
  The Bank stands ready, at the invitation of the government and in coordination with other partners, to send a small team of staff on an early reconnaissance mission to FRY. This would be an opportunity to collect initial information and data and to plan with the government the objectives, scope, and next steps for possible fuller fact-finding and assessment missions which could take place thereafter, and which could begin to put into motion the above steps towards eventual membership of FRY in the World Bank.

Useful links: For more information about the World Bank’s work in Eastern Europe, visit http://www.worldbank.org/eca. For more on the Bank’s and European Commission’s activities in the Balkans, visit http://www.seerecon.org.

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