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EIB Got the Leading Role in Infrastructure Development of the Balkans
The European Investment Bank has been mandated by the High Level Steering Group and the Stability Pact to co-ordinate the sector review process and assess projects in basic infrastructure. The Bank “is recognized that investments in basic infrastructure represent a key ingredient for economic growth”1. However, this type of reconstruction cannot be “a key ingredient for economic growth” even when countries, especially those affected by war, need to repair their infrastructure.
Bosnian case is a very illustrative example. All together, more than USD 5.5 billion has been invested in Bosnia and Herzegovina since the end of the war in 1995 and main goals of the reconstruction, such as self-sustaining economy, has not been achieved. The economic growth is still primarily linked to the reconstruction while the refugees and internally displaced peoples have not returned in numbers hoped.
Even if there is a proof from the ground that this type of reconstruction would not accomplish initial goals, the entire Stability Pact is based upon physical reconstruction. The Quick-Start Package of the Stability Pact consists of 35 projects with an estimated cost of EUR 1,1 billion. Transport; roads, railways, ports and waterways, and airports, accounts for 91 % of Quick-Start projects.
Although needed, infrastructure projects especially toll highways and airports would not bring benefits for local people. First of all, it is not reasonable to build toll highways in poor countries, simply because its citizens would not be able to afford it. Secondly, foreign companies in the most cases implement these projects and they would not bring positive effects for local people on a long run. It is true that jobs will be created, but only during the project implementation.
Another problem is that international financial institutions along with the EIB are mostly giving loans, not aid to the Balkan countries. This will worsen the debt problem these countries are already faced with. So, it is likely that Balkan countries will fall into the debt trap, the process which is going on in so called “developing countries”.
However, the region is important since the road, railway and electric power routes connecting Greece with the other EU Member States pass through the countries of the Balkan region and are retained in the European Union’s network of Pan-European Transport Corridors. Therefore, the major concern is that the EIB is concerned mostly on connecting EU members instead of considering solutions that would be the most favorable for the local population’s needs.
1 The European Investment Bank (EIB), Basic Infrastructure Investments in South-Eastern Europe; Regional Project Review, Regional Funding Conference for South-Eastern Europe, March 2000, Brussels