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Donors have been highly responsive to the needs of the Region and their support is
tailored to each country to take account of the phase that each country is passing through. For
example, donor support for reconstruction and reform in Bosnia and Herzegovina peaked in the
years after the Dayton Agreement of 1995 and already much had been achieved by 1999, and
reconstruction needs were on a downward trend. In Albania and FRY Macedonia on the other hand,
the Kosovo crisis caused immediate and dramatic budget support needs and humanitarian needs
which the donors were generally able to come up with. Kosovo, another example, had substantial needs in 1999 and 2000 but already as budget systems
were being put into place and reconstruction needs being filled, demand and supply
has been on a downward trend.
Within the envelope of
overall assistance to the region ( in the order of €6-7.2 billion until
2005), donors
have started to focus increasingly on medium term
reconstruction and development assistance, as the needs for humanitarian assistance and
budgetary/balance of payments support have diminished. In
general, donors recognize that economic development, social inclusion
and regional stability in South East Europe hinge on the strengthening
of institutions, governance and a lowering in the level of corruption.
In the table below, the breakdown of donor assistance to the region
shows that considerable investments are being made both in the social
sectors and in government and institution building. By far the largest
amount of assistance, however, is being directed towards the
development of infrastructure (eg. roads, railways, electric power,
and water) which is crucial for economic growth in the region. In
addition, donors are active in supporting private and financial sector
development, to encourage the expansion of output and trade as well as
the development of sound banking facilities on which Small and Medium
Sized Enterprises (SMEs) depend.
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