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UN Office for the Coordination of Humanitarian Affairs

GUINEA-BISSAU: World Bank provides $13m to shore up broke government

BISSAU, 7 January 2004 (IRIN) - The World Bank has agreed to provide US$13 million of emergency aid to the cash-strapped transitional government of Guinea-Bissau to help it pay compensation for damage to private property inflicted during the civil war of 1998-99 and to finance a demobilisation programme for former combatants.

Part of the money will also be used to compensate depositors in a collapsed state-run bank, Banco International da Guine-Bissau.

The deal was announced by John MacIntire, the World Bank's director of operations for Guinea-Bissau, following a meeting with President Henrique Rosa on Tuesday.

The World Bank had previously said that it would not provide fresh aid for this small West African country until it had agreed on a new economic programme with the International Monetary Fund (IMF). The IMF stopped supporting the country in 2001.

However McIntire said the World Bank's position has softened following a presentation made by Rosa to senior bank executives during his visit to Washington in November.

McIntire congratulated the government on what he called its "courageous" decision to only pay public employees when they turned up personally at the bank to collect their salaries. He said this would help to combat corruption in the civil service, whose ranks are believed to be swollen by a large number of phantom workers, whose salaries have until now been drawn by other people.

Rosa, a respected businessman, was appointed transitional president by the army, following a bloodless coup on 14 September. The military intervention ended three years of chaotic rule by former president Kumba Yala.

Rosa's government has pledged to hold parliamentary elections on March 28 and presidential elections 12 months later. McIntire pledged that the World Bank would continue to support the new government that emerges from the March poll.

Themes: (IRIN) Economy

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