57462
               FYR MACEDONIA: COUNTRY PARTNERSHIP STAREGY

                               CHAIRMAN'S SUMMING UP

                                Meeting of Executive Directors
                                      October 21, 2010


   The Executive Directors discussed the Bank-IFC Country Partnership Strategy (CPS) for FYR
Macedonia (R20 10-0228[IFC/R20 10-0330]; 11-2).

    Directors commended the progress made by the country in its macroeconomic performance and
the Government ownership of the CPS. They noted in particular the Government's effective
management of economic policy in the context of the financial crisis. However, Directors highlighted
that challenges remain, including accelerating growth, boosting job creation and reducing poverty.
They also urged the authorities to maintain caution in economic policies given the difficult external
environment. In this regard, Directors were pleased to note the authorities' commitment to an agenda
focused on competitiveness and inclusive growth.

    Directors broadly supported the objectives and flexibility of the CPS with its focus on faster
growtlllil!<ljobcreation.~oI11e ofthem,ll()we"er,noted   thelack of tangible improvements in living
standards and continued social disparities. They suggested more selective interventions to ensure that
support under the CPS will make future growth more inclusive.

    Directors welcomed deepened reforms in social safety nets, with a particular focus on the poorest.
They emphasized the importance of access to and the quality of education at all levels. Directors also
noted the importance of climate related pressures and welcomed the focus on this emerging challenge,
beginning with better understanding and preparation for impacts in a range of areas, including
agriculture. Many Directors welcomed the Bank Group's plan to support the Government with
analytical· services, particularly on safety nets and labor markets. There was also concurrence with
lEG on the need for a better integration of the results framework and for it to include monitorable
outcome indicators.

    Directors noted FYR Macedonia's strong performance in business environment indicators and
emphasized the Bank Group's role in supporting the continued improvement of the business climate.
Directors welcomed growing collaboration between the Bank and IFC but urged further efforts to
seize potential opportunities from better World Bank Group coordination. They encouraged IFC to
promote investments in competitive sectors.

   Finally, Directors underscored the importance ofthe Bank to continue to play an important role in
supporting FYR Macedonia's EU accession and urged continued close cooperation with the EC,
EBRD, and other donors in the country.