Latvia’s Cooperation with the World Bank

After times in Soviet Union Latvia again became independent in 1991. As a post communist country it had many problems to solve: inefficient and unstable economic structure; inability to compete in world markets; macroeconomic imbalances; rising rate of inflation; reforms of privatization; financial indiscipline in banks and enterprises; lack of experience in management of public finance. Thus WB and IMF helped to implement program of stabilization and structural reforms in Latvia a giving DEM 90.6 million Structural Adjustment Loan (SAL) and later after Russian crisis in 1998 the Bank also agreed with the Government on a Programmatic Structural Adjustment Lending Approach (PSAL), which aimed to restore growth, improve efficiency and performance of the economy, and help to achieve EU membership.
Latvia annulled its loan country status in the World Bank on 13 April 2007 participating in development cooperation, which is still a new activity in Latvia.
My aim of the work is to describe Latvia’s path in the World Bank as well as to understand Latvia’s role and impact in it.
The Structural Adjustment Loan (SAL) was a loan set in 1996 of about $50 million with closing date in 1997. The main objective of the SAL was to support the restoration of sustained growth and to improve living standards through structural reforms, thus developing private sector and making management of public sector resources more efficient.
The SAL program focused on: maintaining macroeconomic stability; expediting privatization and promoting financial discipline in banks and enterprises; and rationalizing expenditure decisions and strengthening the overall institution capacity for the management of public finance.…