Kosovo joins IMF, World Bank amid independence row

Kosovo joined the International Monetary Fund and the World Bank on Monday, a little more than a year after its disputed independence from Serbia.

Kosovo President Fatmir Sejdiu and Prime Minister Hashim Thaci signed the institutions' articles of agreement at the US State Department, making the tiny country the 186th member of the Bretton Woods multilateral institutions.

The accession marks a milestone for recognition of one of Europe's poorest countries after its unilateral declaration of independence on February 17, 2008.

"We will do our best to be worthy to be equal to all of the rest of the world," Kosovan Finance Minister Ahmet Shala said at a news conference at IMF headquarters in Washington.

"For years we have had a dream to be equal" and membership "has made that dream come true," he said

"I believe with this membership more countries are going to recognize Kosovo," he added.

Since ethnic Albanian-majority Kosovo broke away from Serbia and became independent, 60 countries -- including the United States and 22 of the European Union's 27 member nations -- have recognized its independence.

Serbia and Kosovo's minority ethnic Serbs, backed by traditional ally Russia, fiercely oppose the secession as a breach of international law. The International Court of Justice (ICJ), the judicial arm of the United Nations, is considering the dispute.

"It gives me great pleasure to welcome Kosovo, the first new member to join the fund during my tenure," the IMF managing director, Dominique Strauss-Kahn, said in a statement.

"I am particularly pleased with the commitment of the Kosovar authorities to further strengthening the sustainability of their policy framework," said the former French finance minister, who took the helm of the IMF in November 2007.

The Kosovan finance minister said that more than 95 percent of Kosovans had voted in favor of joining the institutions.

A 50 percent tax reduction last year had helped double investment and the country was set for economic growth of "around 4.0 percent to 5.0 percent" in 2010, he said.

In response to a question about what immediate help Kosovo may seek from the two institutions, Shala said that "many projects are waiting for support from the World Bank."

Shala noted a privatization process was underway and the country was "working hard" with international partners, citing road construction projects.

"Kosovo is ready for investment," he said.

In an IMF staff report released last week, the multilateral institution projected annualized growth of roughly 4.0 percent in 2010 but warned of high downside risks from the global financial crisis to the country's "stable" banking sector.

"Many European banks have yet to recognize the full extent of their losses. Parent banks? deteriorating finances thus may still affect their subsidiaries all over Europe and, as a result, weigh on the economic performance of their host countries, including in Kosovo," the report said.

The IMF staff recommended substantial spending cuts to restore macroeconomic stability.

Kosovo's new rise in status on the international stage comes as Serbia pursues an advisory opinion on the independence dispute from the International Court of Justice.

The ICJ said on May 19 that it had received written statements from a total of 36 member states of the UN on the question.

The court has set July 17 as the deadline for states and organizations that have presented written statements to submit written comments on the other statements.