The EBRD has an “enormous job” still to do in its existing countries of operation, the bank’s president said in a strong indication the lender is looking to halt the expansion that it saw it add six countries in Africa and Asia in 10 years. Suma Chakrabarti told Global Markets that the bank needed to do more to ensure that the rewards of growth in countries where it lends money were more equally shared as part of its inclusive growth agenda.
However, he admitted that the only element of that new agenda where it so far had pronounced success was encouraging women into business.
In an interview to set the tone for the annual meetings that begin today (Wednesday May 10), Chakrabarti said he believed it had made a substantial contribution to development in the four south east Mediterranean (Semed) countries of Egypt, Jordan, Morocco and Tunisia. The bank is expected to begin operations in Lebanon imminently.
But he went on: “We have an enormous job to do in our existing 36 countries of operation. Some of these regions are new to us like Semed as well as Greece and Cyprus so we have a mammoth challenge to fulfil already.”
Since Sir Suma was elected to take on another four year term in 2016, there has been speculation that the Bank might look to take on countries as far flung as Cuba and Myanmar within its ambit.
The EBRD is using the annual meetings in Nicosia to push initiatives to boost inclusive growth and ensure that the prosperity that has come to EBRD’s region since the end of the global financial crisis is more widely shared.
The bank said its investments and support for policy reform are aimed at delivering greater economic integration of three core groups that regularly remain on the margins of economic progress: women, the young, and people living in remote areas.
“Although we have been talking about these things the only area we have really done well on is women in business and it is now time we need to be serious about these other issues too.
“We are looking to widen that so now are talking about youth unemployment in many countries both in the Balkans and North Africa where it is a difficult issue economically socially and politically so we want to attract more young people into the labour market and into jobs, getting their skills updated and matched with what the economy needs.”
Refugee crisis
One of its priority areas in terms of social exclusion is helping to deal with the arrival of refugees from Syria and other war zones in Africa and Asia. The Syrian conflict alone has seen 5m people flee to countries including Turkey, Jordan and Lebanon.
“We have heavily invested in municipal services to deal with this huge influx of refugees,” he said, adding that his strategy of focusing on small and medium sized enterprises would help create jobs for young refugees. “That sector has to grow to absorb the extra labour that’s there whether in southern Turkey or Jordan.”
Chakrabarti will use the meetings to highlight how successful it can claim to have been, both in terms of results on the ground and its financial performance. “We want to showcase at the annual meetings that the EBRD itself has had an extremely successful few years in a time when other multilaterals are struggling to make money because emerging markets have become tougher.”
The EBRD has recorded two successive years of record investment of €9.4bn in 2015 and 2016 and a 25% jump in profitability to €1bn in its latest year. This contrasts with the $34m loss racked up in 2016 by the International Finance Corporation, the private sector-focused arm of the World Bank.