Sir Suma Chakrabarti, EBRD President
London, EBRD HQ
Investing in the Western Balkans Forum
Intensifying regional cooperation is one of the greatest achievements of this region
It gives me great pleasure to open the regional forum “Investing in the Western Balkans”. Its inclusive format – with all regional prime ministers in attendance - sends a strong political message of the newly achieved stability and maturity of the region.
Special thanks to the government of Croatia for the participation in this Western Balkans forum and its support to this region. Indeed, today’s all-inclusive meeting builds on the meeting between the EBRD and a number of Western Balkans prime ministers in Zagreb in 2010.
This region has been an important area of EBRD engagement since the early 1990s, when it embarked on the road towards open-market economies and democracy. Today, the EBRD remains one of the largest institutional investors in the region. In 2013 alone, the Bank invested over €1.2 billion in almost 80 projects in the Western Balkans and Croatia.
In implementing its unique transition mandate, EBRD is working both with the public and private sectors, and across all the economic sectors - infrastructure, energy, financial institutions – and with foreign and local private companies. The latter includes SMEs, which are the real backbone of this region’s economy and which provide the largest share of employment in the region.
The Bank has just approved a Small Business Initiative, which aims to marry money with the sort of expertise that businesses need to tap in to. The Small Business Initiative is designed to achieve maximum impact by combining financing and policy dialogue at country level, improved coordination between the international financial institutions in this area, and engagement of co-financiers.
We are committed to continue investing in all countries of the region and to supporting their economic development. At the same time, in coordination with the European Union, we seek to promote regional cooperation in the Western Balkans, which is indispensable for its sustainable development and stability.
Of course, international financial institutions are working together to support vital transport and energy linkages – and I will come back to this. But the regional approach also applies to pooling together co-financiers to create regional investment vehicles.
One example of such an approach is the new Enterprise Expansion Fund, which I will be signing later today with the European Investment Fund and Germany’s DEG. This fund is a critical component of a regional Western Balkans SME platform called the Enterprise Development and Innovation Facility.
We launched this Facility together with the EU, the EIF, donors and all countries of operations in the region, to provide SMEs with a complete toolbox of financial support, including venture capital, private equity and credit enhancement mechanisms for commercial banks, but also a comprehensive regional policy dialogue instrument.
Intensifying regional cooperation is one of the greatest achievements of this region, a demonstration of the new vision of its political leaders. In a few minutes you will be able to listen to each of the prime ministers presenting the priorities of their countries. We hope that their first all-inclusive meeting, here in EBRD, may pave the way to regular meetings in the future in order to further improve coordination of regional policies at the top level. EBRD will be happy to contribute in this direction in any possible way.
Some important steps have been taken recently to improve coordination between the IFIs and the European Commission. The operation of the Western Balkans Investment Forum shows that such an approach works well and produces results. More can be done to further improve coordination among recipient countries, as well as with respect to their joint role in prioritizing regional projects funded with the support of the EU, IFIs and donors.
The main objective of this conference is to promote the Western Balkans as an investment destination. During my first year in office as EBRD President, I had the opportunity to visit every country in this region. This is a truly fascinating region and there is a great deal of potential there, including, first and foremost, a well-educated population with strong skills and entrepreneurial spirit and a diverse range of natural resources. The EBRD “is a bank” and we would not have invested in this region so heavily had we not been convinced of its potential.
But along with significant potential for further growth I have observed during my visits a number of bottlenecks in infrastructure and the business environment. Ways of breaking down these bottlenecks will be the main topics of today’s forum.
Transport corridors and energy links are crucial for the development of the region. They can open up the free flow of commerce, increase competitiveness and opportunities for export growth. We would like to focus particularly in the forthcoming panels during today’s forum on the opportunities for involving the private sector in regional transport projects and on the challenges of energy diversification, including the role of new sources and routes of supply.
But neither improved infrastructure nor investment alone are sufficient. The business environment matters. For its part, EBRD is working on a set of activities to reenergise transition, drawing from the conclusions of our latest Transition Report titled “Stuck in Transition?”
Today, I have signed with Prime Minister Rama a pilot MoU for our joined efforts to push reforms in the judiciary, procurement, corporate governance and other aspects of the investment climate in Albania. The MoU envisages the establishment of an Investment Council, which will facilitate dialogue between representatives of the business community and government in an effort to develop a favourable, transparent and investment-friendly business environment.
In concluding, allow me to express my conviction that the representatives of the region will today, jointly, present a realistic and attractive picture of the business outlook for foreign investors in the Western Balkans.
I am certain that it will be particularly interesting for all of us, and particularly the London-based and other international investors, to receive these first-hand insights from the region. The EBRD certainly stands ready – as always – to help the Western Balkans countries and Croatia achieve their full economic potential.