EBRD President Thomas Mirow on Thursday reinforced the Bank’s support for emerging Arab democracies, saying the international community could not turn its back on a new generation seeking the chance of a better life.
But he also warned that the process of change took time and said it would be wrong to build up false expectations.
In a lecture at the London School of Economics, entitled “Where next for the Arab Spring?”, President Mirow said there were similarities between recent events in the Middle East and North Africa and the revolutions in eastern Europe two decades ago.
The hopes voiced after the fall of communism were now being echoed in parts of the southern and eastern Mediterranean. “It is a call, just as in 1989, that the world cannot ignore,” he said.
The EBRD, encouraged by its shareholders to extend its remit to this new region, would play a role that matched its own expertise. It would focus on the development of the private sector and especially the creation of jobs, a particular issue given the very high levels of youth unemployment in the region.
The EBRD would be capable of investing up to around €2.5 billion a year across the four countries where it is now becoming active – Egypt, Morocco, Tunisia and Jordan -- and that funding would be a catalyst for private financing worth much more.
However, the President also stressed that the Bank’s experience of working in eastern Europe demonstrated the complexities of the process of economic and social change and he warned that expectations had to be managed.
“We know well, from our eastern Europe experience, that change – the process of transition – is a very long and winding road. It is better to be straight with citizens – telling them that jobs cannot be conjured up overnight but that real economic change requires patience and unfolds over generations,” he said.
The President said a signal did need to be given and the international community had to deliver on its promises, even during a time of fiscal austerity and constrained public and private finances. The alternative was that the current wave of optimism could turn to disillusionment and ultimately extremism and instability.
“Just as we did two decades ago, we need to convince people that for all the short and medium term pain, the long term gain is worth it,” he said.