“We could all do with a strong shot of the spirit of 1989”

By Suma  Chakrabarti


Sir Suma Chakrabarti, the EBRD’s President, looks back at the 1989 revolutions in Central and Eastern Europe from the perspective of today.
 

 

 
Sir Suma Chakrabarti, the EBRD’s President, looks back at the 1989 revolutions in Central and Eastern Europe from the perspective of today.

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Where were you when the Berlin Wall fell?

At that time I was 30 but I was following events closely in the World Bank. The end of one-party rule and the command economy represented a triumph of freedom. I remember vividly the scenes of triumph, relief and elation. No one who lived through this period will ever forget it.

What was the most memorable moment of 1989 for you?

I would like to mention three events: The triumph of Solidarity in the first free elections in Poland, because it demonstrated how indefensible the old order had become. The cutting of the Iron Curtain between Hungary and Austria, because it punched a proverbial hole into what had seemed to be an unbreakable wall. And, finally, the demonstrations in Prague where tens of thousands of citizens jingled their key rings showing that they were not afraid anymore.

But the Ode to Joy did not last long…

No, the countries embarked upon the massive task of overhauling their political and economic system. They started a reform process of unprecedented depth and breadth with real determination and remarkable readiness to accept today’s pain for tomorrow’s gain. It was particularly welcome that the countries had an institution like the EBRD at their side which had been specifically established and designed to support the transition process.

Do you think the countries succeeded?

Remarkable progress has been made and 25 years on the countries can point to a long list of achievements: democracy, rule of law, market economies, freedom of speech and travel and all this crowned with accession to the European Union. However, transition has not been completed. The global financial crisis of 2008/09 revealed remaining big weaknesses and frailties that need to be addressed.

Do you fear some countries might be going backward?

Not necessarily backward, but what we have clearly seen is a slowdown or in some cases even a reversal in the convergence process. The danger we notice is that countries become “stuck in transition”. This is not just an economic phenomenon, it is also a question of the business environment, the institutional framework and ultimately of creating the conditions for the workforce to excel and the countries to succeed. 25 years on, we could all do with a strong shot of the spirit of 1989.

What is the EBRD doing to address these issues?

We do this by continuing to maximise transition impact. We are maintaining a high level of annual investment between 8 and 9 billion euros to address urgent issues as well as long-term challenges. Along with the projects come the policy dialogue and technical cooperation. What all this adds up to is the EBRD helping to build up resilience in transition countries, to integrate them better into the regional and global economies, and enabling them to tackle the challenge of creating a more sustainable future.

25 years on, what is your assessment?

My assessment is very positive. Historic progress has been made. Yes, a lot remains to be done. But I think the countries of the 1989 revolutions today are firmly rooted in Europe and they are aware that this is a mandate to deepen and strengthen the reform process. The EBRD remains committed to support this ongoing transformation.