Conference in London takes stock of achievements and discusses challenges ahead
Adding a focus on policy reform to its operations as a leading investor in the countries where it operates, the EBRD in recent years has intensified its support for the establishment of Investment Councils as platforms for dialogue and problem-solving between governments, businesses and experts.
The Investment Councils are advisory bodies that aim to improve the business environment in their countries.
As the EBRD’s Transition Report 2013 Stuck in Transition? showed, the establishment of effective institutions and the creation of an environment which is supportive of reforms are key conditions for the successful economic transformation the EBRD is promoting.
Following this the Bank launched a far-reaching Investment Climate and Governance Initiative in 2014 with the objective of complementing investment projects with more concentrated efforts to improve economic governance through policy reform engagement. The EBRD adopted a flexible approach tailored to the specific needs and demands of its countries of operations.
One important element of this work is to expand Investment Councils which today have been established with EBRD involvement in Albania, Armenia, Georgia, the Kyrgyz Republic, Moldova and Tajikistan. The councils are supported by the Central European Initiative, Italy, the United Kingdom Good Governance Fund and the EBRD Shareholder Special Fund as donors.
Representatives of these Investment Councils, government representatives and EBRD staff came together in London this week to discuss achievements to date and challenges ahead. In addition to the six EBRD-supported Investment Councils the establishment of similar bodies in Bosnia and Herzegovina as well as in Bulgaria is currently under preparation.
EBRD President Sir Suma Chakrabarti underlined the importance of the Investment Councils’ work and said: “Public-private dialogue can take various forms. However, in order to have systemic impact, such dialogue needs an established, trusted platform. That platform should be a forum for regular meetings between the authorities and the business community, one at which businesses can air their concerns and the government can respond in a credible way.”
Evidence suggests that with this approach the Investment Councils have made a real difference. Their work has led to measurable improvements such as a stronger performance of countries in the World Bank’s Doing Business report. Since their establishment Investment Councils have supported the creation of business-enabling environments, for example by promoting better diagnosis of investment climate problems and improved policy design and by strengthening the position of reform-minded politicians within governments.
Investment Councils also serve as an important linchpin bringing together the administrative work of governments with the needs of the private sector. Using the expertise of businesses allows for the enhancement of the coordination and prioritisation of government decision-making and the effectiveness of governance.
In line with its mandate the EBRD pays great attention to ensure the Investment Councils are open, transparent and effective institutions which allow private sector organisations to have a say in the decisions that affect them. The Bank also attaches great importance to the inclusion of small and medium-sized enterprises in this process. In many countries where the EBRD invests they form the backbone of their economies.
In its new transition concept, launched at the beginning of the year, the EBRD identifies six transition qualities: the Bank believes that a well-functioning market economy should be competitive, well-governed, green, inclusive, resilient and integrated. Well-governed is the attempt to improve the quality of the state and private institutions and ensuring that they work well together. The Investment Councils play an important role in this effort.