Sir Suma Chakrabarti, EBRD President
University of Tokyo, Japan
Organised by University of Tokyo
It gives me great pleasure to be here today to talk to you about the Bank I have the honour of serving as president and about how you can help us change lives both in Asia and beyond.
Thank you all, and especially Professor Shiroyama, for the invitation to speak and for hosting us.
First, if I may ask, I wonder what the average age of the students here in the audience is.
If, by any chance, it’s 25 or thereabouts, then, congratulations, many of you are the same age as the European Bank for Reconstruction and Development, the EBRD.
We’re celebrating our 25th birthday next month in fact.
We were founded a quarter of a century ago to help build a new post-Cold War era in Central and Eastern Europe and what was then the Soviet Union.
And, right from the start, Japan has been part of the EBRD story.
It’s a founding member of the EBRD and one of our largest shareholders. (We only have 67 all told.)
Japan is also an extremely generous donor to the funds that help us carry out much of our work. In fact, it is our one of our largest bilateral contributors.
I hope that some of you here today will also play a role in further strengthening the relationship between the EBRD and your country.
I’ll return to that theme later but before I do I want to tell you a bit more about the EBRD.
The EBRD is a multilateral development bank. Like the World Bank and regional development banks for Africa, Asia, and Latin America.
We are owned by governments, 65 of them, plus the European Union and European Investment Bank.
But we are very different from other multilateral development banks in three ways that reflect the historical moment when the EBRD was created, the end of the Cold War.
First, we work only in countries committed to multi-party democracy, political pluralism and market economies. No other multilateral development bank has such an explicitly political and economic mandate.
What is important here is the direction of travel. A country has to be on the journey towards markets, democracy and pluralism. It does not necessarily have to have reached the final destination – whatever that would be for democracy and markets – to receive our support.
Second, our constitution lays down that 60% of our lending must be to the private sector. That figure currently stands at 80%.
No other multilateral bank, with the exception of the International Finance Corporation, an arm of the World Bank Group, has such a deep knowledge of working in the private sector for development purposes.
And third, we are project-based, providing loans and equity to corporates.
We do not, unlike the other multilateral development banks, fill budget or current account deficits. Because of our projects, we know a lot about sectors and companies.
We began operating in what had been the command economies of eastern Europe and the ex-Soviet Union.
But the transformations we helped bring about there were such a success that before long other countries wanted us to work with them too. And our shareholders were strongly supportive of our doing so.
So we are now investing in more than 30 countries, among them Mongolia, Turkey, Morocco, Tunisia, Egypt, Jordan and – temporarily – Cyprus and Greece as well as those we began working in 25 years ago.
As you can see if you look at the map of our countries of operations, we have a major presence in Asia.
We were pioneers a quarter of a century ago. And over the years we have helped shift thinking on development and lead the way in a number of important areas:
- leveraging the private sector to achieve development outcomes;
- devising financial instruments to build sustainable infrastructure;
- long running programmes to help small and medium-sized businesses, thus creating new jobs, enhancing skills and driving growth;
- sustainable energy, reducing waste and lowering carbon emissions; and
- promoting energy security based on the private sector and the blending of grants and loans.
We are a powerful catalyst for foreign direct investment and the channelling of equity and private financial flows into emerging markets.
And, yes, we are focussing on inclusion and bringing more women and other excluded groups into the workforce.
Over time we have also learned a lot about the role of an effective state in encouraging the development of open and sustainable market economies.
We now combine a private sector focus on financing and the delivery of development goals with extensive policy dialogue with the authorities in the countries where we work.
Improving the investment climate and standards of governance is, we now appreciate, absolutely essential for boosting growth.
The upshot of all this is that we are delivering huge impact on the ground.
Last year, notwithstanding the challenging environment for emerging markets, our investments were a record €9.4 billion and we financed 381 individual projects.
We were particularly successful at attracting additional finance for our projects from commercial banks, mobilising more than €2.3 billion via syndicated loans.
2015 also saw our shareholders approve a threefold strategy which puts us in a much better position to meet the challenges of the future.
We will focus on strengthening transition resilience by supporting policies that improve the investment climate and achieve greater social cohesion and inclusion.
We will promote integration by supporting investments that strengthen economic, financial and infrastructure links.
And we will seek to address global and regional challenges such as food security and climate change.
To that end we also unveiled our new Green Economy Transition approach, which envisages climate finance rising to 40 per cent of our annual investments by 2020.
Last year was also the year we adopted our first ever Strategy for the Promotion of Gender Equality.
There are many reasons why we now pay so much attention to gender.
One of them is quite simple. We realise that many of the goals we at the EBRD set for both ourselves and for the countries where we work will be far easier to realise if we can at the same time advance the cause of gender equality.
You, Japan and the EBRD
And this is where you come in.
We couldn’t achieve all these amazing results I have just summarised without having the best and the brightest working for us – both at our headquarters in London and in the countries where we work.
As of the beginning of this year we have 2,400 members of staff.
In fact, the EBRD is a whole multicultural world in its own right, with the people working for us coming from 65 different countries.
We are a bank, yes. But, as I hope I have made clear today, we are far more than just a bank.
Our financial results are important to us, of course.
But our real priority is investing in changing lives.
We recruit bankers, lawyers, economists and risk and procurement specialists.
But we are also on the lookout for public policy experts and people who can work with us to help the small business sector.
And many other specialists for a whole host of different roles.
We would very much welcome more job applications from citizens of a shareholder as important to us as Japan.
We already see ourselves as a natural partner for Japanese investors.
As of the end of last year, the value of joint Japan-EBRD investment stood at just over €8 billion, with EBRD finance accounting for €4.5 billion and Japanese investment over €3.5 billion.
Broken down by sector, that joint investment has been a little over €3 billion in energy; more than €2 billion in industry, commerce and agribusiness; €1.5 billion in infrastructure; and just over €1 billion in financial institutions.
We want to work even more intensely with our partners here on international trade, investment and procurement.
We want to work even more closely with Japanese corporates and financial institutions.
In fact, before I arrived here, I was opening our first ever Tokyo office. We hope it will provide a major boost to our business development efforts in Japan.
And, as part of this intensifying outreach to Japan, I very much hope that the country’s own best and brightest, young men and women such as yourselves, will give serious thought to working for us – as well as other international financial institutions.
A career in development
As a young man, I studied development economics myself and my first experience of working in the field was in Botswana.
I haven’t spent all my adult life in the development world.
But not for one moment do I regret my initial choice of specialisation.
Indeed, in many ways, now is a more exciting time than ever to be involved.
The Sustainable Development Goals adopted last autumn set out an ambitious but credible programme of change for the whole world in the years ahead.
But one of the intellectual satisfactions of working in this area is the way development thought and practice shifts over the years.
How it tacks from one end of the spectrum to the other.
When I spoke about development to your contemporaries at the LSE at the end of last year, I told them that we, the so called professionals, can’t know all the answers.
Sometimes I’m not sure we are even asking the right questions.
So we look to you, students especially but also academics or concerned citizens, to help us.
You can make a very real contribution to the development agenda yourselves.
It might be in the form of academic research that throws new light on the problems we come up against in the field.
And I hope you understand that there are many routes into the development project.
There is, of course, the way in via civil society, a very important partner of ours.
And you could work within government. If you do, don’t forget the state’s vital role in providing the right conditions for private businesses to thrive.
I am sure that some of you are considering another pathway, that of the private sector.
At its best, it generates wealth, creates new opportunities for men and women and fosters sustainable and resilient economic growth.
But, and here I revert to my role as EBRD President and development veteran, I do urge you all to give serious thought to a career with us.
I hope that I have conveyed some of the excitement I feel about what we do – day in day out - in Asia and beyond.
Our achievements over 25 years have been no less than inspiring.
Thank you very much for listening and I do hope that the next time we meet some of you will be working for the EBRD.