EBRD President leads delegation to IMF/World Bank meetings

By Anthony Williams

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EBRD President Sir Suma Chakrabarti and a senior EBRD delegation will attend the October 10-12 meetings of the World Bank and International Monetary Fund that are being held in Washington D.C. against a backdrop of continued geopolitical tensions and a fragile economic recovery.

Among other meetings, the President will join the heads of Multilateral Development Banks, the UN Secretary General, and Finance Ministers and Central Bank Governors in discussions that will include an update on their progress in contributing to the financing framework to support new Sustainable Development Goals to be adopted by the United Nations in September 2015.

The EBRD, the European Investment Bank and the World Bank Group, will report on the strong contribution from the three institutions under their Joint IFI Action for Growth in central and south eastern Europe.

The Action Plan was launched in November 2012 with a pledge to make a joint financial contribution to the region of €30 billion by the end of this year.

During the Washington meetings there will also be a high level session of participants to the Vienna Initiative, the public/private platform that helps address challenges to the financial sector in eastern Europe.

Most recently the Vienna Initiative called for action to deal with the persistent problem of non-performing loans in the region and produced a series of recommendations to resolve the issue which is impeding growth in many countries.

Before the formal meetings, Sir Suma will make an address on 8 October to The Peterson Institute for International Economics, where he will assess the evolving role of regional development banks and how their contributions can be made even more effective.

A speech to governors of the Islamic Development Bank on 11 October will reflect on the extension of the EBRD’s activities to the southern and eastern Mediterranean following the political developments of the Arab Spring.

Since having received a mandate to invest in this region in 2012, the EBRD has provided €1.2 billion in financing to four countries – Egypt, Morocco, Jordan and Tunisia – and will soon have reached a portfolio of €1.5 billion, with a majority of projects in the private sector.

In all meetings and discussions, the EBRD President and other officials will report on the Bank’s vigorous response to challenges in EBRD countries of operations, where it has already invested a strong €4.5 billion in the first eight months of this year, largely in the private sector, and against an often difficult investment climate.

During this period, the EBRD has sharply stepped up its investments in Ukraine, and responded to strong demand from others countries where is operates. It opened a third office in Turkey, and also provided its first investment to its newest country of operations, Cyprus.

The EBRD’s latest economic outlook for the 35 countries where it invests predicts a sharp slowdown in average growth this year and only a modest recovery in 2015, reflecting in part the continuing tensions between Russia and Ukraine.

The new economic report sees growth in the whole region slowing to 1.3 per cent in 2014, from 2.3 per cent in 2013, with a pick up to just 1.7 per next year. This would mark the fourth consecutive year of regional growth below 3 per cent.

The slowdown in the Russian economy, under pressure both from sanctions imposed from abroad as well as from the counter sanctions with which it has responded, is affecting other countries in the region, particularly those that depend on remittances from workers in Russia.

As a result of the disruption to production and trade, agricultural losses and a partial military mobilisation, Ukraine is expected to suffer a sharp contraction of nine per cent in 2014

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