President Chakrabarti calls for “equal sharing of the fruits of growth”
The President of the European Bank for Reconstruction and Development (EBRD), Sir Suma Charkabarti, has opened a conference on “Reinvigorating Growth, Competitiveness and Investment - The EU from the Baltics, through Central Europe, to the Mediterranean” in Budapest today.
In his opening address the President underlined the strong potential of the countries where the EBRD invests and called on businesses and policy-makers “to realise that potential”.
He paid tribute to the achievements of the transition countries, but added: “We all know that the prospects for the world economy they are part of are not as bright as we would want.”
Persistent sluggish growth, a slow-down in productivity and weak global trade have negative impacts on economic performance which, in turns, leads to disappointment among voters who see themselves as the victims of this process.
President Chakrabarti conceded: “We are not blind to the flaws of globalisation as it has been practised in recent decades, in particular the way in which its benefits have been shared out unequally.”
However, the answer is not an end of globalisation, but a new and better concept which goes beyond competitiveness and also includes criteria such as governance, resilience, integration and impact on the environment when assessing the performance of an economy.
“The fruits of growth need to be shared out more equally if we are to avoid the sort of populism which will sabotage reforms – and hurt vulnerable members of society most of all,” the EBRD President said.
He warned: "It is very clear that there is a backlash against globalisation, and not just in the United States. We need to make it work better, so it is more inclusive. Many people feel left out. Abandoning globalisation is not the answer, adapting it is. If we do that, then with more growth, enhanced competitiveness and new investment, the EU countries where we work will secure their rightful place within the wider world."
The Hungarian Prime Minister Viktor Orbán spoke about the development of his country in the past six years and said the time when the transition region was attracting investment due to lower labour unit costs was coming to an end. The biggest challenge now was to find new ways of raising competitiveness in the face of global competition, for instance through reducing red-tape, low and simple taxes and improvements in education.
The conference also included a high-level panel with the President of Bulgaria, Rosen Plevneliev; the Vice President of the European Commission, Valdis Dombrovskis, and EBRD President Chakrabarti about growth, productivity and investment. This was followed by four panels on Finance: Equity as a Source for Financing Growth; Green Economy Transition and Growth; Infrastructure and Innovation; and Productivity Growth. The conference concluded with a discussion between Hungary’s Minister for National Economy, Mihály Varga and EBRD Chief Economist Sergei Guriev about “Growth and Inclusion – Lessons from 25 Years of Transition and the Road Ahead.”
Sir Suma Chakrabarti was joined in Budapest by a delegation of senior EBRD management led by Alain Pilloux, Acting Vice President, Policy and Partnerships and Vice President Designate, Banking; Jonathan Charles, Managing Director, Communications; Jean-Marc Peterschmitt, Managing Director, Chief Operating Office for Banking; Sylvia Gansser-Potts, Managing Director, Central and South Eastern Europe; Vedrana Jelušić Kašić, Director, Regional Head of Croatia, Hungary, Slovak Republic and Slovenia; and Graeme Hutchinson, Associate Director, Regional Head Hungary and Slovak Republic.