Sir Suma Chakrabarti, EBRD President
Conrad Hotel, Cairo, Egypt
Excellencies, EBRD Governors, Ladies and Gentlemen.
It gives me great pleasure to welcome you all to what is EBRD’s second Southern and Eastern Mediterranean Business Forum, held this year here in Cairo.
Thank you all for joining us today.
And thanks in particular to the Ministry of Investment and International Cooperation of Egypt and to Minister Sahar Nasr for everything they have done to make this event happen.
By now many of you are old friends.
But only two years ago, when we held the first of these forums in Skhirat in Morocco, we were still welcoming you and your countries as our new partners.
But now, at the end of 2017, we can, I hope, all agree that your region is well and truly part of the EBRD family.
The evidence for that is there for all to see.
Since we began our work here five years ago, at what was then a time of great change in the region, we have invested almost €6 billion.
The number of our projects stands at some 150.
And we have channelled more than €200 million of donor financing into the region in the form of technical assistance, co-investment grants and concessional loans.
Egypt, today’s host, is now one of the EBRD’s largest countries of operations.
And the other countries where we are active have, in their different ways, already proved themselves to be exemplars of our work to develop open and sustainable market economies.
Two years ago, we still felt ourselves to be newcomers in the region, well aware that we had a lot to learn from what were still unfamiliar surroundings.
We are still learning, of course.
But we are no longer the callow new kids on the block.
Our roots in the region we call the Southern and Eastern Mediterranean now run deep.
Today, only one of the world’s international financial institutions has offices in this region outside the capitals.
That IFI is the EBRD.
The EBRD which opened offices in Sfax in Tunisia last year and Tangier in Morocco and Alexandria here in Egypt earlier this year.
And, like any healthy family, we are growing.
Much is happening in our EBRD regions.
But two of the most newsworthy and significant developments in them so far this year have been the launch of our operations in Lebanon and the West Bank and Gaza.
Let me take this opportunity now to welcome them to the EBRD family.
Ladies and gentlemen, it should come as no surprise that more economies both in this region and beyond want to work with EBRD and benefit from the impact we can have on the ground.
Our unique mission to further the progress towards ‘market-oriented economies and the promotion of private and entrepreneurial initiative’ is as timely now as it was at our founding in 1991.
As that language implies, unlike most other IFIs, we work mainly with the private sector.
One of our great strengths, as I see it, is our mix of strong, commercial banking with active engagement in the areas of technical cooperation, advisory services and policy reform, all of them central to our work of investing in changing lives.
Another strength is the way, in the light of changing circumstances, we have updated our understanding of what a successful modern market economy should actually look like and which qualities it needs to display.
As of the beginning of this year we have defined the values that inform all our work, here and elsewhere, as follows.
A well functioning market-based economy needs to be: competitive, well-governed, green, inclusive, resilient, and integrated.
Ladies and gentlemen, today’s event is taking place under the banner of ‘Investing for Sustainable Growth”.
These six qualities I listed are all critical to the creation of jobs and growth.
They in turn encourage sustainability, itself a key ingredient in stability.
That is the focus of today’s forum and the discussions that will follow this session later on.
Allow me, however, to say a few words in general terms about the main challenges the region faces and how the EBRD can help you address them.
Note at the same time that we are already very actively engaged on all these fronts.
My list is not just good intentions.
It is a list of deliverables, of what we are working on now – although, together, we all need to do much more if we are to achieve the results required.
- First and foremost, we see a more developed and vibrant private sector as absolutely central to the region’s efforts to generate growth and create the jobs we just spoke of.
This is not just a matter of securing employment for a fast growing population, and for women and young people in particular.
It is also about relieving pressure on resources and services, such as land, water, energy, transport, health, and education.
The previous SEMED Business Forum two years ago had for its motto: Unleashing the Potential.
The potential we had in mind then was that of the private sector.
The fact remains that, for all sorts of reasons, firms in all of EBRD’s regions, including in this region, are still less productive than in advanced economies.
Our latest Transition Report, to be published next week and focused on ‘Sustaining Growth’, paints a more nuanced portrait of this phenomenon.
It shows that the productivity gap is particularly large for SMEs, a section of the private sector where we at the EBRD have particular expertise.
In other words, the disparity between SMEs in a region such as this and those in an advanced economy such as Germany is greater than the difference between their larger firms.
The Report also shows that small firms which become more productive create new jobs.
Hence the importance of SMEs to our work to boost employment creation and growth.
As witnessed by the way we have helped some 1700 SMEs in the region to date with almost €50 million of donor funds.
Three quarters of that sum has come from the EU, one of our most important partners, for which we are very grateful.
Many SMEs, however, fail to grow and innovate not because they don’t want to but because they continue to face major obstacles to doing so.
Now is not the time to dwell in detail on the obstacles as they pertain to this region.
But we know what they are, just as you do, and are working hard to remove them.
- Second, if we are indeed to achieve the sustainable growth proclaimed by today’s forum, that growth needs to be inclusive.
The benefits from reforms must be fairly and equitably distributed.
That includes improving the delivery of public services, promoting women’s economic participation, boosting productivity in the rural economy and well-targeted social protection schemes.
Young people in the region need better access to the labour market, education and finance.
The same is true of women, who also need better access to health care.
Women here, whether entrepreneurs or employees, suffer from policies and legal frameworks that put them at a disadvantage.
The rates of female workforce participation, firm ownership and management representation are, by any standards, low.
If we are to make good the vision of sustainable growth held out by today’s proceedings, that must change.
The good news is that we are making progress.
We have already had considerable impact in helping female entrepreneurs here through our Women in Business programme.
We’re now planning to roll out full scale versions of that programme here in Egypt and in Morocco.
And I’m happy to announce that today we signed a €17 million credit line for on-lending to women-led SMEs with QNB Alahli.
- The health of the SME sector and inclusion are also highly relevant to a third regional challenge I want to highlight, that of the movement across national boundaries of hundreds of thousands of refugees.
Here, I would like to pay tribute to those countries in this region which are hosting these new arrivals in such numbers.
And to point out that we at the EBRD are also making considerable headway in financing new infrastructure, whether in the field of renewable energy or municipal waste, to relieve the resulting burden placed on the host economies.
The sort of projects we have unveiled to date in Jordan, in infrastructure, in vocational training and improvements to education, I am sure we will be able to replicate in the near future in Lebanon.
- Last but not least, I want to say a few words about the green economy and what more it can contribute to growth in your region.
All of us have been highly impressed by the strong appetite for investment, both public and private, in renewable resources here, most of it driven by exceptionally low prices for solar and wind power sources.
But the opportunities are even greater than that.
This region has the potential to be a world leader in this area.
It is already building up expertise and putting in place robust policy frameworks. And doing so by removing energy subsidies, investing in energy and resource efficiency, developing green supply chains, and sustainable transport.
All this will unleash yet more innovation and private investment.
And, we hope, secure still more growth and jobs.
We are already your proud partners in this venture.
To date we have invested €2.3 billion in climate finance in this region.
And one of our flagship projects to date, announced only the other day, is the financing of 16 new solar power plants near the village of Benban in Upper Egypt.
It also secured our status as the largest single investor in renewable energy in this country.
Ladies and gentlemen, we do not make light of the political, economic and geostrategic challenges the region faces.
But it is successes such as those in the area of green energy that convince me that the future for this region is a bright one.
I hope that we can stay focussed on the promise of that bright future in our discussions today.
I hope too that that vision will be front and central at our Annual Meeting in Jordan next May, the first time we will have held that event in this part of the world.
Investing for sustainable growth will, I am sure, make that promise, that vision, a reality.