EBRD President Sir Suma Chakrabarti
Good morning and welcome to what is the EBRD’s first ever Eastern Partnership investment summit.
Welcome to all our VIP guests: the President of Armenia and the Prime Ministers of Azerbaijan, Belarus, Moldova, Ukraine and the Deputy Prime Minister of Georgia.
And welcome to my good friend, Commissioner Johannes Hahn, with whom we have worked so closely over the years in eastern Europe and the Caucasus.
And of course welcome to our business guests, current and future investors in the region.
Our continent has in recent weeks been re-examining its not too distant past.
We have all been reliving the excitement of thirty years ago, when the world was remade, the Berlin Wall breached and peaceful revolution swept Central and Eastern Europe.
Fifteen years ago, we lived through the historic EU enlargement. When admitting new eastern member states, the European Union also gained new eastern neighbours: countries which were also looking to increase links with the European and global economy.
So a new initiative brought together the European Union and six countries in Eastern Europe and the Caucasus. This year we also mark the tenth anniversary of the founding of the Eastern Partnership.
3. The Eastern Partnership with the diverse region
The six countries which are members of the Eastern Partnership initiative are very diverse.
Combined, these six countries have a population of about 80 million people, almost the same as Germany, but they range from Armenia’s three million to Ukraine’s nearly 45 million. They are also diverse in economic composition and political structure, and in geopolitical and trade orientation.
The six countries of the region do business with all four corners of the world. In terms of both trade and value chain integration, the EU is a major partner for all of them, but Russia plays a very important role too, as does Turkey for some countries, and China’s role is growing.
But all of them have chosen to initiate this Eastern Partnership with the EU, which is the main forum for multilateral engagement among the six.
By initiating the Eastern Partnership together with the European Commission, these six countries in effect stated: their future lies in the globalised economy under an international rules-based system, both of which are exemplified by the EU.
And this tells us that the region has committed to the reform path.
4. A region rich in promise for investors
We at the EBRD always say that we are a friend for the long term. We look at the bigger picture, rather than short-term developments.
And the bigger picture is: the Eastern Partnership region is rich in promise for investors.
In recent years, the region has made huge strides towards achieving macro-economic stability.
After decades of painful transition from state-dominated economies, new paths of economic development are finally becoming clear, and bringing tangible results.
The recent highlights are these:
- Ukraine pursuing a wide-ranging reform agenda with the aim of reinventing itself as a modern, democratic European state;
- Moldova overhauling its banking sector and thereby opening up for more global investment; and
- Georgia establishing a track record for reforms over the last 15 years.
This hard work has secured these three countries Deep and Comprehensive Free Trade Areas and visa-free regimes with the EU.
They are now closer to the rest of Europe than ever before.
- Armenia has undergone momentous political change and taken resolute steps in the fight against corruption. Together with Georgia, it enjoys some of the highest economic growth in all the EBRD regions;
- Azerbaijan is working on policies to diversify away from the oil and gas sector; and
- Belarus is laying the foundations for commercialisation of state-owned enterprises and case-by-case privatisation.
These reforms would have been unimaginable ten years ago.
They create huge opportunities for you and other investors.
5. How to create even more opportunities
How can we create even more opportunities in partnership?
The EBRD has been a key partner for the European Commission in the region, and of course a major – in many cases the largest – institutional investor in the economies themselves.
We have invested almost 27 billion euros in the region to date, of which 17 billion euros was committed since the start of the Eastern Partnership Initiative. We have also facilitated much of the transformational reform I mentioned earlier.
After a decade of successful cooperation, it is time to look ahead. Many of you will be aware that the European Commission and the six countries themselves are now working on a new policy framework for the region post-2020.
We have been part of the consultation process, and proposed some areas of focus for the future.
The main policy areas, we believe, should be:
- good governance and the rule of law;
- economic and human capital; and
- the environment.
Progress across these three fronts will not just boost economic growth.
It will also encourage the region’s highly educated, hard-working young people to stay at home and invest in their own economies, rather than relocating elsewhere.
The EBRD is already working in these three areas, and we are prepared to do even more.
6. Good governance and the rule of law
The first of these three areas is good governance and the rule of law, with an economic angle. These themes dominate EBRD’s latest Transition Report.
We can help with the reform of public administration and building civil service capacity.
One advantage of a highly skilled civil service is that investment projects are not only signed but procured with the highest standards and, where possible, with the involvement of the private sector.
Private sector firms can also significantly improve their performance by improving corporate governance.
And we can help strengthen the capacity of judges working in the area of commercial law, for example in areas such as insolvency and property rights, and assist in setting up business ombudsman institutions.
7. Economic and human capital
The second area of focus is a better use economic and human capital. One effective way of doing so is making it easier to create and expand businesses.
Companies need better access to financing: not just through banks, but non-bank institutions as well; not only through debt, but equity; not just in euros or US dollars, but also in local currency.
To boost exports, firms need stronger regulatory frameworks for quality assurance, plus more efficient infrastructure such as laboratories, and business advice.
And we are keen to help with transforming education systems to face the challenges of the new digital economy.
8. The environment
And the third area is extremely important for the region’s future: the environment.
Dependency on fossil fuels and low energy efficiency make economies less competitive worldwide. But we know that a poor environment also affects migration patterns.
We can create new financing models for renewable energy and energy efficiency in residential housing, for greener solid waste management and public transport.
Mining should be made more sustainable, and energy sectors more competitive.
Because the good news is that all of this creates opportunities for the private sector to invest. The EBRD knows this as the leading multilateral bank in mobilising private finance for the green economy.
I am proud to announce that, very soon, - in the coming days in fact, - Commissioner Hahn and I will sign an innovative agreement.
It will be our first agreement under the European Fund for Sustainable Development, guaranteeing 50 million euros to scale up renewable energy investments in the region.
For the first time ever, the EBRD’s private sector clients in the Eastern Partnership countries will be able to obtain EU guarantees.
This agreement will demonstrate how an open architecture for development finance will enable solutions to promote EU policy objectives.
Ladies and gentlemen,
The EBRD, in partnership with the European Commission, other international bodies and donors, will continue to support Eastern Europe and the Caucasus.
But we at the EBRD also believe in private entrepreneurship as a driving force for development.
So I want to encourage all the investors and entrepreneurs present here to do as we do, and to make the most of the region’s sizeable potential. We are ready to work with you in the Eastern Partnership region. Let’s seize the opportunity!
Thank you very much.