Transforming Markets

Front matter

A Development Bank for the 21st Century A History of the EBRD

Volume 2

Andrew Kilpatrick ana Anthony Williams

Chapter 7 Equality of Opportunity Chapter 8 Supporting Resilience and Good Governance PART Ill The Role of the EBRD

Chapter 10 The EBRD after 30 Years |...

Photos

Index Pr een I ee ETNE,

List of Abbreviations

AfDB — African Development Bank

ADB - Asian Development Bank

AEB - Agreement Establishing the Bank

AFG — High-Level Advisory Group on Climate Change Financing

AKP — Justice and Development Party (Turkey)

ASB -— Assistance to Small Business programme

ATCs — assessment of transition challenges

ATQs — assessment of transition qualities

BAAC — Budget and Administrative Affairs Committee

BAS - Business Advisory Services

BAT — best available technology

BEEPS — EBRD-World Bank Business Environment and Enterprise Performance Survey

BEERECL - Bulgarian Energy Efficiency and Renewable Energy Credit Line

BIDSF — Bohunice International Decommissioning Support Fund

BOC - Business Ombudsman Council

BOI — Business Ombudsman Institution

CBR — Central Bank of Russia

CDU - Central Democratic Union of Germany

CEB - Central Europe and the Baltics

CESEE - Central, Eastern and South-eastern Europe

CGAP — Corporate Governance Action Plan

CIDA — Canadian International Development Agency

CIF — Climate Investment Fund

CIS — Commonwealth of Independent States

CMD - Capital Markets Development

COO — country of operations

CONIA — Cairo Overnight Index Average (interest rate)

COP — Conference of the Parties

COP13 - Thirteenth meeting of the Conference of the Parties

COP15 - Fifteenth meeting of the Conference of the Parties

CP — Commercial Paper

CRR — Capital Resources Review

CSE — Country and Sector Economics

CSG — Client Services Group

CSRF — Country Strategy Reporting Framework

CSRM - Country Strategy and Results Management

CTF — Climate Technology Fund

DCFTA — Deep and Comprehensive Free Trade Area

DCK — Democratic Choice of Kazakhstan

DfID — UK Department for International Development

E5P — Eastern Europe Energy Efficiency and Environment Partnership

EaP — Eastern Partnership

EBRD - European Bank for Reconstruction and Development

ECB — European Central Bank

ECOFIN — Economic and Financial Affairs Council, of the European Union

EEC — European Economic Community

EIB — European Investment Bank

EMEA - Europe, the Middle East and Africa

ESP — Environmental and Social Policy

ETC — Early Transition Country

ETCF — Early Transition Country Fund

ETI — Expected Transition Impact

EU — European Union

EU-NIF — EU Neighbourhood Investment Facility

EU-PHARE - Poland and Hungary Assistance for the Restructuring of the Economy

ExCom — Executive Committee

FI — Financial Institution

FOPC — Financial and Operations Policies Committee

FSB — Financial Stability Board

FVP — First Vice President

FX — foreign exchange

GAP — Gender Action Plan

GB — Garanti Bankasi (Turkey)

viii

List of Abbreviations

G7 — Group of Seven countries (Canada, France, Germany, Italy, Japan, the UK and the USA)

G8 — Group of Eight countries (Canada, France, Germany, Italy, Japan, Russia, the UK and the USA)

G20 - Group of Twenty (Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Republic of Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the UK, the USA, and the European Union)

GCAP — Green City Action Plan

GCF — Green Climate Fund

GEF — Global Environment Facility

GEFF — Green Energy Financing Facility

GET - Green Economy Transition

GIS — Green Investment Scheme

GPA — Governance and Political Affairs

HLRM — High-Level Reporting Mechanism

IA — Integrated Approach

IC — Investment Council

ICGI — Investment Climate and Governance Initiative

ICMA — International Capital Market Association

ICR — Insolvency and Creditor Rights

IDLO — International Development Law Organisation

IsDB — Islamic Development Bank

IEA — International Energy Agency

IFC — International Finance Corporation

ILO — International Labour Organization

IMF — International Monetary Fund

INDC — Intended Nationally Determined Contributions

IPA — Instrument for Pre-Accession Assistance

IPCC — Intergovernmental Panel on Climate Change

IRENA - International Renewable Energy Agency

ISDA — International Swaps and Derivatives Association

JIAP — Joint IFI Action Plan

JNA — Joint Needs Assessment (for Georgia)

JOLE — Journal of Labor Economics

KIDSF — Kozloduy International Decommissioning Support Fund

KKB — Bank TuranAlem (later renamed BTA Bank) and Kazkommerzbank

LC2 — Local Currency and Local Capital Markets Development LDR — loan-to-deposit ratio

LIBOR — London Interbank Offered Rate

LITS — Life in Transition Survey

LSE — London School of Economics and Political Science LTP — Legal Transition Programme

LTT — Legal Transition Team

MBR — Millennium Bank Romania

MDA — Multi-Donor Account

MDB — Multilateral Development Bank

MDG — Millennium Development Goal

MENA — Middle East and North Africa

MFA — Republic of Turkey Ministry of Foreign Affairs MidSEFF- Mid-size Sustainable Energy Financing Facility MMWG — Money Market Working Group

MosPrime — Moscow Prime Offered Rate

MoU — Memorandum of Understanding

MRV — Monitoring, Reporting and Verification

MSME - micro, small and medium enterprises

NATO — North Atlantic Treaty Organization

NBG — National Bank of Greece

NDC — Nationally Determined Contributions

NDEP — Northern Dimension Environmental Partnership NGO — non-governmental organisation

NPL — non-performing loan

OCDS - Open Contracting Data Standard

OCE — Office of the Chief Economist

ODA - official development assistance

OECD - Organisation for Economic Co-operation and Development OE&E — Operational Effectiveness and Efficiency

OGC — Office of the General Counsel

OpsCom - Operations Committee

OSCE — Organisation for Security and Cooperation in Europe OSG — Office of the Secretary General

PPA — Power Purchase Agreement

PPO — Priority Policy Objective

PPP — public-private partnership

List of Abbreviations

PPP — purchasing power parity

PTI — Portfolio Transition Impact

3R — Reduce, Reuse, and Recycle

R&D — research and development

RAROC - risk-adjusted return on capital

RFR - risk-free rate

RLC — Revenue Loss Coverage

ROISfix - RUONIA Overnight Interest Rate Swap RUONIA — Rouble Overnight Index Average (interest rate) SBS — Small Business Support

SCCF — Special Climate Change Fund

SCF — Strategic and Capital Framework

SDG — Sustainable Development Goal

SEE — South-eastern Europe

SEFF — Sustainable Energy Finance Facility

SEI — Sustainable Energy Initiative

SEMED - southern and eastern Mediterranean

SGI — Strategic Gender Initiative

SIDA — Swedish International Development Cooperation Agency SLOVSEFF -Slovak Sustainable Energy Financing Facility SMEs - small- and medium-sized enterprises

SoE — state-owned enterprise

S&P — Standard & Poor's

SPCom - Strategy and Policy Committee

SPREF — Southern and Eastern Mediterranean Private Renewable Energy

Framework SRI — Sustainable Resource Initiative SSA — Sub-Saharan Africa SSF — Shareholder Special Fund STEM - Science, Technology, Engineering and Mathematics SUAL -Siberian-Urals Aluminium Company TAM — TurnAround Management TAMBAS - TurnAround Management and Business Advisory Services TCX — Currency Exchange Fund TEB -Turk Ekonomi Bankasi TFP — Trade Facilitation Programme TFP — total factor productivity xi

TIBR — Tbilisi Inter Bank Rate

TLREF -Turkish Lira Overnight Reference Rate

TurSEFF — Turkey Sustainable Energy Financing Facility

UNCITRAL- United Nations Commission on International Trade Law

UNFCCC - United Nations Framework Convention on Climate Change

URA — Ukraine Reform Architecture

VISP -Vital Infrastructure Support Programme

VP3 — Vice Presidency, Policy and Partnerships

WiB — Women in Business

WTO GPA — World Trade Organization’s (WTO) Agreement on Government Procurement (GPA)

ZSE — Zagreb Stock Exchange

Acknowledgements

Volume 1 of the History of the EBRD was completed in March 2020, shortly after the Covid-19 pandemic imposed the first lockdown in the UK and many other countries. At the time, it was hoped—even without knowing whether vaccines would be successful—that life would be back to normal by the end of that summer. Preparations for Volume 2 began with that expectation.

More than one year later, the coronavirus is still present and continues to create pressures on the working lives of those with whom we talked during the course of writing this book. Our sincere thanks goes to them, the many people connected with the Bank, past and present, who have contributed in various ways to this second volume of the EBRD’s history. The list is long so it is attached at the end of this note.

The current President of the EBRD, Odile Renaud-Basso, has lent her full support to the project which was first suggested by her predecessor, Suma Chakrabarti. We are heavily indebted to them both.

Writing a book in a “virtual” setting during a pandemic has been a challenging experience. We are fortunate that technological advances have allowed the task to be accomplished in time for the 30th anniversary year of EBRD operations. It certainly would not have been possible without the benefit of video internet platforms that by now have become commonplace. On that note, we should credit the scientists and engineers who have made this possible, and at the same time hope that we can soon return to face-toface communication.

Writing and researching via remote access has its challenges, but these are small in comparison to the disruption faced by the world of publishing over the past year. Our heartfelt thanks go to CEU Press who have supported our endeavour throughout, and especially to Linda Kunos, Senior Editor.

We are grateful to Jonathan Charles, and especially to Jane Ross, who have stood valiantly behind the production of the book from the outset, to Nick Jacobs (Contributing Editor, GlobalCapital) for his editorial guidance, and to Norbert Seiler and Paul Kearney for detailed comments on the xiii manuscript. Alex Plekhanov and Peter Sanfey also provided helpful comments on chapters at various stages, along with Vanora Bennett and Axel Reiserer. Tea Gamtkitsulashvili supplied valuable statistical assistance and Anna Vasylyeva helped with some interviews. We thank them all.

Last, but not least, thanks are due to Maggy and Dawn for their forbearance and willingness to put up with many days of absence—albeit within the same home—while the book was put together.

Andrew Kilpatrick Anthony Williams

London, 12 May 2021 xiv

Acknowledgements

The authors would like to thank (in alphabetical order) the following for their help, insights and assistance:

Sevki Acuner; László Andor; Memduh Ackay; Olga Aristeidou; Bengu Aytekin; Edward Bannerman; Anthony Bartzokas; Phil Bennett; Vanora Bennett; Erik Berglof; Russell Bishop; Catarina Bjorlin-Hansen; Harry Boyd- Carpenter; Jonathan Charles; Eirini Christodoulaki; Gian Piero Cigna; Alistair Clark; Joanna Conway; Hester Coutanche; Mike Davey; Friso de Jong; Milica Delević; Valeria Della Rosa; Boris Dincer; Dermot Doorly; Sabina Dziurman; Joe Eichenberger; Elisabetta Falcetti; Francesca Foglia; Anne Fossemalle; Harold Freeman; Hildegard Gacek; Tea Gamtkitsulashivili; Kristalina Georgieva; Susan Goeransson; Kristine Grun; Lado Gurgenidze; Sergei Guriev; Heike Harmgart; Adonai Herrera-Martinez; Peter Hjelt; Kemal Cagatay Imigri; Nick Jacobs; Beata Javorcik; Nigel Jollands; Gordon Jones; Matthew Jordan-Tank; Stephane Jucobin; Fani Kallianou de Jong; Paul Kearney; Natasha Khanjenkova; Franka Klingel; Libor Krkoška; Jacek Kubas; André Küüsvek; Hans Peter Lankes; Isabelle Laurent; Jean Lemierre; Vassili Lelakis; Oleg Levitin; Colm Lincoln; Francis Malige; Levan Mebonia; Nik Milushev; Gianpiero Nacci; Piroska Nagy-Mohácsi; Lucie Newman; Theresa Nierderle; Michel Nussbaumer; Lin O’Grady; Jonathan Ockenden; Aude Pacatte; Oksana Pak; Nandita Parshad; Akhil Patel; Steve Petri; Alain Pilloux; Alex Pivovarsky; Alex Plekhanov; Enzo Quattrociocche; Biljana Radonjic Ker-Lindsay; Artur Radziwill; Barbara Rambousek; Horst Reichenbach; Bojana Reiner; Axel Reiserer; Odile Renaud-Basso; Thomas Revial; Anastasia Rodina; Mattia Romani; Olga Rosca; Jane Ross; Alan Rousso; Charlotte Ruhe; Arda Sahinkayasi; Anna Sali; Peter Sanfey; Gerard Saunders; Norbert Seiler; Christoph Sicking; Ian Smith; Craig Spruce; Nick Stern; Juraj Strasser; Svetlana Strizovic; Josué Tanaka; Leander Treppel; Arvid Tuerkner; Jim Turnbull; Jan Willem van den Wall Bake; Axel van Nederveen; Anna Vasylyeva; Endrita Xhaferaj; Bryan Whitford; Jeromin Zettelmeyer; Nibal Zgheib.

XV

Foreword

This second volume of the History of the EBRD is going to press just as the world is tentatively looking forward to a recovery from a pandemic that has cost hundreds of thousands of lives and dealt a devastating blow to economies across the globe.

Intense suffering has continued. There may still be further setbacks and, even in recovery, the world could look quite different from the pre-Covid-19 era. There is no doubt that the virus has wielded a disproportionately greater impact on the poorest and most vulnerable sections of society, including in the EBRD’s regions.

The EBRD stands willing and prepared to stand by its countries as they continue to deal with the immediate challenges of the worst global health crisis in generations. It will help them deliver a more robust and more inclusive economic future once the recovery takes hold.

This second volume of the EBRD’s history tracks the path that the Bank has taken over the last 15 years, during which it strengthened its contribution to the countries where it invests, making a greater impact on the lives of the people it serves.

It covers a period where the Bank became even more international in its shareholder base and adapted to address more comprehensively the global challenges of the 21 century. The Bank embarked on a period of expansion to geographies beyond the planned economies of its post-communist remit. Yet, it remained unerringly true to its fundamental purpose to support its countries of operations in their quest to become well-functioning, market-oriented economies.

Picking up the story in the latter part of the first decade of the new millennium, we see how the EBRD transferred the skills it had successfully built up in central and eastern Europe and seamlessly applied them first to Turkey and then further afield.

We track the EBRD as it filled a policy vacuum that emerged in the global financial crisis of 2008/2009, taking the lead in a response that staved xvii off the worst impacts of the sharpest economic downturn since the transition collapse, and stepping up financing just as the private sector retrenched.

Just as there were signs of embryonic recovery in eastern Europe, popular protests erupted across the Arab world, reminiscent of the 1989 quest for freedom from the communist yoke. The EBRD responded to appeals from the international community and from emerging new democracies and brought its talents to the Mediterranean shores of North Africa and the Middle East. Just a little later, it supported the economies of two eurozone members, Cyprus and Greece, whose financial sectors had been devastated by a fiscal and debt crisis.

The Bank’s strong early contribution had been to support the integration of post-communist countries into the EU and to encourage all of them to build free market economies. The ease with which it shifted gear to reach out just as effectively to a different set of countries is testament to the high quality of the EBRD’s central proposition. It demonstrated during this period the supremacy of the Bank’s unique business model over the confines of geography or cultural and historical heritage. It is a business model that thrives because of its targeted market-driven focus and support for the drivers of economic growth. It is success built on a presence on the ground in its countries of operations that is unmatched by other development institutions.

The EBRD has established a winning combination that brings together sectoral and institutional expertise with teams of highly professional local staff with a profound understanding of the economies and the political dynamic in each of the countries it serves. This insight into politics and access to policymakers facilitates meaningful dialogue with both local and the central authorities at all levels of political influence, including the very highest. These are relationships that engender mutual trust and respect and also allow for candour in those periods that call for difficult messages.

The EBRD’s ability to forge strong partnerships has been another important plank in its support for emerging economies, one outstanding example being its cooperation with the European Union and key bilateral donors to provide finance and technical assistance for the countries of the Western Balkans as they work towards further EU integration.

The EBRD’s mandate and the goals that it enshrines have remained unchanged since the creation of the Bank in 1991. But it has deepened its endeavours and its contribution to transition in the light of experience and added to the toolkit it uses to achieve its goals. It has shifted the balance xviii

Foreword between financial investment and policy engagement and placed a greater emphasis on support for policy reform that underpins economic progress and guarantees that the EBRD’s ultimate contribution is greater than the sum of its individual projects.

Rejecting the binary notion of “state bad, private sector good”, the EBRD fully acknowledges the crucial role the public sector must play in helping to create institutions and regulatory frameworks within which the private sector can flourish. The Bank has worked tirelessly and across multiple economic sectors to help authorities deliver the institutional evolution and adherence to the rule of law that attracts international and domestic flows of sustainable investment.

During the period covered by this second volume, the EBRD strengthened the criteria according to which it measures the success of its interventions in emerging economies to take account of the sustainability of its transformational efforts. It has remained committed to improving such qualities as competitiveness and integration—core activities of the early years—but put an even stronger focus on green transition, inclusion and governance, as well as resilience.

There emerged an increasing alignment between the EBRD’s priorities and the international development agenda when, in 2015, the United Nations unveiled its 17 Sustainable Development Goals and there was near universal endorsement of the Paris Climate Agreement, which finally made a determined global effort to address the urgent challenge of climate change.

Having pursued a strong environmental agenda since its inception, the EBRD’s own contribution to the Paris accords was now a pledge to raise the share of its green financing to 40 per cent of annual investments by 2020, and then subsequently to scale up further its ambitions to become a majority “green” bank by 2025.

Just as it had reacted with determination and agility to earlier external events like the financial crisis and the Arab Spring, deftly applying its skills to new challenges, the EBRD also responded decisively to concerns about the negative impacts of climate change and to fears that the fruits of rising prosperity were not being shared fairly across societies in its regions.

It remained true to its belief in the positive forces of multilateralism and its rejection of nationalism and protectionism. It did not want to reverse the tide of globalisation, but it wanted to make it more widely beneficial—to xix help small businesses and entrepreneurs in its regions participate competitively and successfully in the global marketplace.

It increased its efforts to reach out to those who risked being stranded on the margins of economic progress with the introduction of a fully-fledged strategy of economic inclusion. Through its investments and policy work the Bank could ensure the greater integration of individuals—who were missing out through no fault of their own—into the jobs market and to the world of enterprise.

As the EBRD now looks forward to the post-Covid era and implements its strategy for the next five years, it has three clear priorities:

e It will deliver on its ambitious green economy targets, with plans to ensure that every one of its projects is aligned with the Paris climate goals by end 2022, and that over 50 per cent of its investments are “green” by 2025. It will not neglect its other traditional investment areas including small businesses, industry and energy and infrastructure, but financing in these sectors will be an integral part of the EBRD’s pathway to a net zero emissions future.

e It will promote inclusion and equality of opportunity through access to skills and employment, finance and entrepreneurship, providing targeted support especially for women, young people and underserved communities and seeking to address imbalances that have been put into particular relief by the Covid-19 pandemic.

e It will accelerate the digital transition process, supporting a trend whose importance has only been highlighted during the lockdowns that have been imposed to stem the spread of the coronavirus.

In the future, if this is what shareholders decide, the EBRD may determine whether there is scope for incremental further expansion of the Bank’s geographic remit into sub-Saharan Africa and Iraq. We aim for a decision next year.

In the meantime, the EBRD remains a robust and reliable partner for all of its countries of operations.

XX

Foreword

It will make good on its pledge to deliver a stronger, sustainable economic future that changes lives for the better and is shared by the many, not just the few.

Odile Renaud-Basso President, European Bank for Reconstruction and Development

XXi

Preface

The EBRD was created at a time of momentous political and economic change. It would probably never have existed had it not been for the grand vision of Jacques Attali and his President, François Mitterrand, to push for a new European institution to help former communist countries embrace democratic values and market economics.

The fledgling institution symbolised a new Europe embracing east and west.

That perspective became more broadly based with the inclusion of OECD shareholders beyond Europe, at Mrs Thatcher’s behest. And with it a combination of private and public sector standpoints. The Bank emerged as a well-balanced multilateral institution defined by its “European character,” trans-Atlantic perspective and truly international shareholder base (spanning five continents).

Many of the EBRD’s founders did not expect—or want—the institution to last for long. There was a widespread belief that while some assistance was needed to help markets become established in former command economies, once they were in place they would be able to guide economic progress without further interventions from development institutions.

This view proved to be wide of the mark. The transition towards market democracies was not an easy or straightforward process. The shocks from the radical changes to economic systems that occurred were severe and their effects long-lasting for the EBRD’s countries of operations. The value of the EBRD’s financial and other assistance thus became more durable than the more vocal market advocates had supposed at the start.

It was against this backdrop, described in Volume 1 (After the Berlin Wall), that the EBRD offered vital support in its early days to investors in central and eastern Europe and to local entrepreneurs seeking to develop their businesses and skills in the new market context. The EBRD soon grew to become a successful regional MDB with considerable sectoral expertise and developed a deep knowledge of countries in its areas of operations—in central, eastern and south-eastern Europe, Russia, the Caucasus and Central Asia.

At the halfway point of the EBRD’ life, in the mid-2000s where this volume begins, the Bank was investing around €5 billion a year, more than double the rate seen at the end of the 1990s. It was also making substantial profits.

A vigorous debate was underway among shareholders and with the Bank’s management over the size and future direction of the institution. It was prompted by the accession of eight countries of operations to the European Union, with two more slated to become member states in the near future. Arguments raged over the graduation of the EU countries. There was a further view that the EBRD, if it was to continue at all, should focus its investments towards the “south and east”.

No-one predicted just how extensive and significant this 90-degree shift in geographic direction would turn out to be. Neither was it foreseen that the EBRD would double its balance sheet within 10 years.

It is the events and decisions behind the growth and reorientation of the EBRD that forms the basis of this volume. For much of this period, the quintessential “Bank for transition” also became a “Bank in transition”. And it emerged the better for it.

The first part of the book depicts the geographic dimension of this change and includes the Bank’s responses to the series of crises that contributed to these developments and the growth of its business.

After two decades of transition it had become clear—especially as a result of the global financial crisis—that successful market development went hand-in-hand with institutional development. Inadequate improvements to market-supporting institutions and wider governance issues were proving to be major hinderances in several of the EBRD’s countries. Many countries had become stuck in transition.

Understanding the political economy of change proved to be just as important in the transition context as applying the tenets of market economics. This realisation prompted a review of the transition concept that underpinned the rationale for the Bank’s activities.

The second part of the book looks at this and considers the implications of the review for the Bank’s operational stance.

Transition was no longer just a matter of putting markets in place and investing to create a private sector. After all, by now markets and private sector activity were present almost everywhere in the EBRD’s regions, albeit with varying degrees of success.

Preface

Instead, the view emerged that transition, and successful development, was more a matter of transforming these emerging market economies to be able to function well and become sustainable over the longer term. The transition story was thus a deeper and more complex one than simply introducing competition and integrating economies into regional and global markets, important though these were. It included a more prominent role for a (benign) public sector.

The core thesis was that transition could be better achieved by improving six qualities that together would transform a market economy to become sustainable, one which could grow steadily and prosper over the long run. Two qualities—“competitive” and “integrated” —were integral to the Bank’s story so far. The other four—“resilient”, “well-governed”, “inclusive” and “green”—emphasised new or existing qualities that were regarded as additionally necessary for successful economic development.

The picture that was being drawn was coloured by circumstances that had arisen from the Bank’s experience. The focus on resilience, for example, was a natural consequence of efforts to avoid a repeat of the damaging impacts from financial crises in the face of future economic shocks. The EBRD’s work to improve local currency financing and strengthen local capital markets was one response.

Corrupt practices, the dominance of politically-connected cliques and the flouting of legal norms in several countries meant that the investment climate and business environment too often failed to support sound economic growth. To address this, the EBRD looked at ways to improve governance. Similarly, widespread and high levels of youth unemployment in southern and eastern Mediterranean countries put a spotlight on the need for better opportunities for young people. The striking inequalities facing women in this region, and also in Turkey, was another reason for an increased emphasis on inclusion by the Bank.

A further consideration involved a more complete integration of the Bank’s green agenda within its transition apparatus. The EBRD was a pioneer in working with the private sector to tackle climate change and was playing a leading role in supporting a transition to a low carbon future. The rationale for focusing on green outcomes, as part of the systemic transformation needed to create a sustainable market economy, was strong.

From the beginning to the present day, the EBRD has focused on systemic change. As a relatively small IFI, it concentrated on building partnerships through which it could achieve greater impact and change. Chief among them was its relationship with the private sector, where together with the EBRD substantial amounts of finance have been invested for transition and development.

This finance has been leveraged, especially in more recent times, through the Bank’s policy engagements with public authorities and increased donor support to deliver structural reforms, enabling market improvements and greater investment and job opportunities. The EBRD’s public-private partnership model has achieved a great deal and, in many ways, has been ahead of its time. The EBRD is a multilateral institution like no other.

The final part of this history looks at the role of the EBRD in this context. It takes a view of the Bank over the 30 years of its existence, including how its regions have fared over this time.

During this period, the EBRD responded rapidly and effectively to new challenges and circumstances. Although one of its original purposes—helping former communist countries develop a market orientation and a private sector—has faded with the passage of time, the logic of transforming economic systems to help countries become sustainable market economies has not. In fact, leveraging the private sector to deliver public goals, such as sustainable development or greater opportunities for women and young people, and encouraging the public sector to introduce market-supporting reforms has never been more important.

While the current predicament of trying to manage the spread of Covid- 19 and address its economic consequences is of central importance, it will not be the only threat to development in the next 30 years. Among the most prominent that can be foreseen is climate change. Here too, the EBRD can make an important difference.

The balanced multilateral setting and public-private partnership model that has lain behind the EBRD’s unique contribution to transition and development over the past 30 years is one that the global community would be well-advised to embrace.

The chances of longer-term success would appear to be greater if it does.

Andrew Kilpatrick Anthony Williams May 2021

Part |

An Evolving Landscape