Time to update calibrating approach?
Top managers at the European Bank for Reconstruction and Development have spent several days in Belarus
Top managers at the European Bank for Reconstruction and Development have spent several days in Belarus, with members of the Board of Directors discussing the economic situation and looking at promising projects for investments
By Alexander Benkovsky
The geography of the trip was wider than usual, including not only Minsk enterprises, but businesses in the industrial towns of Baranovichi, Smorgon and Fanipol. The delegation met members of Government, as well as those from non-governmental organisations and various investors, before spending time with Prime Minister Mikhail Myasnikovich.
The Head of the Government believes that the EBRD could invest more generously in Belarus’ economy, saying, “In recent years, the number of projects has fallen, as have financial injections. We’ve asked ourselves why and the answer is that the bank is guided by a calibrating approach, which reduces opportunities for our co-operation.”
The PM noted that Belarus was one of the first members of the EBRD, and underlined that Belarus has many major projects underway, including in the spheres of road construction, communication and power engineering.
Since 1992, when documents on co-operation were signed, the bank’s investments into Belarus’ economy have amounted to 1.5bn Euros — across more than 60 projects (primarily in private business). Orientation towards private initiative is the EBRD’s deliberate strategy, having set aside state sector investment several years ago. It prefers to encourage reform through supporting the privatisation of Belarusian enterprises. However, EBRD representatives admit that the Belarusian economy is undergoing reformation.
Sean Donlon, the EBRD Director for Ireland, Denmark, Kosovo and Lithuania, tells us, “Bank representatives have been extremely impressed by the results shown by projects financed independently by Belarus. We believe opportunities exist to expand our activity, even under our calibrating approach.”
Regarding the purpose of the EBRD visit, he noted that the team’s mission has been ‘to listen to proposals from Belarus, and to consider them at a session of the full Board of Directors’. He believes that the trip may result in the support of certain financial projects.
Speaking of current levels of EBRD-Belarus collaboration, the bank recently expanded its presence in the country, directing funds towards the support of local and foreign investor projects in the private sector. In the first three months of 2014, the EBRD invested around 125m Euros into Belarusian businesses.