The Message of EBRD president, Sir Suma Chakrabarti, for Romanian politicians: reduce corruption, remove blockages in the country's development, stimulate investments

Autor: Bancherul.ro
2013-06-21 11:20

Sir Suma Chakrabarti, the new head of the European Bank for Reconstruction and Development (EBRD), who recently visited Romania, has three messages for Romanian politicians: 1. remove blockages that hinder the development of the country, 2. reduce corruption 3. revamp the civil service and develop programs to attract investors.

During his visit in Romania, Chakrabarti received the title of Doctor Honoris Causa from the Academy of Economic Studies (AES) in Bucharest, during which he answered questions from students, teachers and the public. Asked about what is the message and recommendations he has for Romanian politicians so they could improve the efficiency of the country management, the new EBRD head said that following the discussions with the representatives of the Romanian government on long-term strategy for the development of the country, a unanimous opinion has emerged: the most important problem to be solved is to remove the blockages that hinder economic development.

For this purpose, he added, three issues have to be addressed: first is to restructure the country's priority sectors, and the second involves the development of programs for attracting investors, who are also complaining about the blockages in various development projects they are involved in.

"A third issue that has become increasingly evident in the last 3-4 years is that the functionality of the public administration, the public service, needs to be much improved. Although there has been progress in some sectors, I think it is very important for us to help Romania to improve public administration, and I hope that an important contribution to this process will have the new generation, students ", said Chakrabarti.

Corruption, on the other hand, is one of the main problems, not only in Romania but also in other countries in the region, he added. "I think the best solution to reduce the level of corruption is to increase transparency in decision-making in public administration and in the processes of privatization and contracting works. Reducing corruption also stimulates the investments, that is why we strongly support any measure that would lead to less corruption in Romania", the EBRD head said.

A student asked Sir Chakrabarti what will mean for Romanian public administration the adoption of euro currency and what will change this. The EBRD official said that by adopting the single currency, in principle one country and the public sector to some extent lose control of the economy and policy regulation. "Adapting to this change is not easy, so it is a great challenge for any country," he warned.

EBRD lent 6.2 billion euros in Romania

In his speech, Sir amount Chakrabarti said that “the two decades after the fall of the Berlin Wall has been an immense success” for the former communist countries of Eastern Europe. "Of course, there have been ups and downs.  But politically all of the countries in this region are more democratic than they were and economically much more prosperous.”

The EBRD played a very positive role in this process, he added. “Through its projects, largely in the private sector, EBRD has undoubtedly been part of the story of prosperity in the region.  We have lent €83 billion over 22 years in more than 3,700 projects, of which €6.2 billion and more than 370 projects were in Romania."

"Without EBRD, because we undertake projects that commercial banks ignore, Rom Telecom may not have been able to invest into the expansion of its digital network to 600,000 new homes as early as in 1992. More recently, the German and Belgian retailers Kaufland and Louis Delhaize may not have committed the amounts that they have invested in Romania in the past 5 years, bringing modern retail formats and safe food to an increasingly large number of Romanian homes, while supporting local farmers. For a public servant like me, to join and lead the EBRD is a great honour.  I truly believe this public institution has and can continue to make a difference", said Chakrabarti in his speech.

The public service challenge in Eastern Europe

„How will the EBRD continue making a difference?  Well, back to the beginning.  The best public institutions reinvent themselves for new challenges while staying true to their mandate.  EBRD staff, although largely focused on private sector development, are public servants.  The best public servants do not wallow in nostalgia.  They innovate and tailor their products and services to the challenges of today and the future.

So that is what we are doing at the EBRD.  This region – and Romania is no different – has to find the levers for growth and jobs.  If it doesn’t do so, then the long-term economic and political consequences could be grave.  A generation of workless youth will create extraordinary pressures on any society.

To match up to this growth and jobs challenge, I and my public servant colleagues in the EBRD want to invest more in SMEs and infrastructure, do more to bring in to the economic marketplace the women entrepreneurs, the young, and the under-served regions, push our green agenda beyond energy efficiency to other sectors, attract investment from other emerging countries as well as the traditional Western European market, and bring on board institutional investors from other parts of the world”, said Chakrabarti in his speech.

EBRD officials need to be more vocal in influencing politicians

Sir amount Chakrabarti believes that EBRD officials must be more vocal and more involved in influencing decisions made by politicians, who, once elected to lead a country, could be reluctant to take important decisions such as structural reforms, fearing not to lose voters or jeopardising  their personal  interests.

Sir amount Chakrabarti: "But re-inventing our investment, business development and financing is not enough.  The good public servants of the EBRD also need to be much more vocal and challenging of the governments of the region on policies.  Structural reforms are sorely needed.  But, politicians – as I said before – have been timid for fear of vested interests and the impact at the ballot box.  They need to act to improve the investment climate, tackle corruption, and improve governance.  All of those actions are important over the long-term for growth and jobs.  The public servants of the EBRD will be pushing and supporting them to make the changes. "

"Why should they do all that?  Why should political and public service leaders in Romania and throughout this region take these difficult decisions?  Because they only have to stand here and look at you.  I am coming towards the end of my public service career.  You are all about to start your working lives in the next few years.  You are the future.  The good public servant will want to do his or her best for you, to serve the future, not just the present. "he told students at AES Bucharest.

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