EBRD to invest 7.5 billion euros in North Africa, Jordan
The European Bank for Reconstruction and Development (EBRD) hopes to eventually invest 7.5 billion euros a year in North Africa and Jordan to support democratic transition and help economies recover from the 2011 revolutions, its president said.
The EBRD, set up by governments in 1991 to support the ex-Communist states of eastern Europe, is expanding its mandate to invest in Jordan, Tunisia, Morocco and Egypt after the Arab Spring events of last year unseated decades-old dictatorships in many of the region’s countries.
While the expansion is yet to be approved by the bank’s 65 shareholder nations, the EBRD has said it would propose a special one billion-euro fund at its upcoming May annual meeting allowing it to finance Arab Spring projects in the meantime.
“With regard to the countries of North Africa and Jordan we plan to be investing 7.5 billion euros a year in three years time, including 2.5 billion euros of our own funds,” EBRD President Thomas Mirow said in a recent interview in Tunis.
“Projects will include many in the infrastructure, energy and small and medium sized companies sectors and agro-industry.”
Uprisings in Tunisia, Egypt and Libya removed three North African heads of state in 2011, while protests prompted political reforms in countries including Morocco and Jordan.
While bringing about more political freedoms, the upheavals have also hit economic growth.
Mirow said investment demands from Arab Spring countries were huge and that the EBRD hoped it could make a difference in boosting the private sector. Years of dictatorship meant private sector investment was often crowded out by the state or discouraged by cronyism before last year’s revolts.
The EBRD, whose investments in eastern European economies have helped to drive growth and structural change across a range of sectors, has already started donor-funded activities in North Africa, with a technical cooperation fund worth 59 million euros having started to lend at the end of 2011.
The bank plans to create a 1-billion-euro fund to invest in North Africa and Jordan, it announced last month.
Mirow said the biggest lessons that the Arab Spring countries could learn from the transition of eastern European countries after the collapse of communism, was the importance of both the public sector and private sector roles in the economy.
Mirow said boosting the private sector was key to creating the jobs that are so desperately needed in the region but that governments should not rush into hasty and poorly-planned privatisations either.
Funds would begin flowing to Tunisia in September, Mirow said.
Mirow’s tenure at the head of the EBRD expires in July and he said a new president was set to be elected at a meeting of the bank’s members in London on May 18.
Mirow is running for a second four-year term but has not won German backing and four other candidates from Poland, Serbia, Britain and France are now in the running.
The position has traditionally gone to a French or German candidate, but officials say that Britain’s nominee, Suma Chakrabarti, is a strong candidate and a frontrunner.
“Germany did not refuse to support me but refused to support my campaign… I accept this,” Mirow said, speaking in French.
“Russia and Bulgaria are supporting me and there are other countries supporting me too… but I cannot name them.”