The European Bank for Reconstruction and Development (EBRD) is increases its fight against corruption, viewing it as an increasing obstacle to investments in economies that are struggling to rekindle growth. EBRD President Sir Suma Chakrabarti said in a keynote speech to the Annual Anti-Corruption Conference of the International Bar Association
in Paris that the Bank’s partners were now more frequently citing corruption as an obstacle to investing in the EBRD region.
This was especially alarming, in his opinion, as corruption-linked risk aversion was coming at a time when foreign investment was needed more than ever in the EBRD region.
The EBRD is now adapting its projects in order to tackle corruption more effectively and also adopting a more systematic approach, as in the case of its Anti-Corruption Initiative in Ukraine, which it is undertaking in collaboration with the Ukrainian government. The EBRD President said the EBRD’s rigorous due diligence procedures meant that the number of cases of corruption in the projects it finances had been kept to a minimum. Nevertheless, the Bank needed to do more to have a larger impact on fighting corruption in the wider economy in its countries of operations.
The EBRD was also stepping up its financing to small and medium-sized enterprises (SMEs). However, the Bank also needs to go beyond individual projects and create a platform from which to launch a wider response in the fight against corruption. The EBRD has already adopted this approach in Ukraine, where the economy is suffering from the double impact of the slowdown both in western Europe and in Russia.
The Ukrainian Anti-Corruption Initiative is bringing together representatives of the Ukrainian government, business associations and international financial institutions active in the country, including the EBRD. Sir Suma said: “We are very pleased that the Ukrainian authorities have fully embraced the Initiative at the very highest political level and are determined to make it bite.” The EBRD is convinced that this wider, inclusive, open and collaborative approach is the way forward – not just in Ukraine but in other emerging economies.