CGD Podcast Summary

Episode: Who Should Lead the EBRD? – 2016 Presidential Candidates

Date: April 26, 2016
Host: Rajesh Merchandani, Center for Global Development
Guests:

• Marek Belka (then President, National Bank of Poland)
• Sir Suma Chakrabarti (incumbent, seeking a second term as EBRD President)

Overview

This episode spotlights the two candidates for the presidency of the European Bank for Reconstruction and Development (EBRD): Sir Suma Chakrabarti and Marek Belka. The podcast features edited, side-by-side answers to key questions on the future direction of the EBRD, its operational scope, relationships with other development banks, its unique political mandate to promote democracy, and the candidates’ personal qualifications. The discussion explores the strategic challenges and opportunities facing the EBRD as it works across a diverse region, from Morocco to Mongolia, while navigating geopolitical tensions and evolving development needs.

Key Discussion Points and Insights

1. Scope and Scale of EBRD Operations

(00:05–05:04)

• Future Footprint and Mission

  • Belka: Emphasizes EBRD’s traditional, Europe-focused mandate; cautions against unchecked expansion.

    “Further growth of our region of operations is not an objective in itself. That’s clear…we shouldn’t aim at beating records here and now.” (03:04, Belka)

  • Chakrabarti: Acknowledges expansion beyond post-communist states and supports intensifying existing operations. Predicts growth in investment volume, aligning with shareholder strategy.

    “We’ve got a job on now just to intensify our work in all 36 countries of operation…Our shareholders have agreed...we should actually increase our investment volume.” (04:41, Chakrabarti)

• Overlaps with Other Development Banks

  • Belka: Sees overlaps as opportunities for collaboration, given EBRD’s private sector expertise versus others' public sector focus.

    “They have probably more leaning onto…big infrastructure projects. So there is certain potential for synergy.” (05:31, Belka)

  • Chakrabarti: Rejects idea of direct competition; stresses different business models and complementarity, particularly highlighted by praise from leaders like former AfDB President Donald Kaberuka.

    “There’s complementarity rather than competition and overlap, I would argue.” (06:34, Chakrabarti)

2. EBRD’s Political Mandate and Its Influence on Operations

(07:19–14:14)

• Political Mandate (Democracy Promotion): Blessing or Curse?

  • Chakrabarti: Considers the democracy mandate EBRD’s “distinctive feature” and central motivation for staff; sees it as necessary for sustainable market economies.

    “Article 1 is fundamental…business model is focused on trying to help these countries become more market-oriented…in countries that are committed to democracy” (07:40, Chakrabarti)

  • Belka: Notes unique combination of political mandate and project-focused operations; highlights the importance of context-sensitive policy dialogue and the limits of approaches like public-private partnerships in countries with weak institutions.

    “We have to tailor our activity and elements of policy dialogue to the needs of individual nations...if the quality of the state is poor, PPP does not work or ends up in corruption.” (08:38, Belka)

• Private Sector Focus and Policy Leverage

  • Belka: PPPs offer leverage with sovereign governments, particularly where the EBRD fills financing gaps and exercises oversight.

    “Even if we are relatively small...we can have a leverage, especially in smaller countries.” (11:11, Belka)

  • Chakrabarti: Rejects the idea that only sovereign lending confers influence; insists EBRD’s deep sectoral knowledge enables effective policy leverage and reform advocacy.

    “EBRD shows...with a great knowledge at sector level, at project level...you have the expertise and knowledge that any government serious about its development...would want to leverage itself.” (12:13, Chakrabarti)

• Case Study: Kazakhstan

  • Chakrabarti: Attributes recent policy reforms, including PPP law changes, to EBRD expertise and partnership.

    “PPP law, for example, reformed in Kazakhstan because of us and because they wanted to reform it.” (13:24, Chakrabarti)

  • A challenging moment: Rajesh questions Chakrabarti on whether Kazakhstan can be called a “functioning democracy,” to which Chakrabarti gives a process-oriented response.

    “There isn’t a station at which everyone’s arrived already...they’re on a process, they’re applying the principles…” (13:35, Chakrabarti)

3. Russia: Engagement Amidst Geopolitical Challenges

(14:14–21:10)

• Importance of Russia to EBRD

  • Chakrabarti: Russia remains crucial for portfolio management, given ongoing projects, and due to its economic influence on the region.

    “When the Russian economy sneezes, Central Asia catches the cold.” (14:24, Chakrabarti)

  • Belka: Focuses on Russia’s economic need for diversification and notes recent operational suspension is driven by sanctions, not EBRD leadership.

    “The main problem for the Russian economy is how to diversify away from commodities...the decision to suspend...was linked to...sanctions.” (16:27, Belka)

• Political Mandate and Authoritarian Contexts

  • Belka: Calls for pragmatism and principles, responding to democracy deficits with a focus on long-term dynamics and the need to “speak out” if regressions occur.

    “Democracy institution building is a long-term process...we have to be pragmatic. At the same time, we have to be principle in certain situations.” (18:03, Belka)

  • Chakrabarti: Emphasizes the operational (not overtly political) nature of EBRD’s role, focusing on engagement with countries “on their own route toward democracy.”

    “Our operational role isn’t about promoting democracy. We are working in countries that are on their own route towards democracy.” (15:44, Chakrabarti)

• Effects of Sanctions and Filling the Gap

  • Belka: Recognizes EBRD’s success in filling the portfolio gap left by Russia with increased investment in Turkey and Ukraine, though he warns this may not be sustainable long-term.
  • Chakrabarti: Cites staff redeployment and record new investments as indicators of resilience and adaptability in the face of Russian sanctions.

    “We were able to redeploy our staff working on Russia...that has been the great success.” (20:18, Chakrabarti)

4. Engaging with New Banks and the Rise of China

(21:10–26:27)

• Relationship with AIIB (Asian Infrastructure Investment Bank) & NDB (New Development Bank)

  • Chakrabarti: Openly positive about the arrival of new development banks, viewing them as partners to help meet the substantial infrastructure financing gap.

    “We have been very clearly positive about the creation...We see the AIIB as a potential real partner for us in our region.” (21:35, Chakrabarti)

  • Belka: Focuses on “Silk Road” projects as opportunities for synergy, primarily in Central Asia; EBRD as a complementary player to large infrastructure banks.

    “If you have an ambitious infrastructure project, you have to sort of surround it with smaller private sector driven projects...and here we are.” (22:07, Belka)

• Advantage of EBRD’s Private Sector Focus

  • Belka: Continues to emphasize the complementarity, arguing that infrastructure alone does not spur development without local private sector dynamism.

    “You can build a fantastic highway...and it may remain moribund if you don’t have private sector or small businesses around it.” (23:54, Belka)

  • Chakrabarti: Ties EBRD’s relevance to the global agenda: the private sector must drive SDG achievements; EBRD is uniquely placed to lead.

    “Private sector is going to have to take much more of a strain both in the financing of that development, but also in the delivery of that development.” (24:31, Chakrabarti)

• China as Shareholder

  • Chakrabarti: Calls China’s membership a “win-win-win,” with China interested in learning EBRD’s private sector methods.

    “China became our 67th shareholder...the EBRD has a business model which is of great interest...private sector focus is something they’re quite interested in actually showing their own development banks.” (24:31, Chakrabarti)

5. Lessons for North Africa

(26:27–28:51)

• Relevance of Post-Communist Europe Experience
  • Chakrabarti: Highlights lessons in privatization, PPPs, and especially SME development as crucial for tackling youth unemployment in North Africa.

    “SMEs are vital for North Africa because of the huge numbers of youth unemployment. They're the best answer frankly to trying to mop up that youth unemployment.” (26:47, Chakrabarti)

  • Belka: Underscores institution-building and the rule of law as prerequisites for SME growth; draws on Polish and Russian experiences.

    “The problem is how to build institutions, provide rule of law or predictability in economic judiciary...so these small enterprises develop into medium size and then in bigger.” (27:33, Belka)

6. MDBs, Shared Problems, and Global Public Goods

(28:51–32:03)

• EBRD’s Role in Addressing Global Challenges
  • Belka: Advocates linking global goods (e.g., “green economy”) with countries’ own interests in modernization.

    “Energy conservation, greening, this is not just about the global public goods. It’s in your own interest. This is how we should proceed.” (29:21, Belka)

  • Chakrabarti: Recommends MDB “complementarity” and focusing on core competencies, citing effective partnerships (e.g., with AfDB, World Bank).

    “Where we can add value is in partnerships…where they have the country knowledge and we have the SME…where we can also work very well…is in designing reform programs.” (30:36, Chakrabarti)

7. Candidate Statements: Why Should You Lead the EBRD?

(32:03–35:11)

• Chakrabarti: Points to his track record, personal connection to EBRD, and recent successes in investment volume, policy reform, and climate action.

  “The track record of the last four years is...really good...transition impact numbers have gone up, the investment volumes have gone up. So we're investing more, but higher quality.” (32:10, Chakrabarti)

• Belka: Cites personal “hands-on” transition experience in Poland and internationally, deep understanding of IFIs and the political process, and suggests it may be time for an advanced transition country leader to take the helm.

  “I know what transition was and is about. And I have hands-on experience, not only from Poland...it may be [a] good opportunity to show the flag of the countries of transition and suggest that they might take the helm of this organization.” (33:47, Belka)

Notable Quotes & Memorable Moments

• “When the Russian economy sneezes, Central Asia catches the cold.” (14:24, Chakrabarti)
• “You can build a fantastic highway...and it may remain moribund if you don’t have private sector or small businesses around it.” (23:54, Belka)
• “It was painful...because you have to do it at the cost of the very unefficient state sector.” (27:33, Belka on post-communist transitions)
• “For many of us...it's because of that mandate [to promote democracy] that we come to work.” (07:40, Chakrabarti)

Timestamps for Key Segments

• Introduction & Format: 00:05
• Future Footprint: 01:50–05:04
• Overlap with Other Banks: 05:04–07:19
• Political Mandate/Democracy: 07:19–14:14
• Russia Question: 14:14–21:10
• AIIB, NDB, and China: 21:10–26:27
• North Africa Lessons: 26:27–28:51
• MDBs and Global Public Goods: 28:51–32:03
• Candidate Closing Statements: 32:03–35:11

Conclusion

This side-by-side discussion offers a rich contrast of experience and vision. While both candidates champion EBRD’s private sector focus and the value of complementary engagement with new and existing development banks, differences emerge in their perspectives on expansion, democracy promotion, and leadership style. Chakrabarti emphasizes growth, reform, and institutional memory; Belka foregrounds transition experience, pragmatic reform, and the opportunity for leadership from within the transitioning member countries themselves.

Whether you favor continuity or a new transition-led direction, this episode provides a clear, engaging window into the key debates over the EBRD’s future.