* Concerns swelling about strength of democracy in some
* EBRD's new countries of operation in N.Africa face
By Carolyn Cohn
LONDON, May 19 The European Bank for
Reconstruction and Development's president-elect said the bank's
role in promoting democracy through its investments would be a
central focus for his term, as the EBRD agreed a 1 billion euro
fund for North Africa.
In addition to the impact of the euro zone crisis on the
bank's emerging Europe region, there are increasing concerns
about the strength of democracy in countries such as Russia,
Ukraine and Kazakhstan, while the bank's four new countries of
operation in North Africa face political instability.
Suma Chakrabarti, who was elected the first British EBRD
president at the bank's annual meeting this weekend, told
reporters the bank was already reviewing the way it pursues its
mandate to promote democracy, and he was keen to follow that
"This is an important part of why I applied (for the
president's job)," Chakrabarti, who is currently permanent
secretary, the most senior civil servant, at Britain's Ministry
of Justice, said.
He said in a letter to the emerging European development
bank last month in support of his campaign for president that it
was "important for the Bank to remain a trusted but critical
partner" as it sought to ensure that the countries in which it
invested showed multiparty democracy.
Non-governmental organisation Bankwatch has said the EBRD
needs to tighten up its definition of countries applying the
principles of multiparty democracy.
In an open letter to the EBRD in March, it criticised levels
of democracy in three of the bank's new countries - Egypt,
Morocco and Jordan - and said:
"The EBRD should also regularly revise its policies in
relation to existing countries of operation such as Kazakhstan,
Azerbaijan and Russia, where democratic and pluralist principles
are clearly not implemented."
The European Union said in its governor's statement to the
meeting that it wanted to "stress that the need to secure
democracy, basic freedoms and rights must be kept as a key
dimension of our cooperation with the EBRD in this region."
The EBRD was set up in 1991 to help the countries of the
former Soviet Union develop market economies but has gradually
extended its reach, voting last year to invest in North Africa
following the Arab Spring uprisings.
Shareholders agreed a 1 billion euro special fund for North
Africa at this year's meeting, ahead of full country
ratification of the bank's geographic expansion.
Outgoing president Thomas Mirow, who lost to Chakrabarti in
a five-candidate race, said the bank's 65 country and
intergovernmental shareholders discussed the impact of the euro
zone crisis on emerging Europe.
"There was not a debate about how to remedy the problems of
the euro zone itself, but rather about what can be done to make
the economies in central and eastern Europe more resilient and
less dependent on these events," Mirow told reporters.
The EBRD in recent years increased its capital to 30 billion
euros ($38.17 billion) to help emerging Europe through the
financial crisis, and invested 9.1 billion euros in the region
It plans eventually to increase its annual investments to
around 11 billion euros, including 2.5 billion to North Africa.
The bank is aiming to make its capital go further through
partnerships with pension funds and sovereign wealth funds.
"The number one challenge is maintaining the triple-A
rating," Chakrabarti said.
The EBRD's 2013 annual meeting will take place in Istanbul.