The European Bank for Reconstruction and Construction's (EBRD) Early Transition Countries (ETC) Initiative is celebrating its 10th anniversary this week.
The initiative, which was launched at the EBRD's annual meeting in 2004, was designed so the bank could engage more effectively with the smallest and poorest countries through smaller-scale projects. It entails greater efforts towards nurturing reform and increased outreach to international donors for support.
"The philosophy of the ETC Initiative has always been 'small is meaningful,'" EBRD Managing Director Olivier Descamps said. "We had to launch it because it was the only way for the Bank to be useful in countries which were at the early stage of development. We had to change our approach. We had to go small-scale. We had to go local. And we had to take a certain number of risks, but also reach out to the donors, to pull it off.
One of the biggest challenges was the weak institutional infrastructure in those countries. In order to prepare the right projects, and give the right advice to governments and to management teams of local enterprises and financial institutions, we had to capture the donors' ability to provide very scarce - but so crucial - technical assistance and grant financing."
The initiative is now operating in 10 countries, including Armenia, Azerbaijan, Belarus, Georgia, Moldova, Mongolia, Tajikistan, Turkmenistan, Uzbekistan and Kyrgyz Republic.
"Over the past decade, by focusing on smaller projects in the Bank's chosen ten countries of operation, it allowed us to make a larger contribution to transition in the Bank's most vulnerable nations," EBRD President Sir Suma Chakrabarti said. "At the same time as contributing to one of the Bank's core strategic directions of 'moving south and east,' it has also helped the ETC countries narrow the gap with wealthier countries."
ETC Initiative Director Chris Clubb said the number of projects financed in ETC countries has grown from fewer than 20 per year to more than 115 per year. ETCs now make up more than 30 percent of the bank's financing projects, up from eight percent in 2004, and total annual investment in ETC countries is more than $1 billion, he said.
The EBRD has also approved funding for the ETC until 2016. In addition, the bank has recently launched a Small Business Initiative to foster small enterprises in all 34 countries where it operates.
"The ETC initiative was one of the foundation stones in preparing the launch of the Small Business Initiative, and in the future I think, in due course, it is the SBI which will be a bank-wide goal," Descamps said. "So what I would hope is that the legacy of the ETC will be to bring the SBI to be the next generation of 'small is meaningful.'"
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