| In typical bureaucratese, the pensive EBRD | | | | chairman, the suave and titivated Attali, the |
| analyst ventures with the appearance of | | | | bank is in a constant road show, mortified by |
| compunction: "A number of projects have | | | | the possibility of its dissolution by reason |
| fallen short of acceptable standards (notice | | | | of irrelevance. It aims to impress the West |
| the passive, exculpating voice - SV) and have | | | | with its grandiose projects, mega |
| put the reputation of the bank at risk". If | | | | investments, fast returns and acquiescence. |
| so, very little was risked. The outlandish | | | | In thus behaving, it is engaged in a |
| lavishness of its City headquarters, the | | | | perditionable perfidy of its fiduciary |
| apotheosis of the inevitable narcissism of | | | | obligations. It lends to criminal managers, |
| its first French Chairman (sliding marble | | | | winking at their off-shore shenanigans and |
| slabs, motion sensitive lighting and designer | | | | turning a blind eye to the scapegrace |
| furniture) - is, at this stage, its only | | | | slaughter of minority shareholders. It throws |
| tangible achievement. In the territories of | | | | good money after bad, cosies up to oligarchs |
| its constituencies and shareholders it is | | | | near and far and engages in creative |
| known equally for its logy pomposity, the | | | | accounting. Instead of Westernizing the |
| irrelevance of its projects, its lack of | | | | Easterners - it has been Easternized by them. |
| perspicacity and its Kafkaesque procedures. | | | | Its sedentary though peregrinating employees |
| And where the IMF sometimes indulges in | | | | are more adept at wining and at dining the |
| oblique malice and corrupt opaqueness, the | | | | high and mighty and at haughtily maundering |
| EBRD wallows merely in avuncular inefficacy. | | | | in the odd, tangential, seminar - than at |
| Both are havens of insouciant third rate | | | | managing a banking institution or looking |
| economists and bankers beyond | | | | after the interests of their nominal |
| rating.Established in 1991, "it exists to | | | | shareholders with the tutelary solicitude |
| foster the transition towards open market | | | | expected of a bank.Consider two |
| oriented economies and to promote private and | | | | examples:MACEDONIAThe nascent private sector |
| entrepreneurial initiative in the countries | | | | is nowhere to be found in the list of |
| of central and eastern Europe and the | | | | projects the EBRD so sagely chose to falter |
| Commonwealth of Independent States (CIS) | | | | into here. The Electricity and Telecoms |
| committed to and applying the principles of | | | | monopolies are prime beneficiaries as is the |
| multiparty democracy, pluralism and market | | | | airport. The EBRD is also a passive |
| economics. The EBRD seeks to help its 26 | | | | shareholder in both big universal banks - |
| countries of operations to implement | | | | until recently, conduits of state |
| structural and sectoral economic reforms, | | | | mismanagement. The SME and Trade Facilitation |
| promoting competition, privatization and | | | | credit lines were conveniently divvied up |
| entrepreneurship, taking into account the | | | | among five domestic banks (one went belly up, |
| particular needs of countries at different | | | | the managers of two are under criminal |
| stages of transition. Through its investments | | | | investigation and one was sold to a Greek |
| it promotes private sector activity, the | | | | state bank). Despite vigorous protestations |
| strengthening of financial institutions and | | | | to the contrary, none of this money reached |
| legal systems, and the development of the | | | | its proclaimed entrepreneurial targets. Two |
| infrastructure needed to support the private | | | | loans were made to giant local firms - the |
| sector. The Bank applies sound banking and | | | | natural preserve of commercial lenders and |
| investment principles in all of its | | | | equity investors the world over. The EBRD |
| operations. In fulfilling its role as a | | | | contributed nothing to the emergence of a |
| catalyst of change, the Bank encourages | | | | management culture, to the development of |
| co-financing and foreign direct investment | | | | proper corporate governance, to the |
| from the private and public sectors, helps to | | | | safeguarding of property rights and the |
| mobilize domestic capital, and provides | | | | protection of minority shareholders here. |
| technical co-operation in relevant areas. It | | | | Instead, it colluded in the perpetuation of |
| works in close co-operation with | | | | monopolies, shoddy and shady banking |
| international financial institutions and | | | | practices, the pertinacious robbery titled |
| other international and national | | | | "privatization" and the pretence of funding |
| organizations. In all of its activities, the | | | | languishing private sector |
| Bank promotes environmentally sound and | | | | enterprises.RUSSIAIts 2 billion US dollars |
| sustainable development."Grandiloquence | | | | portfolio all but wiped out in the August |
| aside, the EBRD was supposed to foster the | | | | 1998 financial crisis, the EBRD has now |
| formation of the private sector in the | | | | returned with 700 million new Euros to be - |
| revenant wreckage of Central and Eastern | | | | conservatively but not more safely - lent in |
| Europe, the Balkan, Russia and the New | | | | major energy and telecom behemoths.The |
| Independent States. This it was mandated to | | | | historic, pre-1998, portfolio appears |
| do by providing finance where there was none | | | | impressive. Almost 11 billion US dollars were |
| ("bridging the gaps in the post communist | | | | generated by the EBRD's less than 4. The |
| financial system" to quote "The Economist"). | | | | bottom line reads 94 projects. Yet, when one |
| Put more intelligibly, it was NOT supposed to | | | | neutralizes the infrastructural ones |
| transform itself into a long-term investment | | | | (including the gas and energy sector) - one |
| portfolio with equity holdings in most | | | | is left with less than 50% of the amount. Add |
| blue-chips in the region. Yet, this is | | | | "infrastructure-like" projects (water |
| precisely what it ended up becoming. It | | | | transportation and the like) - and less than |
| avoided project financing like the plague and | | | | 30% of the portfolio went to what can be |
| met the burgeoning capital needs of small and | | | | called proper "private sector". Moreover, |
| medium size enterprises (SMEs) grudgingly. | | | | even these investments and credits were |
| And it refuses to divest itself of stakes in | | | | geared towards traditional and smokestack |
| the best run and most efficiently managed | | | | industries: mining, food processing, |
| firms from Russia to the Czech Republic. In a | | | | pipelines, rubber and such. Not an |
| way, it competes head on with other investors | | | | entrepreneur in sight. And the EBRD's meagre |
| and commercial banks - often crowding them | | | | loan-loss provisions and reserves cast |
| out with its subsidized financing.One of its | | | | serious doubts regarding the mental state of |
| main mistakes, in a depressingly impressive | | | | both its directors and its auditors.To |
| salmagundi, is that it channelled precious | | | | varying degrees, these two countries are |
| resources to this budding sector (SMEs), the | | | | typical. Development banks, like industrial |
| dynamo of every economy, through the | | | | policy, import substitution and poverty |
| domestic, decrepit, venal and politically | | | | reduction, have gone in and out of |
| manhandled banking system. The inevitable | | | | multilateral fashion several times in the |
| result was a colossal waste of resources. The | | | | last few decades. But there is a consensus |
| money was allocated to sycophantic cronies | | | | regarding some minimum aims of such |
| and sinecured relatives (often one and the | | | | bureaucracy-laden establishments - and the |
| same) and to gigantic, state-owned or | | | | EBRD achieves none. It does not encourage |
| state-favoured loss makers. Most of it lay | | | | entrepreneurship. It does not improve |
| idle and yielded to its hosts a hefty income | | | | corporate governance. It does not enhance |
| in arbitrage and speculation. As banks went | | | | property rights. It does not allocate |
| bankrupt, they wiped whole portfolios of EBRD | | | | economic resources efficiently. It competes |
| SME funds, theoretically guaranteed by even | | | | directly with other - more desirable - |
| more bankrupt states.Thus, the only segments | | | | financing alternatives. It is not equipped to |
| of the private sector to benefit handsomely | | | | monitor its vast and inert portfolio. By |
| from the EBRD were lawyers and accountants | | | | implication it collaborates in graft, tax |
| involved in the umpteen lawsuits the EBRD is | | | | evasion and worse. It is a waste of scarce |
| mired in. It is a growth industry in | | | | resources badly needed elsewhere. It should |
| "countries" such as Russia. This is the | | | | be administered a coup de grace. And its |
| melancholy outcome of indiscriminate, | | | | marbled abode - so out of touch with the |
| politically-motivated lending and of a | | | | realities of its clients and its balance |
| lackadaisical performance as both lenders and | | | | sheet - should be sold to someone more up to |
| shareholders. In the spirit of its first | | | | the task. A bank, for instance. |