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