The European Bank for Reconstruction and Development (EBRD)’s shareholders agreed on Saturday May 19, during its Annual meeting and business forum taking place in London, to the creation of a €1 billion special fund to start investments in emerging Arab democracies, namely Morocco, Tunisia, Egypt and Jordan, partly in response to the wave of political change.
The expansion into the Southern and Eastern Mediterranean (SEMED) region follows calls for EBRD support from the international community and from countries in the region itself. Tunisia’s recent relationship with the EBRD is gradually getting stronger.
‘The EBRD has 20+ years of experience in supporting economic development in central and eastern Europe and the former Soviet Union. Since the fall of the Berlin wall the bank was founded with the mission to foster transition to economic development and economic growth through free market economies and support to the private sector. Like the fierce destruction Europe had suffered during the world wars, ‘Tunisia basically stands in a similar situation where people are again demanding a more stable economic future’, said an official from the Tunisian Ministry of Regional Development and Planning attending the Annual Meeting as a delegate.
‘The EBRD was created 20 years ago in similar circumstances (to the ones Tunisia faces). We are aware of the needs of countries in transition and we can offer our expertise and our knowhow to Tunisia’ stated Thomas Mirow, EBRD President, during his visit to Tunisia early this month.
According to Allan Rouso, EBRD Managing Director for Stakeholder Relations EBRD, ‘the aim for the bank is to improve financing of the private sector, including small and medium-sized enterprises (SME), via direct investments in loans and equities, while providing support and expertise through policy dialogue, capacity building and other forms of technical assistance.’
The first SEMED projects are likely to be concluded around September of this year, most likely in the sector of energy efficiency, ‘an area seemingly on the Tunisian government’s top priorities’ said Josué Tanaka, EBRD managing director for energy efficiency and climate change who announced the launch of the bank’s third phase of its sustainable energy initiative (2012-2014).
The bank is boosting its efforts to improve energy efficiency and deal with the threat of climate change with new investment in projects worth up to €25 billion over the next three years. Expansion to Tunisia, Morocco, Egypt and Jordan presents it with opportunities to share its operational, financial and policy expertise, added Tanaka.
But does going green and focusing on environment-oriented investments correspond to the Tunisian people’s most pressing demand: employment? When confronted with this question Tanaka responded that agribusiness and energy efficiency investments generate more jobs than any other economy sectors.
This is a claim that has previously been made by Mongi Smaili, a member of the Tunisian General Labor Union (UGTT) arguing that ‘a green economy would improve living standards for Tunisians’, as reported last month in Tunisia Live. Of the 1.2 million Tunisians living in poverty, nearly 75% of them are in rural, agricultural areas, according to the UGTT department of research and documentation. The countryside is precisely where Smaili sees potential for green jobs in Tunisia. “We only see economic solutions in huge industrial projects,” he admonishes. To stimulate a domestic green economy, Tunisia should not think big, he urges, but rather focus on small, local projects that involve desalination, solar panels, wind turbines, and water conservation.
Tunisia was hostile to foreign investments under the former regime of Zine el-Abidine Ben Ali. Today effort urgently needs channelling into serious policy making, leading to encouraging investment laws. The Bank expects to be able to eventually invest up to €2.5 billion a year in the new region, while not detracting from investments in its existing countries of operations, where funding totalled €9.1 billion in 2011.
This is a column for Arab Awakening's This week's window into the Middle East.