Statement by Mrs Valgerdur Sverrisdottir, Minister of Industry and Commerce, Governor for Iceland. EBRD Annual Meeting, Riga 22-22 May 2000.
Statement by Mrs Valgerður Sverrisdóttir
Minister of Industry and Commerce
Governor for Iceland
EBRD Annual Meeting
Riga - 20-22 May 2000
Mr Chairman, fellow Governors, Ladies and Gentlemen,
Let me start by congratulating the Management and staff of the EBRD for the financial results. The Bank is returning to profit again after the first loss-making year of its history.
Mr Chairman, the EBRD’s operating results however, namely the transition from the command to the market economy, are always more difficult to evaluate. The detailed assessment, which the EBRD uses to ensure that operations are designed to achieve the highest possible transition in the region, is of utmost importance, and it is good to see that Management is consistently improving this assessment process. I would like to mention and especially recognise the work of the Office of the Chief Economist in this process of evaluating the transition impact of each project and accessing the transition in general in the Transition Report of the EBRD.
I take, however, great comfort in knowing that the EBRD has a Project Evaluation Department, which evaluates the work done by the EBRD in the past. As the transition process will be a complex, difficult and lengthy process it is of vital importance to make use of "lessons learned" in the Bank’s operations. Mistakes will be made along the way in fulfilling our risky mandate. It is inevitable. The important thing is to learn from our mistakes and rectify the course if necessary. It is of course also crucial to take note of the good things we have done and to build on them in the future. The work of the Project Evaluation Department is the tool to use for this purpose and could be given even more attention in the Bank’s work.
The staff and Management of the EBRD should be praised for their efforts in 1999 in restructuring the EBRD´s portfolio following the undermining effect of the Russian Crisis in August 1998 on many of the Bank’s projects.
I have also noticed from the Annual Report that the pipeline of projects has not only increased by Euro 1.2 billion from the previous year but that old potential projects have been scrapped and removed from the pipeline due to new circumstances in the region. I am sure that these efforts by staff have made the Bank’s pipeline of projects stronger and consequently will strengthen the Bank’s future operations in the region.
Mr Chairman, during the course of the year the Board of Directors discussed the Bank’s Human Resources Strategy. I believe that the employees of the EBRD are among its greatest assets. We have been asking a lot from our employees in the past due to the difficult operational environment and I am sure we will continue to do so in the future. Although we need to have the right balance of new and experienced staff on board, the relatively high turnover of the Bank’s staff is of concern. It is of concern because the EBRD needs in the future to build on the extensive experience of its staff members. In other words the corporate memory is essential to a transition bank like the EBRD.
We especially welcome the efforts made by Management to enhance the Bank’s local presence in the region by transferring a number of bankers from the Headquarters to the Resident Offices. This can strengthen the managerial capacity of the Bank and enhance accountability for decisions and their implementation. As this decision can affect the morale and the motivation of staff I hope Management will implement this decision carefully over a period of time and give careful attention to career development for all employees involved.
Mr Chairman, there have been remarkable achievements in some countries since the fall of the Berlin Wall but in others long-delayed reforms are still to come. Although the role of the EBRD along with other investors is important, the success of transition depends mainly on the respective Authorities in the 26 countries of operation. Without the determined advances in macroeconomic policies and reform policies the EBRD can do little to push transition forward. In the years to come the challenge for the EBRD lies in supporting and guiding the early stage countries on their way forward in this respect. Here the joint efforts and co-operation of the respective International Financial Institutions are needed if we are going to succeed.
Mr Chairman, I would like to thank our former President, Horst Köhler, for his work as President of the EBRD. [(If the president has been appointed) I also welcome the appointment of the new President, Mr. Jean Lemierre and wish him well in his new role.] I would also like to thank Charles Frank for once again taking on the helm of this ship in the interim.
Finally, I would like to thank the Latvian Authorities for hosting this Annual Meeting in the beautiful City of Riga. (The administration of this event has been perfect and I congratulate the Latvian Authorities.)
Thank you Mr Chairman.