Funds? Bring projects

In an interview for Top Channel, the EBRD president declared that an economic regeneration would be slow and the economic growth would be low for at least two other years. As regards the financing of this institution for Albania, Mr. Chakabarti declared that they depend from the country’s progress and the improvements in the business climate.

Top Channel: Mr.President, 2012 was a difficult year for the Eurozone and the Balkan Region. What are your expectancies for this year?

S.Chakrabarti: What I am expecting is a slow regeneration. I think that 2012 was a very difficult year. Some countries in the region took very difficult decisions, especially regarding the fiscal consolidation. More structural reforms are needed for this year, more improvements in the business climate, so that we can return investments in the region. I think that we will have a slow improvement of the economic growth during 2013, and even better in 2014.

Top Channel: Last year, together with the World Bank and European Bank of Investments presidents, you announced a 30 billion EUR package for the region that would be used in two years. What is happening with this plan?

S.Chakrabarti: The purpose of this plan is to regenerate the economic growth. If you remember the first phase of the crisis, the first duty was to be sure that the banks would not go bankrupt and that they had the necessary liquidity to survive. The issue now is the economic growth. We must enable liquidity from international and domestic banks in real time. The 30 billion EUR package that we announced for the region has this purpose. But to reach this goal is not only a matter of money. Money doesn’t buy everything. What we need is reforms.

Top Channel: What reforms, more specifically?

S.Chakrabarti: In many countries it is about the tax and customs administration. The judiciary reforms are essential as well, and in some countries like Albania, the land ownership reforms are important for making it easier for foreign investors.

Top Channel: Is there any formula or criteria on how this financial package will be shared among the countries of the region?

S.Chakrabarti: No! We operate mostly with the private sector. What we seek is requests by business for possible projects or partners. We don’t establish stricter criteria for some countries. EBRD will use 4.5 billion EUR from the 30 billion EUR package in the next two years. How will the money will be shared, it depends on the projects of the existing or new businesses.

Top Channel: You are mentioning reforms, while one of the biggest problems of Albania, according to international institutions is the public finances and high debt.

S.Chakrabarti: On my opinion, the adequate public debt level will be decided by each country. There is no given rule about what is adequate for all countries. Albania must decide what public finance order is better for them. You government feels that they don’t have too much fiscal space now, and for this reason they are asking us and other donators to focus on developing the private sector, not the public one, with the purpose to involve the private sector in projects, and this is what we will do.

Top Channel: Can we expect a significant increase of the financial help from EBRD in the next two years?

S.Chakrabarti: In the last three years, our financing for Albania has increased with 240 million EUR in total. Only in 2012, 70 million EUR were used. The basic scenario is to reach 80 or 90 million EUR this year. These are only the EBRD financings, without counting those of the European Bank of Investment and the World Bank. But the flux of this help will depend on what I mentioned above, the request for projects. This is closely related with another factor, the business climate. I underline that this requires the business climate in Albania to be better.

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