Remembered for a statement that was actually never made, the prime minister of the United Kingdom for six years Harold Macmillan. He was said to have responded wittily to a reporter when asked what might possibly knock governments off course with “events, dear boy, events.” And unfortunately that is the actual state of the economy now. When the Covid hit the world in 2020, the economy was considered to be all right. But as the times passed threats started flowing from politics. The trade war between the United States and China, a surge of anti-globalisation or the rise of populism, to name just a few other than from the fundamental economic malfunction. When the European Bank for Reconstruction and Development (EBRD) published its half-yearly forecast in November 2019, it stated that the Average growth in the EBRD regions is expected to (…) pick up to 2.9 per cent in 2020. This represents a downwards revision compared with the previous forecast published in May 2019 (of 0.1 percentage point in 2020).” In October, the EBRD revised its growth forecast for the 38 economies in Europe, Asia and Africa in which it invests downwards to -3.9 percent for this year. Then came the Corona and sent the entire global economy to take a dive with no parallel in its peacetime. According to the latest IMF (International Monetary Fund) forecast, global growth is projected at -4.9 percent in 2020, and the recovery is expected to be more gradual than previously hoped. In October, the EBRD revised its growth forecast for the 38 economies in Europe, Asia and Africa in which it invests downwards to -3.9 percent for this year.
EBRD will help economies implement contributions to achieve alignment with the Paris Agreement. The Bank has adopted the concept of “just transition” to make sure that the benefits of the green-economy transition are shared while protecting vulnerable countries, regions and people. A first-of-its-kind project in Northern Greece, where coal-fired power plants will gradually be phased out and replaced by the largest renewable-energy project in the country to date with EBRD support, was signed in October.
Introduction of gender and economic inclusion strategies, promoting the advancement of women, youth, people living in remote areas and other disadvantaged groups in the economies to which the Bank invests. The EBRD’s ‘ Women in Business program’, which has channelled more than €500 million in loans to women-led enterprises in 18 countries and offered complementary advisory services, is but one of the many examples of the Bank’s successful activities in this area. Technology has always played its crucial role in promoting inclusion and this pandemic radically changed the work for millions and the concept of remote working is here to stay. This is boosting the expansion of e-commerce and e-finance, already creating new business opportunities.
One way through this can be digitalizing the processes which will improve governance and transparency, for instance, in procurement, a better resource management will reduce energy and carbon intensities and monitor the efficient use of land and energy. This step has already been taken by the EBRD such as supporting administrations s in the Western Balkans, North Africa, the Middle East and Central Asia, and is helping SMEs to go digital. A greener economy, inclusion and digitalization had seem to be at the top of the EBRD’s agenda without the COVID-19. And now these themes have urgent orders to be addressed more so than ever. This crisis has accelerated the developments which were already in progress and also the ones which were long overdue. A vaccine might come against this corona virus but there can never be a vaccine against greenhouse gases and climate change, inequality or the digital divide. And here the ERDB stands at the fore front as the only remedy is to take joint action.