On September 21st, the Global Business and Economics Program along with the Rafik Hariri Center for the Middle East hosted a lunch conversation with Dr. Thomas Mirow to discuss ways for the European Bank for Reconstruction and Development (EBRD) to contribute positively to the democratic transformations taking hold across the Middle East and North Africa.
As a result of the experience the EBRD gained from the economic transitions in Central and Eastern Europe, the Bank is seeking to aid the economic and political developments of the Arab Spring. It is important to note that the Bank is continuing its work in Central and Eastern Europe, and its $2.5 billion annual funding in the MENA region is additional to its CEE funding.
The Council brought in financial, regional, and political experts to provide guidance on best practices and case studies in effective development lending. Participants identified four key focus areas for EBRD involvement and investment:
- Fight against graft and corruption within national governments;
- Upgrade and update regional infrastructure;
- Improve access to energy;
- Develop functional judicial systems that protect the rule of law.
In much of the Middle East and North Africa, citizens often see capitalism as a contributor and enabler of corruption and favoritism, rather than a solution to widespread economic depression. Changing public opinion will require real and visible changes to how business is done in the MENA region. It is a generational transformation that requires urgent attention. Only by clearly demonstrating the effectiveness of international lending efforts will people truly accept capitalism. Therefore, as the Bank expands its regional focus, it must effectively engage the private sector to encourage and promote equitable development. Once companies and investors are comfortable that governments will protect their rights through a free and fair judiciary supported by a democratic society, they will increase their investments in the region. This will only help reinforce the idea among the people that capitalism and foreign investments are an effective path to prosperity.