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Resolution 2265 (2019)
Promoting democracy by developing market economy: does the EBRD model work?
1. Four years after its last debate
on the activities of the European Bank for Reconstruction and Development
(EBRD) and twenty-six years after an exchange of letters between
its President and the President of the EBRD, the Parliamentary Assembly
wishes to assess co-operation between the EBRD and the Council of
Europe. This co-operation is based also on the co-operation agreement
signed with the Secretary General of the Council of Europe and on
the Memorandum of Understanding signed with the Council of Europe
Development Bank.
2. The EBRD was founded in 1991 in response to the fall of the
Iron Curtain “to foster the transition towards open market-oriented
economies and to promote private and entrepreneurial initiative
in … countries committed to and applying the principles of multiparty
democracy, pluralism and market economics”. It has been considered
unique as a financial institution for its explicit commitment to
promoting democracy as well as open markets in the economies in
which it invests.
3. In the co-operation agreement concluded between the Council
of Europe and the EBRD in 1992, the two organisations agreed to
exchange information, particularly regarding the monitoring and
assessment of the development of democracy in central and eastern
Europe. The Assembly supports the activities of the EBRD by providing
parliamentary oversight of the EBRD’s operations from a political
point of view.
4. Over the past twenty-eight years, the success of the EBRD’s
investments in transitioning economies has seen demand for its expertise
grow far beyond central and eastern Europe. The EBRD has gradually
expanded its region of operations to the economies of central Asia,
Mongolia, Turkey, the southern and eastern Mediterranean (SEMED)
region, Cyprus, Greece and most recently the West Bank and Gaza.
It is now active in almost 40 countries.
5. The Assembly welcomes the ongoing direct and indirect co-operation
between the EBRD and the Council of Europe Development Bank and
encourages both institutions to pursue such co-operation. It also welcomes
the regular co-operation between itself and the EBRD, while noting
that there is still room for improvement.
6. The Assembly notes with interest that in 2016, the EBRD updated
its transition measures that clarified how it would fulfil its mission
of developing market economies. The new, more holistic transition
concept requires that a well-functioning market economy be competitive,
but also inclusive, well-governed, environmentally friendly, resilient
and integrated, recognising that there is more to transition than
purely building markets and the private sector.
7. The EBRD invests in countries that show little commitment
to the principles of multiparty democracy and pluralism, considering
that long-term convergence between economic and political reform
is inevitable. Today, it has a great deal of information and experience
concerning these countries, but no conclusions on whether this really
is the case. Already in 2013, the EBRD stated that “the international
development community will have to exercise patience and persistence
in supporting long-term transition objectives and the underlying institutions
that are most conducive to achieving them”. The questions of exactly
how patient the international community must be, and just how long
the “long term” is, remain to be answered.
8. In particular, it is not yet clear whether, and, if yes, to
what extent, the EBRD’s activities to develop market economies in
its countries of operations have had an impact on promoting democracy.
In this respect the Assembly encourages the EBRD to carry out further
research on the possible links between its investments and the democratic
evolution in its countries of operations and to make available the
results of such research.
9. The Assembly welcomes the improvement in the depth and frequency
of EBRD publications. It notes, however, that there is room for
improvement as the EBRD still does not provide certain information
publicly, in particular performance-related information. Such information
would allow a better assessment of the impact of investments on
the progress of democracy.
10. The Assembly notes that, out of the eight countries which
were expected to “graduate” by 2010, only one has done so, and that
subsequent deadlines were also not respected. It calls on the EBRD
to clarify its policy with regard to graduation, the precise criteria
being applied and what is currently preventing countries from meeting
them and from graduating.
11. The Parliamentary Assembly resolves to continue its oversight
of the EBRD in terms of political added value and to make a new
political assessment of its activities when appropriate.