China’s long-term policy decision to join all multilateral platforms it can and exchange ideas and practices with global institutions has been “a good thing,” said President of the European Bank for Reconstruction and Development (EBRD) Suma Chakrabarti.
China’s engagement with the multilaterals has shown that the country wants to play a part in global governance, Chakrabarti said in an interview on the sidelines of the 2019 annual meetings of the International Monetary Fund and the World Bank Group on Wednesday.
China has also wanted to learn lessons from different multilateral organisations, he said. “I therefore applaud China’s engagement with the multilateral system.”
Since joining the EBRD in early 2016, China has “really strengthened” the relationship with the bank, Chakrabarti said. “I think on all the fronts we’ve made progress.”
“It’s not just Chinese banks and Chinese investors, companies who are now investing in EBRD projects. That’s great,” said the bank president. “We have a lot more in the pipeline.”
“Secondly, I think also our work with Chinese think tanks, Chinese research institutes, the Chinese government on various policy ideas has really increased,” Chakrabarti said.
Thirdly, he said, the EBRD has enhanced cooperation with the China-initiated Asian Infrastructure Investment Bank (AIIB), which he thinks is a “real model of applying the highest environmental and social and other governance standards.”
Chakrabarti said his bank and the AIIB set up a joint unit in Beijing about two years ago, which has been “very successful” in trying to bring the two organizations together and has also promoted exchanges between the EBRD and Chinese companies, banks, think tanks, research institutes, the Chinese government, etc.
Speaking of the Belt & Road Initiative, Chakrabarti said he thinks it can make a major contribution in tackling some global development challenges and promoting multilateralism as long as projects meet good standards and avoid high debt.
Chakrabarti said he looks forward to the EBRD working with the Chinese government, the Chinese private sector and others to ensure the initiative “works well.”
Looking ahead, he thinks “continuity” and “stepping up” is the next stage relationship with China.
“I would like to see more co-financing with Chinese banks and Chinese corporates. I would like China also to discuss more with the EBRD some ideas about certain countries,” especially countries where the EBRD has invested heavily, such as Turkey, Egypt, Ukraine and Greece, he said.
While acknowledging that multilateralism is “under strain,” the EBRD president said he is still optimistic in the future of multilateralism, because progress on climate change and inequality, among other issues, “would not have been possible” if it was not for the work of multilaterals.
Nearly half of the EBRD’s lending so far this year has been in the green economy area. He expects to see future growth in investments in renewables and energy effciency.
“I think that’s an area where actually the multilaterals can play a very strong part,” he said.
For those who question multilateralism, Chakrabarti said the best way to explain to them why multilateralism matters is to show them how multilaterals have made a difference in people’s life, such as by helping provide safe and environmentally friendly public services in some areas.
“We need to do more of that sort of thing and we need to then also market, communicate, advertise, whatever word you want to use to show that without us, those things would not have happened,” he said.