Emily Walker was on the first Board of the EBRD in April 1991 and reflects on the tumultuous first 2 years of the Bank set up to lend to the Former Soviet Union after the fall of the Berlin Wall.
The EBRD was set up at arguably one of the most significant moments in 21st Century history – the fall of the Berlin Wall. And while there are many international financial institutions (IMF, World Bank, Asian Development Bank, African Development Bank, among others), the EBRD was the first multilateral institution set up to lend to the private as well as the public sector, but also importantly only to countries who were pursuing “democracy”. Politics and private sector norms had theretofore NEVER been included in a mandate for a multilateral institution. And there were good reasons for their inclusion in the EBRD at a significant time in reshaping the post-War history.
Unfortunately, the lofty goals were lost in translation between the President of the EBRD, Jacques Attali, and the Board resulting in his dismissal and a setback for the Bank. The G-7 (Group of 7 industrial countries at that time) was dealing with a change no one had predicted, but which was welcomed with awe and inspiration. We were living the dream. Communism was defeated. And while the EBRD was one of many initiatives to help move the countries in that region to the “western” democratic and private sector approach, it was a very important piece of the arsenal in the pockets of Western democracies. And we all took it very seriously.
So what happened? The President failed to follow other multilateral norms and as happens in all good stories that end badly – the press got wind of it and the storm resulted in his early departure in spite of the fact, as he claims, that he was a “founding father” under then French President Mitterrand.
Having represented the United States on the Board of the EBRD at that time (and yes the only woman in the photo), the story remains etched in my permanent memory (along with my colleagues on the Board at that time with whom I remain close). The scandal that surrounded the Bank from inception 25 years ago until the departure of its first President in July 1993 handicapped the Bank from delivering its mission. The choice of the leader, struck in bargains by the G-7, fundamentally derided the EBRD from achieving early goals that left a legacy difficult to erase.
Next month, when the EBRD celebrates 25 years of achievements, I wonder whether or not it would have been different if the beginning were not tarnished. At the anniversary, it is time to reflect. And I will. More to come.