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“THE EURASIAN DEVELOPMENT BANK – IS THE ONLY DEVELOPMENT BANK THAT SETS INTEGRATION GOALS”
IGOR FINOGENOV,
Chairman of the Executive Board of the Eurasian Development Bank, Almaty
Igor Finogenov has been engaged in the Eurasian Development Bank’s activities since its creation. In 2005 by the order of the Russian Prime Minister he was appointed Aid to the Minister of Finance of the Russian Federation Alexei Kudrin, and was responsible for the creation of the Eurasian Development Bank (EDB) – an ambitious project of Russia and Kazakhstan, which is to become an efficient instrument of integration for the Newly Independent States in the post-Soviet space. In January 2006 in Astana President of the Russian Federation Vladimir Putin and President of the Republic of Kazakhstan Nursultan Nazarbayev signed documents establishing the Eurasian Development Bank, and six months later, in June 2006 Igor Finogenov was appointed Chairman of the EDB Executive Board.
On 7 December 2007 after signing the Memorandum of Cooperation between the EDB and the Institute of Economic Forecasting of the Russian Academy of Sciences, we had an opportunity to ask Igor Finogenov about the first achievements and further prospects of the EDB.
Eurasian Home: “What was the purpose of establishing the Eurasian Development Bank? Can the EDB be considered a political project?”
The EDB has existed for about two years now. The Bank was established in January, 2006 on the initiative of the Presidents of the Russian Federation and the Republic of Kazakhstan. The key element of the EDB’s Charter is that the Bank is open for accession by other countries.
The distinctive feature of the EDB is that it is a development bank, that is to say we are less concerned with gaining purely financial profit from our activities. Rather, we are trying to address such serious issues as facilitating integration projects in the post-Soviet space.
The legacy of the Russian Empire and the Soviet Union includes strong cultural, historic and economic ties, which implies intensive exchange of goods, workforce, and resources among the Newly Independent States. The mission of the Bank is to facilitate integration processes in the territories of the former Soviet Union, to develop market economy of the Bank’s member-states, to promote their economic growth and expansion of trade and economic ties among them by the means of investment activities.
The Bank sets the goal of investing in large-scale infrastructure projects, which determine and significantly influence integration processes in the territories of the former USSR. In other words, the Bank is destined to act as a catalyst for intensifying these processes in the EDB member-states.
I will cite the example of Tajikistan. The resources on the Eurasian continent, for example in Central Asia, are unequally distributed. Tajikistan possesses the largest potential of hydro resources in the region. In case Tajikistan manages to fulfill its energy potential, it could become more prosperous than Kuwait, and, in addition, it will provide electrical energy to Russia, Kazakhstan, Uzbekistan, China and other countries.
Such large-scale projects as the development of power industry in Tajikistan could only be realized in case the producer’s and the consumer’s interests coincide. Therefore, the Bank should in this case act as the element consolidating main participants of the infrastructure project.
As for the second part of the question, the EDB is surely a political project. I would like to stress that it is both an economic and political project, as we aim primarily at large-scale infrastructure projects, which also have an impact on the policy in the region.
Eurasian Home: “Is there a similarity between the goals of the EDB and other international banks (the World Bank, the EBRD, the Islamic Bank) and what are the differences?”
What we have in common with the aforementioned banks is that we all are development banks. But to achieve the goals determined by the founders of these banks we use different instruments.
As far as I know, the EDB is the only development bank that sets integration goals. No other Bank, be it the World Bank, or the European Bank for Reconstruction and Development, or the Asian Development Bank, has set such a task. This is what makes us unique, this is our distinctive feature in elaborating the Bank’s policy.
Eurasian Home: “Has the recent world financial crisis, which had a significant impact on the banking sector of Kazakhstan, lead to a revision or adjustment of the EDB’s strategy?”
No, the crisis has not affected our activities, the main focus has not changed. Speaking of the EDB’s capabilities and tactics, our Bank has higher rating than country rating of Kazakhstan, and even higher than Russia’s on one of the aspects.
This is yet another proof of the necessity and expedience of creating such institutions as the EDB, which thanks to their sustainable development ensure stability of different industries.
Eurasian Home: “What countries does the EDB regard as potential participants in the Bank’s activities? Which of them are the most attractive for investment? What are the chances that Ukraine will become an EDB member?”
The Charter of our Bank provides that we are open for joining by other countries. This was declared when the documents on the establishment of the Eurasian Development Bank were signed by President of the Republic of Kazakhstan Nursultan Nazarbayev and President of the Russian Federation Vladimir Putin.
At present, several countries are looking into possibilities of participating in the EDB’s activities. These countries are Armenia, Belarus, Kyrgyzstan and Tajikistan.
All these countries have a large potential and capabilities of implementing large-scale infrastructure projects. For example, if Russian companies start investing in the economy of Kyrgyzstan, this will signal that we are moving in the right direction working jointly with the executive bodies of the integration organizatioins.
As for Ukraine, I personally dream about this country becoming an EDB member. Recently, a letter about the possibility of Ukraine’s involvement in the EDB was transmitted to the Ukrainian Prime Minister (Viktor Yanukovych – editor). So far there has been no answer. I suspect that the Prime Minister has been busy with many other important issues.
Nevertheless, I sincerely hope that the Ukrainian government will consider this proposal sooner or later.
Eurasian Home: “How soon can we expect Armenia, Belarus, Kyrgyzstan and Tajikistan to become EDB members? What impedes the negotiation process?”
In fact, certain obstacles do exist, they are concerned with the complexity of the intrastate procedures. This is what prevents these countries’ decision-makers from joining the EDB.
It is difficult to say today, what country will join the Bank first. All the aforementioned states are close to taking this decision. Working groups have been set up at the governmental level, the negotiations are underway, and the details are being discussed. The top officials of these countries are on the verge of deciding in favor of joining the Bank’s initiatives.
Background information
Igor Finogenov – Chairman of the Executive Board of the EDB, born in 1959. Graduated from the Leningrad Shipbuilding Institute, USSR Academy of Foreign Trade, York University (Canada), Harvard Business School. In 1982-1987 – fellow in the NGO on the research and design of the energy machinery, in 1987-1991 – economist at the All-Soviet Union Association “Energomachexport”, in 1991-1993 – an expert, Secretary-General of the Committee on the conversion of enterprises of the defense complex of the Chamber of Commerce and Industry of the USSR and of the Russian Federation. In 1994-1998 – Chairman of the Executive Board of NOMOS-BANK. In 1998-2000 Mr. Finogenov was appointed at high-ranking positions at the Federal State Unitary Enterprise “Rosvooruzhenie”, including Deputy Director-General. In 2000-2005 he was President and Chairman of the NOMOS-BANK Executive Board. In 2005 he was appointed Aid to the Minister of Finance of the Russian Federation. On June 16, 2006 he was appointed Chairman of the Executive Board of the EDB.
The Eurasian Development Bank (EDB) is an international financial institution established by Russia and Kazakhstan in January 2006 with the view to facilitate the development of market economy of its member-states, their sustainable economic growth and expansion of mutual trade and economic ties. The EDB is called to become one of the key elements of financial infratsructure in the Eurasian space, effective investment vehicle for the development of cooperation between the member-states with the view to deepen integration processes and align the levels of social and economic development of EurAsEC member-states. Establishment of the Bank was initiated by the Presidents of the Russian Federation and the Republic of Kazakhstan. The charter capital of the EDB equals to US $ 1.5 billion. Membership in the Bank is open to new members; other states and international financial institutions can join the Agreement establishing the EDB. Official site http://www.eabr.org/
December 19, 2007
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