As I think we are a bit globally in a populist moment where support for international cooperation or support for development policies is less obvious. I think there is a bit of backlash on the globalization agenda, the multilateral agenda and so forth. But I really believe that on the other hand when you see the challenge that the world is facing and I was talking about pandemics with COVID but it's also true with climate change and with migration, being able to tackle some issues at the global level is extremely important. But there are common issues for humanity that are better addressed through cooperation and so forth. And I think it's important not to lose sight of that.
At a time where foreign development aid, multilateral institutions, and democratic norms appear to be on the back foot and conflicts around the world abound, there are some institutions that are still flying the flag of common international purpose, going about their business of rebuilding troubled nations and fostering a brighter future for their populations. The European Bank for Reconstruction and Development, or EBRD, founded after the end of the Cold War to help rebuild post-Soviet nations' economies, including post-Soviet Russia's. Now, the EBRD has found itself at the heart of another brewing cold war as it helps to rebuild Ukraine almost as quickly as Russia aims to destroy it and prepares for Ukraine's full reconstruction at a time when the war ends. At the helm of the EBRD since 2020 has been Odile Renaud-Basso, formerly of the French Finance Ministry, in charge of international economic policy, and at one time head of the Paris Club, a group of creditor nations that gives developing countries a fresh start by forgiving a portion of their debt. Since joining the EBRD, Odile has been there for the pandemic and for the bank's transformation into a major player in Ukraine, helping to keep its economy afloat and private investors invested. It's now looking to expand into sub-Saharan Africa and Iraq. I'm Chris Turk and I visited Odile Renaud-Basso at the EBRD's headquarters here in London for the big interview.
Basel, welcome to the big interview.
Thank you. Thank you for having me.
We are speaking at a time where development aid is in question. There are some challenges around it. There are challenges around multilateralism, multilateral development banks, the role that they play in society, the role they play with governments. I want to get your thoughts on all of that, but I wanted to start on a more personal level and ask you to go back through towards the start of your career. What was your own motivation for getting into this sort of sector of development? What was even your motivation for first taking an interest outside of France?
So I think very fundamentally part of my motivation comes from the fact that I've been raised in Algeria. So I was between three and ten I was living in Algeria. It was in the 70s. So after the independence of the country and my parents were working for the development of the country. My father was building steel. I think this gave me very early on an experience of what it means to live abroad, to work in different countries, very different culture and so forth. And then I was not necessarily thinking about working in development. But I was very much committed to work for public goods, public sector. So when I finished my studies, I went through the ENA school, which is a school for civil servants in France. I was very much interested by policy issues, politics, but also working. I mean always at some different point of my time I was thinking whether I should go working in the private sector or remain in the government, more in the public sector. I always decided, chosen to work in the public sector because I found that this was more in line with my values. Also, I was interested in designing public policies contributing to making the world a little bit better. And then at some point of time, I started to work on development issues. For example, I had the opportunity to chair the Paris Club, but also I did a lot of different issues. I spent quite a lot of time in Europe on European issues, but public sector and development issue were always commonalities in everything I've been doing.
Was there something about the role that France played in Algeria? That relationship as well, was that something you saw growing up that you thought about and how countries help other countries that they are affiliated with?
Yes, I mean it's a very difficult relationship as we see, and progress sometimes some backtracking of the times. And I also seen the challenges of developing countries, a lot of hope in the 70s, a lot of project optimism and so forth, and then some challenges, domestic challenges.
Is there a first trip, a first project that you remember in particular in your career, something a place that you visited that really brought home to you the importance of development?
No, I remember in 94 I joined the French Ministry of Finance. I started working in the desk which was dealing with some sub-Saharan African countries, the franc zone countries. And it was just after the devaluation of the franc, a 50% devaluation, depreciation of the currency from a fixed exchange rate a few months after. And we were putting a lot of financing programs in order to help Côte d'Ivoire, Senegal, Mali, Burkina Faso and so forth, to provide financial support to support social programs or specific projects in the countries to help the people who were facing a very big depreciation of the currency, loss of purchasing power and so forth. So there were a lot of social consequences and we were designing programs, working very closely with IMF and the World Bank to put in place the policies to help weathering the shock. And I remember that visit very vividly because I traveled in Côte d'Ivoire and in Senegal and discussing with the government and how we can provide support.
What did you see? What do you remember from that trip?
No, I remember seeing, for example, Abidjan, the great huge city, with on the one hand some big buildings because they had a big growth period with emerging dimension, but on the other hand some very poor areas where you have no electricity and so forth. And so the gap between the different parts of the cities and the different way of life and so forth were very striking.
You mentioned that perhaps at that time there was a bit more hope in the air. You also talked about your time with the Paris Club, which is a very interesting institution as well in this space. Tell me more about that time. Why was there perhaps more hope, more optimism in the air? What was going right at that point that really brought this optimism and connection between the developed and developing world more to the fore in a positive way?
I mean I think that for example when I was working in the Paris Club there were a lot of efforts put into taking steps to address the issue of debt burden, alleviate cost of debt services and so forth. So there were in the 90s some additional measures, additional debt treatment very often designed by the G7 to increase the level of debt reduction. And then at the end of the 90s it was the program of highly indebted countries, where it was really a very important level of debt reduction which was provided with the hope that this will really unlock some potential. There are some challenges, some remaining challenges, the trends today are not easy, but there has been also some progress and I think that we should not be too pessimistic about that. Of course, development has been quite uneven. Asian countries have been taking off more rapidly and in a more sustainable manner than sub-Saharan African countries. I think that there is some story of success in a number of countries that we should also keep in mind.
And I would like to get to some of those successes absolutely as well. But I wanted to start perhaps to move to you joining the EBRD, the European Bank for Reconstruction and Development in 2020. Not the easiest time to join an institution would certainly be an understatement with a pandemic happening. What was that time like?
It was indeed very strange because I started in November 2020 and I came for first four days on the 1st of November and then in London nobody was in the office because people were working from home. But then a few days after I arrived it was a lockdown, so I had to go back to Paris. I came back in December and then a few days, because it was open again in London, and then three days after it was locked down again. So people had to rush out of the UK because otherwise they would be stuck for the whole Christmas time and so forth. So it was challenging because you couldn't meet people in person and starting in a new institution with a new environment when you don't see people in person is very challenging because you have the formal meetings. I missed a lot at the beginning because there were a lot of new countries I had never been traveling in, had never been working with in the scope of EBRD, and not being able to travel in person to see what the country looks like, to meet with the leadership of the country is also a bit challenging. But I think we found ways to overcome that and at the end of the day I think it was also an experience. And I think the big positive outcome first of all is that we learned to work from home and I think now it gives more flexibility. And also it showed something when we talk about multilateralism and the deep connection between countries, so there is no country standing alone and being able to be protected from such a thing as a pandemic. So it throws in very concrete terms common challenge, common public goods and so forth. So I think that's something we need to remember in times where sometimes multilateralism is challenged, that there are issues that you need to work on together and that no country alone can sort out.
Well, this is perhaps a good moment then to help me explain what exactly the EBRD is and what kind of projects it runs, because this would have been certainly a challenging thing to do in a pandemic. But perhaps by way of that you can describe a little bit what kind of projects were going on when you joined. What does the EBRD do?
So the EBRD is a multilateral development bank which has been set at the collapse of the Soviet Union and the post-Cold War environment. So in the early 90s, their shareholders are governments. So they gave us some capital and with this capital we borrow on capital markets in order to lend to clients. And the EBRD's main characteristic is that it's focused mostly on the private sector. So to support the private sector. The mandate, the original bank was really set up as a new institution in this new environment post-Cold War in order to support the transition of communist economies toward market economies and to help the country. So that's why the focus was on the private sector, to develop private businesses, to transform the institution, to create market regulators, competition, strengthening the banking sector and so forth, to facilitate democracy and market economies. And so we invest in projects in countries to support the private sector, to strengthen institutions, strengthen the rule of law and so forth. So we provide financing, mostly as I was saying, private sector, 75% in the private sector. We can still work with state on public companies or government but more marginally. And we also accompany this financing with policy advice, technical assistance so as to reform, for example, some sectors of the economy. So the value of a multilateral development bank like us is that we've got some capital. We've got shareholders give us original capital and then we were able to deploy 220 billion euros of investment over this 34 years we've been active. It's not like a subsidy and that's very important to understand because when we talk about development aid and so forth, people have the impression that it's from budget and that you need to pay always. So in our case, they give us some capital and we generate more capacities to invest in a self-sustained manner.
You describe the way the EBRD started post-Cold War, this mission that it had to help those sort of post-communist governments and societies adjust and modernize. And then two years into your time here, we are plunged back into something like a Cold War with the full-scale Russian invasion of Ukraine. What was that moment like for you? Did it strike you that suddenly the EBRD as well is facing a kind of new mission, sort of like the old mission but in a completely different environment than it was before?
