As ministers and central bank governors gather for the annual World Bank and International Monetary Fund spring meetings, Werner Hoyer, EIB President, says that multilateral financial institutions are powerful tools for tackling global challenges and must now redouble their cooperation and step up support for the investment, inclusivity and innovation the world needs.
The annual World Bank/International Monetary Fund spring meetings this year are taking place under the planet-wide shadow cast by three generation-defining challenges: conflict, climate change and COVID-19.
Putin’s attack on Ukraine is not a European crisis. It is an event that changes the international order the world over. Russia’s breach of international laws and Putin’s contempt for human life have shaken the multilateral system to its core. The future of our planet, of climate change, of peace, prosperity and the fight against poverty, even access to food and energy, are in jeopardy as a result of the war.
No one will be safe unless Europe, the United States and like-minded democracies act together. Putin’s attack exacerbates all of these challenges, calls into question every form of multilateral cooperation and trust building, and weakens institutions, which have an essential role in tackling planetary emergencies.
International cooperation, and the institutions upon which it is built, are the best tools the world has to confront global challenges. Multilateral financial institutions have been both a symbol and a tangible example of global cooperation for decades. They are a powerful tool for prosperity, the reduction of poverty and inequalities, and for tackling global challenges like climate change or pandemics. Multilateral institutions such as the European Investment Bank embody cooperation, partnership and mutual respect, which for years have proven that joint action can have a real, positive impact on people’s lives.
Rather than retreat in the face of assaults to our multilateral values and our work, now is the time to redouble our efforts and work harder than ever with our partners. We must do this despite the attack on life, peace, and multilateralism, and in part on behalf of the very people whose governments lead those attacks.
We must continue to invest and leverage investment – only more. We need to invest in solutions to our planetary problems and most importantly, galvanise the energy and ingenuity of the private sector. The magnitude of investment needed to address global challenges such as pandemics and climate change is so great that the private sector must play a central role. There isn’t enough public money in the world, and what there is will now be under increasing pressure to finance security and defense. Now as before, creating a virtuous cycle of impactful and sustainable investment requires partnering with and crowding in the private sector.
New forms of "public private partnerships", where the state takes on limited financing risks can be very helpful in mobilising private capital. The advantage of these “risk-sharing' instruments”, as they are called, is that they are market-based and they steer investment towards the public good, harnessing the full range of creativity of the private sector, and requiring only a small amount of public funds compared to the investments mobilised.
We must continue to be inclusive – only more. Inclusivity is vital to maintain public support for the difficult choices ahead as well as being just and fair. More than ever before, we must make sure no one is left behind, be it in tackling and recovering from COVID-19 or in addressing climate change. Our new development arm, EIB Global, into which we have concentrated our decades of overseas development experience, will strengthen our global reach and cooperation with the most vulnerable communities around the world.
EIB Global’s work, especially in the most fragile economies, is more than aid. It is a strategic investment in global public goods that benefit every nation, as well as well as each project’s investors and beneficiaries. We must increase enhanced external grant support for investments in lower-income countries that are in the nature of global public goods, as the EU has begun to do by blending EU budget and grants.
We must continue to innovate – only more. We must make our societies greener, more energy efficient, much more quickly than we have been doing so far. To address the problems of tomorrow the world needs more than the technology it has today. We must invest in innovation everywhere. Uniquely among multilateral development banks, because of our European membership and global scope of action, we help other countries unleash sustainable growth with technology and knowledge. This provides an opportunity to accelerate development by leapfrogging intermediary stages of industrial growth and going directly to a green, clean economy. Here again EIB Global will play a pivotal role.
Despite the immediate problems we face the world cannot afford to lose focus on the fight against climate change and on adapting to its expected consequences. This challenge is becoming more urgent and intractable. The same is true for environmental challenges such as biodiversity and the loss of natural ecosystems, which have far-reaching consequences for human health, food security, political stability and the fight against climate change as well.
Crucially, even as we tackle global challenges, we must now prioritise the need to secure our democracies and our ability to act autonomously, as we cannot afford to depend on undependable countries that oppose openness and cooperation and with whom there is no basis for mutual trust. This validates the course that the European Investment Bank and other multilateral lenders have taken so far, which has been to promote renewable energy sources such as wind and solar power, as the solution to cutting carbon emissions and to ending our dependence on autocratic countries that would use energy and raw materials as a weapon against us. We must now continue this course more rapidly and with more determination than ever.
Our ability to confront autocratic aggression and action is closely linked to our prosperity and economic strength. That is why cooperation between the United States, the European union and like-minded democracies needs to make a quantum leap. We need to jointly focus on investing in our ability to act and protect our values and prosperity. Advanced fields such as cutting-edge renewable energy technologies, artificial intelligence, space, quantum computing, digital technologies and bio-engineering are set to be the foundations of future economic success in the 21st century. The EU, US and like-minded democracies need to invest strongly, include new partners, and firmly maintain the lead in these critical areas.
At the same time, we cannot give up and must aim to reinforce, stabilize and reform multilateral bodies involving both democracies and non-democracies. These bodies provide indispensable fora for negotiating differences and for pushing for solutions to planetary challenges – solutions that will ultimately create a better life for everyone, whether they live in Europe or Asia or whether they are Russian or Ukrainian.
The European Investment Bank’s aim is to help build a world in which all people – pursuing their diverse cultures, religions and ideologies – are able to achieve prosperity through a sense of free personal agency, embedded in nourishing societies that live within our planet’s limitations. These objectives are enshrined in the United Nations Universal Declaration of Human Rights and the Treaty of the European Union.
The work of the United Nations is crucial. We fully share the objectives of the United Nations Agenda 2030 and the Secretary-General’s ‘Our Common Agenda’. The European Investment Bank actively supports enhanced cooperation between the United Nations System and the Multilateral Development Banks as this is key to accelerate the global implementation of the Sustainable Development Goals and part of the answer to create more global solidarity.
In this sombre moment of fractiousness, the European Investment Bank’s homogenous membership, made up solely of EU Member States, lends it unity of purpose and the capacity to act at the service of democracies’ goals.