Opening Asia for Russia

05.12.2020 160 просмотров

Nikolai Podguzov took over as head of the EDB in June, at the height of the pandemic. Now the new head of the development institute, together with his team, is working on updating the strategy of the Eurasian Bank group and intends to set "super tasks" in order to bring the bank itself and the Eurasian economic integration to a new level. In an interview with TASS, Podguzov spoke about the areas in which the renewed EDB will focus, and about his readiness to meet any "black swans". 


— Nikolai Radievich, you came to the EDB this summer, right at the height of the pandemic. What challenges have you faced?


— Obviously, in a pandemic, the role of the development bank should change. The Eurasian Development Bank is an international financial organization         In such circumstances, investment decisions tend to be reluctant. Development banks are institutions with the resources and willing to lend in difficult times when private capital is reluctant to take risks. 


The pandemic has created great difficulties in terms of economic development and economic stability. The bank's mechanisms have been switched on to dampen negative effects, to moments that will allow the economies of the countries in which it operates to more easily overcome the crises provoked by the pandemic. Therefore, in this situation, we are loyal to our borrowers and, if possible, do not apply sanctions or mechanisms that we would normally have to include. We have provided a number of grants and funding lines to countries to make it easier for them to get through this period. Together with the borrowers, we have begun initiating a number of projects that will be aimed at the development of medicine, the expansion of the production of medicines and medical equipment.


Now the economies of the region have passed the first stage - the stage of adaptation to the challenges of the pandemic. In 2021, states face an equally difficult task: to ensure sustainable recovery growth. The ascent will be difficult, uneven and will involve a high degree of uncertainty. 


Therefore we can say that we comprehensively work in the mode of supporting the economies of the EAEU countries and Tajikistan in the context of the coronavirus and we will contribute to the sustainable recovery of the economies of the countries of the region.


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— Will the strategy of the development bank be rethought under the new conditions and with the new team in these new difficult economic conditions? 


— Any project begins with the goals and objectives that this project must resolved, regardless of the economic situation. When global goals are formulated, you come to an understanding of what kind of team will cope with the most effective implementation of these goals and objectives. This gives rise to the desire to form a team that will have the necessary professional skills and that will be on the same wavelength with you to implement those big tasks that we will outline together. I am a rather ambitious and energetic person, so I really want to set super-tasks and plan the most ambitious results, so that, having achieved most of these results, bring financial institution and the space in which this institution operates to a completely new level.  


EDB will have several key priorities for the next strategic period. 


Firstly, the Eurasian Development Bank is a leader among international financial institutions in terms of project activities on territory of the EAEU. We invest more in the economies of the EAEU countries than other international institutions. We want to maintain and strengthen these leadership positions. Moreover, the main task will be, among other things, to act as an integrator of investment resources in the EAEU space. This implies such a level of project expertise, when we will be able, using our knowledge and our own investments, to attract investments from national development institutions and regional financial organizations that are in charge of the regions in which we operate. That is, as an integrator of investment resources, we want to achieve a significant multiplier effect of investments from our participation in projects.


region. The deepest economic knowledge of the economies of the EAEU countries, understanding of the state of state administration institutions in the countries should and are within the competence of the EDB. We will deepen and expand this expertise. Our Center for Integration Studies will work in this direction and offer appropriate integration initiatives in the EAEU space. 


Third, the focus is on end-to-end integration projects. We strive to promote the development of the economy and the integration of countries. EAEU. It is necessary to create common infrastructure that affects several countries at once, projects that are cross-border, the so-called cross-cutting projects — this is the economic framework that should unite our economies, make them more efficient. This is a common transport and energy infrastructure, common approaches to solving the problems of the water balance of our space.


The fourth priority is work to align the institutions and economic development of the EAEU countries. Only then can we successfully implement integration initiatives when we have economies of the same level, institutions in these economies of the same level, and the same understanding of the problems facing the region. Therefore, the focus of our activities will, of course, turn on this as well. This is, in general, a classic function of an international financial organization in relation to the EAEU region.


The fifth priority is digitalization of the EAEU member states. This is an access to the common digital infrastructure and the implementation of digital strategy in the countries of the region. In this regard, we, of course, also want to be a leading organization. Here we are not only talking about the "Travel without COVID-19" project, which we are currently implementing, but also participation in the development of a platform for migration, solving issues of the functioning and organization of customs settlements, participation in the work on common  EAEU system. And this is a deep consultation of the EAEU countries in the field of digitalization of institutions, creation of platforms. Any project is currently associated with digital, with big data. Under these conditions, we must keep up with the times, acting as trendsetters and promoting them. A  "Digital Initiatives Fund" has been created in our bank, it has launched its activities quite actively, on the eve of the First Eurasian Congress we have summed up the results of the first competition of digital projects. We will award the winners at the congress literally this Friday.


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— What is this COVID-19-Free Travel Project?


- We're running this as a pilot right now, but I hope it gets bigger. The "Travel without COVID-19" project is, in fact, a prototype of the EAEU medical passport, when information about the status of testing (how "fresh" the test is, in which laboratory it was made) is contained directly in the mobile application, in which  a special QR code is generated. To move between the EAEU countries, the code must be green. Thus, we want to implement the idea of free movement between the EAEU countries in the context of a pandemic, taking into account all covid precautions. For such a project to work, the joint work of many experts and departments in all countries of the project is needed. It's not an easy task, but we solve it. 


— When do you plan to finalize the strategy and present the document?


— We have a strategy in place, which we are currently updating, and plan to come out with a deeply developed document by mid-2021. It is one thing to identify strategic priorities, to understand them, to realize and discuss them. It is another matter to decompose these strategic priorities into tasks for the bank, to build country strategies on them. This is also very important, because it is necessary to develop separate approaches for each country. Somewhere the focus will be on project activities, somewhere on development of institutions. Under these strategic goals and objectives, it is necessary to complete the formation of a team that will be able to bring them to life, to discuss these issues with shareholders. Very scrupulous in-depth work is underway to prepare this strategy.


— The goals and objectives are really ambitious, is there a need to expand the team under their implementation?


—  ;The bank team is already good and professional. We will offer targeted enhancements, according to the goals and objectives that we set. First of all, in project activities, in further strengthening of the analytical unit and in the creation of digital expertise. The Digital Initiatives Fund was created just recently, in fact, on the day I joined the bank. Therefore, here we still need to work on the team. In this case, put this project on a powerful development.


— Now we can talk about some KPIs that did you set for yourself when you came to the development bank?


— I can rather talk about what I will consider a positive result for the period when my contract with shareholders ends. I signed a contract for four years, and during this period I would like to launch and significantly advance in the implementation of end-to-end integration projects in the field of transport, energy and water, and implement several digital platform solutions. Against this background, if we talk about quantitative indicators, our goal is to double the bank's portfolio through the implementation of end-to-end integration projects. Now our current investment portfolio is about $4.3 billion. I believe that the bar of $10 billion in investments in the regions of the EAEU countries may well be overcome in the next three to four years.


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 Now it is important for large companies to take into account a possible meeting with new "black swans" in their strategies. What is EDB's plan and toolkit for unexpected shocks?


— We are a development bank, and we should consider the EDB as a group as a whole, and I believe that it is unification of all the instruments of the Eurasian Bank Group that makes it possible to achieve the maximum economic effect for the participating countries. In standard The instruments of the EDB group provide for the possibility of effectively counteracting various crisis phenomena brought by black and not completely bright swans. The fact is that the EDB group consists directly of the Eurasian Development Bank, which is a classic development bank. Secondly, we have the Eurasian Fund for Stabilization and Development, which the bank manages. This is an institution that offers tools aimed at budgetary balance and the implementation of institutional reforms. And in this case, it contains at the regional level the features and functions of two such institutions as the IMF and the World Bank. 


It is clear that the use of these resources largely occurs when countries experience less favorable periods in their development. In this regard, in 2020 to solve we provided an anti-crisis loan to the government of the Republic of Belarus in the amount of $500 million and a loan in the amount of USD 50 million to the Republic of Tajikistan. Therefore, depending on which swans we meet, we will use certain instruments that are in the line of the Eurasian Bank Group.


Here I want to remind you once again about the analytical expertise of the bank. The bank's macro forecasters model not only basic, but also alternative scenarios for the development of events. Conduct stress testing of scenarios and formulate recommendations based on this.


— How relevant is the issue of additional capitalization of the EDB now?


— "Bees can't be against honey." Therefore, we are always in favor. But we try to be responsible and as professional as possible in the direction we are engaged in, and we do not consider it necessary to raise this question until we have a clear justification for how we plan to manage these resources. At the moment, the level of capital adequacy of the bank is at a very comfortable level. It is significantly more conservative than the standard capital adequacy ratios for  commercial banks, be it Russian, Kazakhstani, Belarusian commercial banks. This is reflected in the bank's high credit ratings, which are higher than the sovereign ratings of the shareholder countries.  In this regard, we do not experience any difficulty in further increasing our investment portfolio. At the same time, the plans and tasks facing the bank are quite ambitious. Of course, I would like to solve super-tasks: issues, for example, of cross-cutting integration projects that affect several states that create interstate infrastructure. They are very capital intensive and require a lot of investment. In this case, of course, at some stage we will face the need to recapitalize the bank. We understand this and are working to offer our shareholders objective information in order for them to make a decision on the additional capitalization of the bank at the moment when it is necessary.

 

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