Nice to be here. Would you agree with me that your bank has moved an awful long way from those early days and from its original mission . No, i wouldnt. I would certainly agree with you that we have expanded our geographically, but the mission is the same. Private sector development, the creation of effective markets. Were still actually operating in oui were still actually operating in our traditional region. But because of the success of the Business Model, we decided we should expand to turkey, central asia and north africa, as you said. It is a sign of success, not mission creep. The problem with that is that from the beginning, you were a Financial Institution underpinned by a clear statement of values. In the places youve just outlined where you operate today, those values do not seem to be applied in the same way. Sometimes there are values, such as political, democratic, values, pluralism, like stated. They are certainly applied inconsistently in some places. But we are very open about that. Im not talking about the way they are applied in the country, but with those projects in those countries. That is not correct. We have strong due diligent standards and our enviromental and socila actions are very, very clear. We apply those throughout our projects. Let us talk about specifics. You are big in central asia these days, lets talk about azerbaijan. Can you tell me that article 1 of your charter which commits the bank to applying the principles of multi party democracy, pluralism and Market Economics. How can that possibly be applied to an economy and a body politic like azerbaijan . We say when we do our strategies, and they are coming forward this year, we look at a iii point criteria to assess the politics. In some cases, azerbaijan falls short. We dont actually make a hard and fastjudgement because every country is on a scale essentially. What we have said about azerbaijan in the past is that they apply principles, though not perfectly. I think thats about right. Im not sure that is right. I dont know if you bother reading the independent human rights reports, but Human Rights Watch recently said they are systematically dismantling the countrys independence and society. Your first article, your adherence to multi party democracy, pluralism, Market Economics, i fail to see how two of those statements can fit together. I would argue that azerbaijan has had problems in terms of applying some of those standards. I would say it is the job of my team and i to take these issues up with them and we do that. But also, in the last few years, it is apparent that a number of human rights advocates have been released from jail in azerbaijan. The country is much less corrupt thanit the country is much less corrupt than it used to be two or three yea rs than it used to be two or three years ago. That is also verified internationally. Forgive me, but on the fourth of may 2017, the Bloomberg Financial news agency quoted you on the subject of azerbaijan saying this, a direct quote, progress in the last year or so has stopped, really. I think so. I think that is an accurate quote. Isaid if i said if you take the context of the last five years, azerbaijan has moved in the right direction but over the last year there has been a bit of stalling. Let us get this correct, you are giving hundreds of millions of euros to azerbaijan, with particular investment into the oil and gas sector, including the Southern Corridor youre investing in. You have done that for several years, and you are telling you that you overtly and explicitly believe that in the last year progress has completely stalled. But yet youve done nothing to stop your investment. In some areas only. It has continued in the fight against corruption, where they have made major progress in the last two or three years in fact. They are a benchmark in the region actually. In terms of human rights and other areas, we continue to have a dialogue over that. Be frank with me, what do you think the impact is on, for example, the president himself, of you and your people in the country consistently giving the azerbaijan country more Investment Capital . What does it say to him . We work directly with the private sector in azerbaijan. If you look particularly outside the oil and gas sector, because we want to help diversify. Your investment is in oil and gas. Yes. But the majority of projects are actually outside the oil and gas sector. As a proportion of your overall spending, how much goes into the oil and gas sector . Yes, it is a large per cent. Yes. But in terms of projects. With all due respect. The capital flows are measured ultimately by, you know, frankly, where the money goes, and most goes to the oil and gas sector. It is notjust a point of view, frankly, propping up a regime which many in the world believe is a systemic human rights abuser, but also one of the key pillars of your mission, you say, is to aid and abet the transformation of economies to a much more sustainable model. Yet in azerbaijan and a whole host of other countries, some of your key investments are in the age old oil and gas sector. Oil and gas is fundamental to these economies. Look at others, kazakhstan, russia in the past. And turkmenistan. Fundamental to the Economic Development of those countries. If youre into Economic Development you will want to promote those sectors. You talk about transformation, developing a new sustainable economic model. Im struggling to see how that fits with pouring all of your money into the oil and gas sector. Not all of our money goes into the oil and gas sector. Lots of our projects are not. They are in other sectors, trying to diversify the economy and raise the share of gdp not for oil and gas. Otherwise they will be in a cycle of oil and gas driving everything. I wonder if you learned a very painful lesson in 2014. Asi as i understand it, correct me if im wrong, by 2014, despite your beginnings in post soviet era eastern europe, you put your biggest single lump of money in investment into russia. In 2014 the wheels fell off the cause russia invaded crimea, annexed it, as a result the europeans and americans slapped sanctions on russia and you were told you had to stop all Investment Activity in russia. Did that teach you something . Well, what it told us is of course politics does play a part, i think in these institutions. Its not the first time. Im old enough to remember Tiananmen Square and what happened with the world bank at that time as well. It does play a role in international institutions. It gives an opportunity to diversify into other countries. Central asia as you mentioned and north africa too. You learned your lesson from investing, some would argue, far too much of your capital into Vladimir Putins russia at a time when nobody, i think, would really try to argue he was upholding the principles back to good, old article 1 about Market Economics and so on. I dont think many would argue putin was fulfilling those objectives. But you took that money after you were told you could no longer invest there and you put it into countries in central asia and north africa which again do not come even close to meeting your own founding principles. Some assumptions there that need challenging. In December 2012 the Russia Urge Strategy was approved after consultation with Civil Society and everyone else. There was a lot of to and fro, of course, with moscow over that. 2012, you were telling yourself that, yes, Vladimir Putins russia ticks all the boxes, fully free Market Economics, pluralism, multi party democracy. 0n on balance it did. Really . That was a terrible judgement. If it was a Mis Judgement on our part, dont forget Civil Society was consulted on this whole process. It is not exactly our own judgement. What has happened since in russia, yes, i feel if we did a new strategy for russia there would be a much more testing conversation, i suspect so, because of what has happened in russia. Going back to lessons learned, one of the other countries, and, again, correct me if i am wrong, it is now the biggest single city of ebrd investments, is turkey. That is right. The largest market right now. Are you confident that turkey, under president erdogan, is going in the right direction, one that fulfils all the criteria for the first article of your mission . That is why you have to look at progress over a long period. If you look at russia and what we were doing in russia, and i will come to turkey in a minute, we were investing 90 in the private sector, in the automotive sector built up by the ebrd. We were not working directly with the state. In turkey, it is 98 of our investment in the private sector. More policy reform. Renewables, capital markets, those kinds of things. We are not working directly with the government on very much. I would put this to you as a result of our conversation. The more you tell me about the long term commitment you have made in countries like russia in the past. You still have some investments there, and turkey today. My response is you have been there for the long term, you have tried to persuade yourself and the outside world that this kind of Economic Engagement and investment result in a transition to a more democratic and more free, both politics and economy, country. But the proof in the pudding is that it doesnt. Look at turkey and its direction of travel today. Turkey is difficult. No one denies that. That is why this year, many investors, foreign and direct, they are trying to do what we are trying to do. Sorry to interrupt, but how much do you think you invest in turkey this year . I cannot say for sure, but between 1. 3 and 1. 5 billion euros. It will still be the largest market without a doubt because of the size of the economy. But it has been 1. 9 billion. That is a lot. They fear it is rapidly going down a spiral of authoritarianism. The private sector in support of reform and reaching people who cannot get access to finance, like freelance entrepreneurs and other agencies would be denied that finance. Did you, when we talk about Renewable Technology and solar panels and all that, again, when one looks at a case study like mongolia, where you are working with a huge corporate like rio tinto on a copper and gold mine, do you feel that rather than transition economies, you are just making them extract more and more value out of what are ultimately finite commodity based sectors . I started in botswana, another mineral rich country. The issues are similar in mongolia. There are people wanting to invest. There are challenging politics with the share of revenue in particular. We talk about rio tinto and others in the government. We achieved a good result because we also brought in new investors with that investment in the mine. It was a progressive approach. Honest broker is an interesting phrase. Another point about the way the bank operates and those who receive your Investment Capital. In recent years, you have invested in a series of projects in serbia, i think in other parts of the balkans, romania is another example. You have offered a significant investment, the projects you have looked at have been mired in allegations of corruption, kickbacks, bribes. What Due Diligence do you do . Extremely strong. Commercial banks cannot achieve our home loan rates. Less than 1 of any projects in any year of approved projects go through that mechanism. If you look at the universe of projects we look at every year, we often reject because of integrity standards, social standards. We take all that out before we go to. In these cases, the serbian and romanian examples, another Coal Power Plant that has been under allegations of corruption, how did this get through . They have to go through strong compliance mechanisms. 0ur Environmental and social officers would check these out. That is not to say that maybe one or two projects, afterwards, things come to light. We act on those things. Two hydro projects, one in croatia and one in macedonia, we have actually cancelled the loans, because the Biodiversity Impacts were such that they were not right to go ahead with. It is not as if we dont care about these questions, we do. There is an after care issue as well. Trying to put this in a Bigger Picture context, we have talked about the origins of the bank. Investing capital through a bank which has, as its members, europeans and a number of other shareholders, that you could nurture and foster Free Market Capitalism and democratic values, and that your work would herald a new era. It seems to me, in some ways, thatjob has pretty much been done. If you look across eastern europe, most countries are anchored in the eu, and those who arent are desperately trying to get in. That is why it seems to me that you are desperately scratching around for new places you can invest money, and make money, and you are compromising on the core beliefs that the institution began with. I would of course reject that. Starting with the traditional countries we started with in eastern europe. Some of them have advanced very well over the last 25 years. Some are members of the eu and nato. Is the Transition Job done . Is it completely finished . No. A number of areas such as Energy Efficiency still remain. I think there is a lot of work to do there. In the areas of Taking Equity from companies, companies in poland and other countries, they could become regional champions and hopefully global over time. Those are things that are part of our mission. Yes, the challenge is diminishing, in the balkans, they aspire to be in the eu, some areas. We want to help them be credible members of the eu, using the Approximation Process which helps them. A lot of our shareholders think that this push on creating effective markets has been very successful and it should be taken elsewhere. It is the concept that the Business Model matters more than geography to many of our shareholders. Yes, taking it elsewhere, looking eastward, does it sit comfortably with you that china is now actually a shareholder . Yes it does. It sits very comfortably with me. How do you think they relate to article one of your charter . Article one applies to borrowing and china is not a borrower. If they are a shareholder, they clearly wield some sort of influence. They are one of 67 shareholders. In terms of its weight, it is perhaps more. China is very important for our region, central asia, and other regions. China is also important, ebrd is also important to the chinese model so that they can take it to their own banks. I can see that you are very aware that they are now rivals in the International Multi lending sphere. I dont think they are rivals. They have their own International Infrastructure investment bank. Its not their own. Its based in beijing. You would not quibble whether they decide their own strategy. Yes, i would. We helped set it up. We were the last multilaterally created bank. They asked for our help on governance, appraisal standards, environmental and social standards. They have pretty much developed what the older models have used. I dont think the chinese run this on their own. You are talking about shareholders who own about 25 , quite sizeable. We have financed projects. I know, thank you for reminding me. You are working with them in some countries we have discussed in central asia. The chinese want to develop their economic powers, some people call it the new silk road. You are now involved in road, rail and Infrastructure Projects with the chinese. Some would say you are doing their bidding. We are involved with the asian Infrastructure Investment bank, i dont think you would be calling the United States world banks. It is somewhat different. I would just point out the inconsistency. This is not a chinese lead banker. They have a chinese president who is the largest shareholder, but they have 77 other shareholders. We will incur finance with them in central asia, we had already done some. But we will do our appraisals and Due Diligence. I think it is a win Win Situation for the region. The point about the way the chinese do business, not getting stuck on the argument about whether the chinese are. They dont make value judgements. Repeating your article one mission to apply the principles of multi party democracy, pluralism and economics, that is the sort of value based submission that the chinese dont recognise. The world bank doesnt either. Many banks dont. I dont see why this is just about the chinese. They are not the only bank. Its about the fact that you have compromised, as you have sought to expand your markets, whether you have compromised your baseline principals. I dont think we have. We apply those principles for Central Asian countries and all other countries. We go through these criteria in great detail. A lot of Public Consultation as well, with lots of societies and organisations. I dont think we have compromised, we are rather transparent about it. A final thought on the international context. In the early 1990s, the west thought they had won the sort of values battle and the economic battle, and that liberal democracy and free markets were the way the world was going to go, and that free markets would propagate those western visions of how the World Economy should work. Things look a bit less clear now, not least with donald trump talking the language of protectionism, while the chinese appear to be the greatest defenders of open borders and free trade. Does the current Political Climate make it more difficult for you, particularly as western governments seem to be more economically nationalist . I think what has happened after the event for us. A few years ago, before some of the political changes in the west as you described, we were already seeing that many other countries we worked with, that globalisation was successful in everyone out of poverty, or large chunks of people. Relativity had Western Force but we had growing inequality. Take turkey. If you judge them on the basis of istanbul, you get a false reading. Go to the suburbs and you will see. Talk to female entrepreneurs who cant get finance. Also things were before the changes from donald trump and the brexit referendum. What we saw was that globalisation was not working for everyone. Inequality was becoming an issue. We published reports on this and we had a strategy to wrap this up. We have 16 Women In Business programmes in 16 different countries. Helping female entrepreneurs getting access to finance. We try to tackle Youth Unemployment in many countries, one of the byproducts of the age we are living in. It is dangerous socially, politically, economically. We are trying to match what firms and Companies Want with the education sector. Are you saying that globalisation, in its purest sense, doesnt work . I have thought that for some time. My view is that you have got to make Globalisation Work better. It has got to have an inclusive agenda. Suma chakra barti, we have to end there, but thank you very much for being on hardtalk. Thank you. Thanks very much indeed. The hot may weather is going to continue for a few more days yet, in fact, its going to turn increasingly humid, particularly across Southern Areas of the uk and the sunshine is very powerful well talk about that injust a second. In the short term, very quiet on the weather front, out there, lots of clear skies and a very warm night, in fact, first thing in the morning, across scotland temperatures are round 15 17 celsius. Heres the morning, around 8 oclock, you can see theres hardly a cloud in the sky. Honestly, clear blue skies tight across the uk. Temperatures already nudging up into the high teens, not far off 20 degrees, in some areas. Already 20 in the lowlands of scotland. And even in inverness around 18 celsius. 18 for stornoway as well. So a sunny and very warm start to the day. Through the course of the morning, well see many a few fluffy clouds building up but for most of us its going to stay clear, ands those South Easterly Winds will keep on wafting in that hot air out of the near continent. These values, quite conservative. In some areas, it could even get up to around 28 29, including in parts of scotland, also. A very hot day on the way there. 0n those uv levels high throughout the country, unusually high across Southern Areas of the uk. We often forget, whether it is 21 degrees or 29 degrees, you will burn just as easily if you are not protected from the sun with sunscreen, and out for any lengthy period of time. Then theresa change on the way. Friday night into saturday we could cease storms rumbling through Western Parts of the uk. Quite often when we get storms, things do turn a bit fresher, not necessarily on saturday. In fact, the air will keep on wafting in from the south, so humid air increasing and we will see the threat of thunderstorms. Temperatures perhaps rising to 28 30 degrees, just that little bit less hot there, across scotland. Into sunday, it does look as though fresher air gets into the northern half of the uk, but in the south, well see certainly increasing amount of cloud but also increasing humidity. Itll turn more sticky across the south during sunday. And yes, that is rain and these could be storms as well, so sunday into monday not only does the Humidity Increase but also the threat of thunderstorms and downpours. Very difficult to predict what the temperature will be across Southern Areas on monday, if it stays cloudy and rainy, maybe in the low 20s. If the clouds break, it could even get up to 25 degrees. But you can see a lot fresher across northern areas, so Bank Holiday Monday summary sunshine and showers and fresher in the north, still warm and humid and stormy in the south. Im kasia madera in london. 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