An EBRD delegation took to the Swiss Alps this week for the traditional World Economic Forum in Davos. An annual get-together of the great and the good, it’s the sort of place where you can’t walk more than 50 yards without spotting a Nobel laureate, a prime minister or another G8 central bank governor.

London Mayor Boris Johnson was a draw for a lot of the UK press. German Chancellor Angela Merkel opened the meeting with a speech that made clear she was determined to work towards a resolution of the eurozone crisis, but financier George Soros issued a stark warning about the dangers of too much austerity.

One senior UK editor said he had been told by his London desk that the mood in Davos was more optimistic than expected. But that wasn’t his own impression in the snow-laden streets of the Swiss ski resort.

It had stopped snowing by the time the EBRD delegation arrived but WEF founder Klaus Schwab had said earlier that he had not witnessed so much snow in the run-up to this year’s event since the Forum was set up more than four decades ago.

EBRD President Mirow’s meetings included a discussion with Ukrainian President Viktor Yanukovych, which received wide press coverage in the Ukrainian media. On Thursday he participated in a panel discussion looking at the outlook for the “political, social and economic landscape for Russia in 2012″ before heading for a series of bilateral meetings with senior representatives of shareholder countries, key players in our countries of operations and leaders of other international organisations.

In meetings with the media, both President Mirow and Chief Economist Erik Berglof outlined the risks to growth in eastern Europe from a failure to deal with the crisis in the west. They also outlined the coordination measures being undertaken by the EBRD and others to help deal with the impact of western bank deleveraging in the region.

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Customs Union

Common tariff and other arrangements

Since 1 January 2010 Belarus, Kazakhstan and Russia have applied a common import tariff.[1] Later that year they ratified a customs code and other documents establishing a customs union. Internal border controls have been removed, and the import tariff revenues accrue to national budgets in predetermined proportions subject to regular reviews (with Russia entitled to between 88% and 91% of all revenues; Belarus to 5% and Kazakhstan to 7%).

The supranational body of the Customs Union is a Customs Union Commission with around 150 staff. Decisions are taken by a qualified majority of 2/3 whereRussiaholds 57% of the votes andBelarusandKazakhstanhold 21.5% each.

WTO accession

Common import tariff will be adjusted over time to reflect Russia’s WTO commitments. It will also serve as a goods schedule for Belarus’s and Kazakhstan’s potential WTO accession, although the two countries will still need to negotiate their own schedules for services. Kazakhstan expressed hope to agree the terms of WTO accession by end-2012, Belarus is substantially less advanced in its accession process.

Potential new members

Kyrgyz Republic and Tajikistan are currently considering membership of the union. However, as an acceding member of the union must have a land border with the union, membership of Kyrgyz Republicis effectively a prerequisite for Tajik membership (Uzbekistan and Turkmenistan being unlikely “bridges” in the foreseeable future).

Ukraine has been repeatedly asked to join, with the invitation backed by studies that estimate Ukraine’s gains from membership at up to US$ 219 billion over 20 years, largely due to network effects. However, accommodating membership of the Customs Union with a potential deep and comprehensive free-trade agreement with the EU appears to be problematic in practice, even if theoretically possible (the two are not per se mutually exclusive, but the terms and conditions of both must be non-contradictory).

Eurasian Economic Community

Officials announced that the three countries entered the next stage of the project – Common Economic Area of the Eurasian Economic Community – on1 January 2012. Unlike the customs union, formation of the Common Economic Area remains very much work in progress.

The Eurasian Economic Commission, the supranational body of the community headed by Viktor Khristenko, previously Russian Minister of Industry and Trade, has not been effectively formed yet. It is temporarily stationed in Moscow but is expected to move to Astana. National staff quotas will be based on economic weight (84% for Russia) but, unlike in the customs union framework, key decisions will be taken by the Council (of country representatives) based on the “one country one vote” principle. Moreover, in many cases they will require unanimity.

The idea of a Eurasian Economic Community is not new – the term itself was coined byKazakhstan’s President Nazarbayev in March 1994, and the concept was reportedly first put forward even earlier by Grigory Yavlinsky, a Russian economist and currently leader of the Yabloko party. However, numerous previous attempts to launch such a union in the 1990s and 2000s were not successful. Smoother progress of the current initiative is attributed by some analysts to the willingness of members of the union, not least Kazakhstan, to counterbalance the economic rise of China.

The ultimate goal of the Community is free movement of goods, capital and people, as well as harmonization of macro economic and structural policies (with proposed criteria a la Maastricht rules, including ceilings on public debt and inflation). Mechanisms and institutions of the Community appear to be largely modelled on the EU and European Commission.

The Community also has a development bank headquartered in Almaty, the Eurasian Development Bank, with a somewhat broader membership (customs union members plus Armenia, Kyrgyz Republic and Tajikistan). It currently has an active budget support programme with Belarus, which includes IFI-style conditionality and regular programme reviews.

Key issues

For the Eurasian Economic Area to become credible and effective, three key issues remain to be resolved.

(i) Harmonization of export taxes

So far only import taxes have been nearly harmonized. Harmonization has not been complete as Kazakhstan, for example, still enjoys around 70 exceptions from the Common Tariff (including for cars for personal use and pharmaceuticals, down from 400 exemptions applied in 2010). Phasing these out may prove controversial.

Even more challenging is agreeing on a harmonized export tariff – a prerequisite for a meaningful common economic area. Russia’s taxation of natural resources is unique in that it heavily relies on export duties rather than corporate income taxes or production sharing agreements. Kazakhstan’s export duties are currently an order of magnitude lower. Belarus is a net importer of energy. Harmonization will likely require a move to some form of profit-based taxation in Russia, which in turn would necessitate strengthening tax administration and implementing legislation on transfer pricing, as well as move towards an alternative support scheme for the refining industry (currently benefiting from substantial differential between export taxes on crude and refined oil).

(ii) Credibility of legal framework and dispute resolution mechanism

The legal framework of the Customs Union and Eurasian Economic Area is complex and far from clear. It is based on a “spaghetti bowl” of various agreements, of which to date there are at least 76 (the Customs Code and 75 others). This approach is similar to the one underpinning NAFTA (North America Free Trade Agreement).

Legal framework is further based on a direct application approach, whereby decisions of the supranational bodies of the union become legally binding for member countries (generally 30 days after their publication) and prevail over any national norms that may be inconsistent. The Customs Union Commission has already passed about 850 acts, which should have legal force but often include cross-references to national law and rely on national interpretation.  All this creates a regime that may be confusing for businesses, in particular small and medium-sized enterprises.

It also raises a question whether the dispute resolution mechanism is credible. At the heart of dispute resolution is the Economic Court of the Eurasian Economic Community, a successor to the CIS Economic Court established in 1993. Unlike in the case of CIS economic court, the decisions of Eurasian Economic Courtare meant to be legally binding on member states, and private entities are entitled to file with the Court. However, its effectiveness and willingness of member states to abide by its decisions are yet to be tested. The track record of its predecessor is not very encouraging, as highlighted by Belarus’s unsuccessful attempts to sue Russia in 2010 for violation of various earlier treaties.

(iii) Asymmetry

While there are a number of regional economic unions dominated by a single member (Gulf Cooperation Council – Saudi Arabia, Mercosur – Brazil), the asymmetry of the Eurasian Economic Area is arguably unprecedented (Kazakhstan’s population and GDP are around one tenth of Russia’s; Belarus is smaller still). The countries are also less economically integrated than commonly perceived: Belarus and Kazakhstan account for under 7% of Russia’s exports and imports. Belarusian imports, over half of which comes fromRussia and Kazakhstan, are perhaps an exception.

This asymmetry adds to the fragility of the union and raises question about its survival once political succession occurs in one or more member states, given that the current leaders have been personally highly committed to the project.

Indeed, it is legally possible to leave the Eurasian Economic Community and the Customs Union, but only through block withdrawal from all treaties (i.e. it is not possible for member countries to selectively suspend application of certain provisions).

Long-term impact

Perhaps the greatest potential benefit of the Customs Union and Eurasian Economic Community could come from their becoming a credible external anchor for economic policies, liberalization of the services sector, and business environment reforms. The partial integration has already arguably imposed a degree of discipline on Belarus’s economic policies, as price controls and multiple exchange rates are hard to sustain with open borders. To reap these benefits the Common Economic Area will need strong institutions. Its longer-term success will ultimately depend on whether it will be able to create institutions stronger than any of its member states currently have—by no means an easy task. 

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For this exercise, one must look at both exchange rate and reserve movements. In some cases, external pressures have led to depreciations of the local currencies. In others, they have culminated in loss of foreign currency reserves by central banks.

To be able to compare the extent of external pressures on economies, we designed an index of exchange market pressure (EMP), which is a simple average of two indices: a Nominal Effective Exchange Rates (NEER) index and an International Reserves (IR) index.[1] Both NEER and IR indices are updated each month using a moving average for the previous 12 months as a reference period to ensure one-off or seasonal movements are eliminated.

When the EMP index is below 1, it indicates that either the exchange rate is depreciating or central bank reserves are falling, or both. Conversely, a value above 1 means exchange rate appreciation and/or reserve accumulation. Of course, in some cases this may also represent a drawdown of IMF resources by the central banks or other one-off inflows.[2]

The EMP shows that external pressures have increased since September 2011 in many of the Bank’s countries of operations. Thus, the indices for Hungary, Poland, Russia, Turkey, and Ukraine are now at about the levels where they were at the onset of the 2008-9 crisis, in the autumn of 2008 (see Figure 1). In the cases of Hungary and Turkey, the indices were below 1 for the first time since then. Most likely by now, this is also the case for the other three countries.

 Figure 1. Dynamics of EMP Index for selected countries of operation.

Note: EMP= 0.5(NEER) + 0.5(IR), where NEER and IR indices are derived based on 12-month moving averages of nominal effective exchange rate and international reserves, respectively. Low values of EMP indicate significant nominal depreciation and/or falling international reserves.

However, the pressures are not yet as severe as they were at the peak of the crisis in the spring of 2009 (see Figure 2).  At that time, external pressures have led to significant loss of reserves and devaluations in many countries, with indices falling to as low as 0.75-0.8.

A number of commodity rich countries (including Azerbaijan and Russia) lost significant shares of their external reserves. Some others (for example, Ukraine) suffered from large devaluations.At this stage, Belarus is the only country which has surpassed the intensity of exchange market pressures experienced in 2008-9.

Belarus is in the midst of a largely home-growth balance of payments crisis. Hungary has somewhat surprising trajectories in both crises.It seems to have had early onset but was able to handle the crisis early on in 2008 by tapping the EU and IMF resources.

This year’s experience is perhaps somewhat similar, but the increase of the index may reflect the depreciation of the US dollar vis-à-vis the euro and Swiss franc before the new wave of the global instability started in August 2011, as Hungary holds most if its reserves in these currencies while the EMP is based on reserves measured in US dollars.

Figure 2.Comparison of EMP indices in October 2011 with March 2009.

[1] The use of nominal effective exchange rates for all countries (including with currency boards and pegged exchange rates) ensures that exchange rates movements reflect pressures vis-à-vis exchange rates of the main trading partners.

Thus, a country pegging its currency to US dollar but trading primarily with the eurozone would experience effective appreciation pressure when US dollar appreciates vis-à-vis the euro that would offset some of the related reserve loss.

[2] The index does not capture the impact of possible capital controls, used by some countries in the latest crisis.

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Its general principles and objectives are agreed but, as particularly true for climate change agreements, the devil will be in the details on how the principle of common but differentiated responsibilities can be translated to binding commitments and country level actions. In the meantime the countries agreed on the rules for monitoring, reporting and verification of emissions covering all countries to build more trust and accountability so much needed in further talks.  In return for this roadmap, some developed countries, led by EU agreed to adopt new emission targets for the second commitment period under the Kyoto Protocol, i.e. for another 5 to 8 years beyond expiry date of the current commitments at the end of 2012.

This was a key demand by developing countries. It means that the current voluntary emission reduction pledges made by these countries in Copenhagen and Cancun will be anchored in international law as of 2013. However, except for the EU other major industrialised emitters, such as Japan, Russia and Canada do not intend to submit legally binding targets in the second commitment period, and instead would stick to their initial voluntary pledges. In fact Canada soon after Durban confirmed its previous announcements that it would withdraw from the Kyoto Protocol even in this commitment period. This means that countries responsible for 85% of emissions will not be legally bound to cut emissions until the next decade. Australia and New Zealand left a placeholder for consideration. This would leave the EU alone in the world with legally binding targets, followed only by a few European countries tied to EU and possibly three EBRD countries – Ukraine, Kazakhstan and Belarus.

A new climate funding vehicle – Green Climate Fund – has been established as a new legal entity under the Climate Convention
with the independent Secretariat, Board and Trustee. The institutional design and governance were fleshed out, but not the sources and volume of funding, or details of spending strategy. All developing countries are eligible recipients, although it remains unclear if it includes middle income economies from EBRD region, such as Ukraine, Turkey, Russia, Kazakhstan or Belarus. The Fund will have a private sector facility, whose details are yet to be determined.

Durban outcomes are modestly reassuring for the existing market mechanisms under the Kyoto Protocol, although detailed operational implications are yet to be clarified by the end of 2012. As the Kyoto Protocol is extended for another 5-8 years, the market mechanisms are expected also to have an additional lifetime. It was agreed that the Clean Development Mechanism (CDM) available to developing countries can now include Carbon Capture and Storage and some of its operational rules were amended to cut red tape and speed up approval procedure.

The major review and improvement of the CDM mechanism are due in 2012. Some of the operational conditions for the Joint Implementation (JI) mechanism* that is available to richer EBRD countries are less clear. The decision on the proposed new JI rules was postponed until the next summit in Quatar a year from now. Russia may loose eligibility to host JI projects if the country does not adopt legally binding emission caps. Trading of the Kyoto national allowances (AAUs) is expected to continue although rules governing carrying over surplus allowances from the first to the second commitment period under Kyoto Protocol are yet to be discussed.

A special working group will assess in the first months of 2012 the implications of carry-over of AAUs and recommend actions to address the implications on the aggregate emissions reductions from the developed countries.
New market and non-market mechanisms were agreed in principle but the decision on rules and modalities was delayed until next year. This includes crediting for the result-oriented nationally appropriate mitigation actions (NAMAs) and sectoral approaches for agriculture, and international aviation and shipping. The countries also agreed on the carbon markets and climate finance as possible funding sources for activities to reduce emissions from deforestation and forest degradation (REDD+) activities.

Several Cancun agreements were successfully implemented, in particular on technology transfer, adaptation, and improved transparency through better monitoring, reporting and verification of countries’ emissions reduction actions.
Overall, the Durban deal was an unexpected last minute compromise against low-set expectations. But it leaves no-one truly happy.

The fact that developing countries and the US have accepted to be subjected to legally binding commitments in the future represents a paradigm shift in climate negotiations. However, the tone of the talks and the number of issues and conditions flagged by parties show that the road to comprehensive global agreement by 2015 will certainly be very bumpy. It is also bitterly recognized in the Durban decision that currently agreed commitments and actions would bring the World dangerously close to the probability of increasing global temperature by 4 degree, double the 2 degree safety limit recommended by scientists.

Durban outcomes should strengthen the long term fundamentals for the market mechanisms and removes immediate risk of their major disruption in 2012. Carbon prices and origination of new projects will however continue to be affected by uncertainty because of unclear operational details in the second commitment period and fragile and fragmented sources of demand for emission reduction units, exacerbated by the ongoing economic crisis. This cloud of uncertainty could gradually clear in the course of the next year.

The amount of work scheduled for next year and the weight of decisions that should be made by the conference of parties in Quatar next year is profound and may exceed the capacity of the UN-led process. Next months and years will show how durable and effective is the emerging strange coalition of the committed (the EU and the European allies), the tempted (Ukraine, Kazakhstan and Belarus) and the desperate – the dozens of small least developed countries and small island states that are already hit hard by the climate change impacts. And a critical question remains whether the major polluters responsible for 85% of emissions will walk the road agreed in Durban or not.

* Project-based emission credit mechanism for countries that adopted emission targets under Kyoto.

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Yet, there is not much rigorous evidence on the borrower impact of both types of microcredit to either substantiate or challenge such a strategic shift. We present some such evidence from a randomised field experiment in Mongolia.

The ability of microcredit to combat poverty remains hotly debated. After years of rapid growth, various microfinance institutions (MFIs) are currently struggling with repayment problems and, in some cases, a political backlash.

Scepticism has been further fuelled by several randomised field experiments which show that the capacity of microcredit to lift people out of poverty might be smaller than previously thought. In a nutshell, the evidence suggests that microcredit may reduce liquidity constraints, help families cope with shocks, and encourage entrepreneurship. The ultimate impact on poverty indicators such as income and consumption nevertheless remains ambiguous. Impacts on health and education are difficult to substantiate too.

Learning about the impact of microcredit is also important because the microfinance industry itself is changing. A number of leading MFIs have moved from joint-liability lending, as pioneered by Grameen bank in the 1970s, to individual lending. Under joint liability, small groups of borrowers are responsible for the repayment of each other’s loans. Group members are treated as being in default when at least one of them does not repay and all members are denied subsequent loans. Group lending often involves committing to repayment meetings and can exploit social pressure, making it onerous for borrowers. This is a key reason why MFIs are moving from joint to individual lending.

Somewhat surprisingly, there exists very limited evidence on the relative merits of individual and group lending in terms of borrower impact. Armendáriz and Morduch (2005), p. 101-102) note that: “In a perfect world, empirical researchers would be able to directly compare situations under group-lending contracts with comparable situations under traditional banking contracts. (…). The best evidence would come from well-designed deliberate experiments in which loan contracts are varied but everything else is kept the same.” This blog post discusses such evidence (Attanasio, Augsburg, De Haas, Fitzsimons, and Harmgart, 2011).

The experiment

Mongolia is the most sparsely populated country in the world and this makes disbursing, monitoring, and collecting small loans very costly. The aim of our experiment, conducted in cooperation with Mongolia’s XacBank, was to analyze whether group lending can be an effective and efficient way to lend. Mongolian microcredit has traditionally been provided as individual loans, reflecting concerns that the nomadic lifestyle of indigenous Mongolians had impeded the build up of social capital.

Our experiment took place in 40 villages (Figure 1).

Overview of participating villages and provinces

XacBank was interested in expanding access to poor and female borrowers, an underserved market segment. A total of 1,148 women from the poorest parts of the population participated and a detailed face-to-face survey was administered to each of them during March-April 2008 (baseline survey, see first photo.

Participant being interviewed, photo taken by Britta Augsburg

We measured variables that reflect households’ living standards and that could in principle be affected by the intervention during a 1.5 year interval: income, consumption, and savings; entrepreneurial activity and labour supply; asset ownership and debt; and informal transfers.

After the baseline survey, we randomised at the village level: women in 15 villages received access to individual loans, to group loans in another 15 villages, while in 10 control villages XacBank did not lend to the women during the experiment. The randomisation removed selection bias, allowing us to attribute post-treatment differences in outcomes to the two lending programs.

The ‘treatment period’ during which XacBank disbursed loans lasted 1.5 years – from April 2008 to September 2009 – with some variation across villages. During this period, 57 (50) per cent of the respondents in the group (individual) lending villages borrowed from XacBank. The probability of receiving a microloan during the experiment was 24 percentage points higher in treatment than in control villages.

In October-November 2009 we conducted a follow-up survey to measure the poverty status and economic activity of all women again. We use the data of both survey rounds to measure the impact of the programs on poverty by comparing all women who initially signed up in treatment villages, irrespective of whether they borrowed or not, with those who signed up in control villages.

Group lending versus individual lending: similarities…

Although XacBank’s loans were intended to finance business creation, about half of all credit was used for household rather than business purposes in both the group- and individual-lending villages. For instance, we find that at the end of the experiment the probability of owning a VCR or radio was 17 and 14 per cent higher in the group- and individual-lending villages, respectively (compared to control villages). For large household appliances the corresponding figures are 9 and 7 per cent.

A second finding that holds for both treatment programs is that women with lower education seem to benefit more. We take education as a proxy for long-term poverty, more reliable than a wealth indicator as it is easier to measure and more stable over time. The results suggest that it is the poorer part of the targeted population that benefits most from microcredit, regardless of how it is delivered.

Third, we find no differences in repayment behaviour between both lending programs. Giné and Karlan (2010) also compare repayment rates between group and individual lending – both with mandatory weekly repayment meetings – and find no significant differences. In our case neither loan programme included mandatory repayment meetings.

… and differences

We also find important differences between the impact of group and individual loans, to suggest that the former were more effective. For group loans we find a positive impact on female entrepreneurship, one of the main intermediate objectives of the programs. This is largely driven by less-educated women who at the end of the experiment had a 29 per cent higher chance of operating a business compared to similar women in control villages. This difference is 10 per cent for highly educated women. Enterprise profits increase over time as well.

Did increased entrepreneurial activity feed through to improved household well-being? To answer this question we use detailed information on household consumption elicited in the surveys. We find a significant and robust increase, relative to control villages, in food consumption in group-lending villages.  Access to group loans led to more and healthier food consumption, in particular of fresh items such as fruit, vegetables and dairy products.

Total food consumption was 17 percentage points higher. Over time we also see an increase in the use of combustibles and felt for the isolation of gers – traditional Mongolian felt tents (Photo 2) – as well as other non-durable and total consumption.

Two group-borrowers in front of one of their gers, in Ikhtamir village in Arhangay province, photo by Ralph De Haas

Our findings for individual lending suggest that this form of lending was simply not as effective. We find no impact on female entrepreneurship or on consumption, not even with increased exposure to credit. We do find, however, that over time there is an increase in the probability that women operate a business jointly with their spouse – and that these joint enterprises gradually also become more profitable. Nevertheless, it is not clear whether these longer-term effects translate in the same way into higher consumption as they do for group borrowers. We find no evidence that food consumption goes up with exposure in individual-lending villages.

There is at this stage no evidence of changes in income as a result of either of the programs, though it may simply be too early to observe such effects. The more sustained and more generalised increase in consumption in group-lending villages seems to indicate that these loans are more effective at increasing permanent income. Why?

One possibility is that joint-liability ensures better discipline. Group discipline may not only prevent the selection of overly risky investment projects, it may also ensure that a substantial part of the loans is actually invested in the first place. We document results on informal transfers that seem to support this hypothesis: women in group-lending villages decrease their transfer activities with families and friends, the opposite to what we find in individual-lending villages. This could reflect that groups replace some of their informal financial networks but further analysis is needed to explore this.

Our weaker results for individual loans may also reflect that borrowing at baseline (i.e. pre-program) was somewhat higher in individual compared to group-lending villages. Moreover, since group-lending was an innovation in Mongolia, the unmet demand for this product – and its marginal impact – may have been larger. Loan take-up was indeed higher in group-lending villages. This could indicate that some women, in particular the less-educated, had not been comfortable with borrowing alone but were willing to borrow as part of a group. This would imply that group and individual lending are complementary services for which the demand differs across borrower types. The process of liability individualisation by MFIs may therefore run the risk that certain borrowers, those who are not able or willing to borrow on their own, may gradually lose access to finance. It is too early to write off group lending just yet.

B. Armendáriz and J. Morduch (2005), The Economics of Microfinance, MIT Press, Cambridge.

O. Attanasio, B. Augsburg, R. De Haas, E. Fitzsimons, and H. Harmgart (2011), Group lending or individual lending? Evidence from a randomised field experiment in Mongolia, EBRD Working Paper No. 136, London.

X. Giné and D. Karlan (2010), Group versus individual liability: Long-term evidence from Philippine microcredit lending groups, mimeo.

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The category of the competition sponsored by the Bank was entitled “The impact of water”, a theme with clear resonance to many of our projects.

The first film is by Saveis Joze Sadeghian, who is based in Tunisia and worked with fellow countryman Ines Chalalaaan. Sadeghian is an Environmental Economist currently working as Climate Change Finance Advisor for the Global Mechanism of the United Nations Convention to Combat Desertification (UNCCD), and is also an actress with a diploma in cinematography.

Here’s her film, “Drops of Hope”.

The other finalist in our category was Peter Vadocz, who succinctly summarises his interest in the potential impact of topical short films like this one; “if you feel that your thoughts can affect more and more people, it’s a kind of happiness.”

His film is entitled “Clear Water.”

The category supported by the EBRD was The Impact of Water.

The availability of safe and reliable water and wastewater treatment are vital for the health and quality of life of people everywhere. Since the Bank was established 20 years ago we have invested in numerous water projects and this is expected to become even more of a priority area as we start to work in the countries of the Southern and Eastern Mediterranean. Many of these countries are among the most water-stressed in the world, a situation that will become even more uncertain as a result of climate change.
Biomovies has inspired amateur film makers from across the globe to use their imagination and creativity to highlight these issues. This year it attracted entries from 39 different countries.

As well as Water, the competition focuses on Energy, Forests, Oceans and Living With Nature. The final 10 films will be shown at the UN Climate Change Conference in Durban, South Africa and the overall winner will be the film that receive the most views, and will be announced at the start of February 2012. Visit the Biomovies Youtube page to see the finalists and help pick the winner.

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Ancient Chinese philosopher Lao Tse might have been writing of the plight of many of today’s commuters. I know this, for public transportation is the bane of my existence. Hailing from Los Angeles, a city nearly without it, and now living in London with 4,000 trips on the Waterloo & City line to my name, I have become an acute (albeit amateur) and opinionated observer of the travails that face the modern-day commuter.

So it was with more than mere curiosity that I joined a group of transport specialists and decision-makers from our countries of operations in Taipei, capital of Taiwan, for a technical visit hosted by the government. The trip revolved around urban transport systems – from the underground, buses, trains and cars that carry millions of people daily, to the lone cyclist and oft-overlooked pedestrian.

Taipei’s transport impresses from the moment of arrival: efficient, clean and well-organised, it is the effortlessness of the journey that impresses the visitor.

A tale of three cities
Almaty, Bishkek and Chisinau are important EBRD clients in the urban transport sector – and so it made good sense that transport specialists from these cities were invited to Taiwan to learn more about Taipei’s integrated approach to metro, bus and automobile traffic.
With a number of public transport projects approved and more on the way, the Bank has an established relationship with these cities and can point to projects in various stages of preparation and implementation. In Almaty, this includes the purchase of 200 new buses fuelled by natural gas as well as the possible construction of the first light rail train (LRT).

In Chisinau, the municipal trolleybus company has purchased some 100 new trolleybuses and approached the Bank with a request to help transform its road sector. In Bishkek, meanwhile, the Bank’s support will enable the city to acquire 80 new trolleybuses and upgrade network infrastructure.
There was thus much for our group of specialists to discuss and to view. They found out that the backbone of the public transit system in Taipei is its expanding, impressive metro system. It consists of nine intersecting lines with a length of 102 kilometres and carries 1.5 million daily riders. It boasts ultramodern rolling stock and connects seamlessly with trains and a state-of-the-art inter-city bus station, where meticulous organisation enables some 3,000 bus trips daily from 48 platforms. (Here, permit me a brief digression back to the US, where bus stations are usually in a sorry state. The contrast with Taipei could not be greater: intense competition among 10 competing bus companies means low prices and luxuriously-appointed buses.)

The EasyCard
Coordination and organisation are the watchwords of Taipei’s remarkably integrated and well-functioning system. Yet what elicited heightened interest from our experts from Almaty, Bishkek and Chisinau was the country’s expertise in intelligent transport systems. And here the focus was on a single credit-card sized product known as the EasyCard – known more generally as “e-ticketing”.

Though similar to London’s Oyster Card and other smart card systems, the EasyCard has many more uses and covers other means of transport. Beyond the metro and city buses, the card can be used for conventional and high speed trains, riverboats, taxis and bicycle rental – not to mention an array of other services. It can also be used as a debit card at retail outlets including the ubiquitous 7-Eleven stores – and can be linked to a bank account with an automatic top-up capability.

And it can be used to pay for parking, something which also impressed our transport specialists from the region. I never thought that I would sing the praises of parking structures, but a site visit to an underground parking facility as well as to one of 24 automated parking towers managed by the Municipal Parking Authority was fascinating. In the towers, license plate recognition (automatic payment!) and a lift which automatically parks and retrieves your car (thus ensuring rapid access to the nearby tube station) means safe, effortless parking.

The Green Energy Special Fund
Our group of transport specialists also had an opportunity to learn more about the EBRD – and about Taiwan’s activities at the Bank, especially in the area of the environment. After all, the country’s commitment to efficient public transportation is inherently a commitment to environmental protection. And environmental issues are extremely important for Taiwan. As Wen-Lung Tao, Secretary General of the ICDF, Taiwan’s international development fund, puts it: “Our priorities include the development of clean energy, energy efficiency and environmental protection.”
This commitment stands behind the US $80 million contribution made by the ICDF to the Bank to establish the Green Energy Special Fund (GESF), which aims to help Bank clients overcome the “affordability gap” in choosing highly efficient technologies which may be more expensive.
As Jean-Patrick Marquet, EBRD Director for Municipal and Environmental Infrastructure (MEI), notes, “The Fund helps to make the best available technology affordable – meaning that clients can make the leap from yesterday’s to tomorrow’s technology.” There are indeed a number of areas in MEI which could be supported by the Fund, including energy efficient LED street lighting, as well as electric or hybrid bus fleets – all of them of interest to current and potential clients in the EBRD region.

A two-way street
After four days of discussion and site visits, what made the strongest impression on the transport specialists from the EBRD region? Vladimir Merenkov, Head of Public Transport for the City of Almaty, put it succinctly: “Четкость, аккуратность, техническая организация. (Precision, efficiency, technical organisation.)” And the EasyCard, he added.
This was a sentiment echoed by Kanybek Aidarov, responsible for the trolleybus network in the Kyrgyz capital, who was equally impressed by the electronic payment systems, as well as the high level of concern for public safety. Oleg Cernei, Chisinau city council member, was intrigued by the legislative basis and structure of public-private partnerships in developing transport services across Taipei. As for the EasyCard, Adrian Boldurescu, the young head of the Chisinau Transport Department, felt that the Moldovan capital was not quite ready: “Our people are used to cash payment. And even though electronic payment would help to fight corruption, we don’t yet have the mentality to make the switch. But give us few years time…”

All in all, our group of specialists came away with a solid understanding of how Taipei’s urban transport functions, as well as an appreciation of – and interest in – Taiwanese expertise in transport planning, organisation and technology. Yet there was another dimension to the experience that was appreciated and will not be forgotten: the warmth and hospitality of our many hosts. I have no doubt that a number of municipal transport departments in the region have now been enriched with a more solid appreciation of amazing Chinese and Taiwanese food.
Taking the transport metaphor one final step, one could describe the results of the visit as a two-way street. For there will no doubt be an exchange of views and experience between all three cities – as well as between the cities and the technical experts from Taiwan. When all is said and done, a successful technical visit is about the connections, professional and personal, that are forged. And in this sense the visit was most definitely a success.

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Of all the EBRD’s sub-regions, south-eastern Europe (SEE) has been the slowest to emerge from the crisis. One reason behind the sluggish recovery is undoubtedly a general lack of confidence throughout the economy. This note looks at the latest consumer confidence indicators for selected SEE countries.

These data are useful because they are often more up-to-date than other economic variables and can help to predict short-term trends. The results show that, not only are confidence levels well below the EU average, but they are also steady or falling in recent months.

Given the close historical link between these indicators and subsequent economic performance, they provide another reason why the short-term outlook for the region remains bleak.

Read the full article from ebrd.com

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