The war in Ukraine is a “megacrisis” that demands better coordination among multilateral development banks, according to European Investment Bank President Werner Hoyer.
Russia’s invasion of the country and its broader implications are comparable to the fall of the Berlin Wall or 9/11 in terms of global impact, Hoyer told Devex in Washington on Friday.
This is a challenge that the “community of nations does not have easy instruments for,” he said.
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Many international organizations are in a “sort of freeze” because of the war, which poses difficulties, he said. ”It is painful to be unable to agree even on simple communiqués,” as was evidenced last week when the G-20 group of nations, International Monetary Fund, and the joint Development Committee of IMF and the World Bank failed to release their customary communiqués, Hoyer said.
EIB pulled its foreign and local staffers out of Ukraine, and some projects — including a school — have been damaged or destroyed during attacks, he said. While the bank expects some losses — it has about 60 investments in Ukraine, ranging from transportation to education — they should be limited in scope, said Hoyer, who sported a Ukraine ribbon on his lapel.
EIB increased its investment in Ukraine following the Russian occupation of Crimea in 2014 and knows the country well, he said. Ukraine hasn’t always “been an easy partner,” but “what we are seeing now is a breathtaking development of Ukraine” with focused leaders who are “doing a fantastic job.”
While the war and expected losses worry its board, bank officials must make the case that they know what they’re doing and it’s important to take risks to meet the needs of the moment, Hoyer said.
The war has been “a derailing factor” and was unexpected when EIB Global — the bank’s new development branch — was launched, but it has “very much reinforced the strategic objectives we had in the first place,” Markus Berndt, deputy director general and acting head of EIB Global, told Devex.
Many of EIB’s partners — countries and companies alike — clearly lack the resilience to deal with the current crises, including food security, and the conflict has also highlighted the importance of energy independence, he said.
COVID-19 and Ukraine are “overshadowing everything,” and “in some circles people don’t talk about the SDGs anymore or the Paris objectives,” Hoyer said, referring to the Sustainable Development Goals and Paris climate accord. “We have the responsibility to remind everybody of the commitments.”
Hoyer took that message to a Saturday meeting of a group of multilateral development bank heads, which he chairs this year, and asked United Nations Secretary-General António Guterres to put pressure on the MDBs to make sure that SDGs aren’t relegated to the “back burner.”
“What I urgently require, plead for, is more and better coordination of the MDBs because we have such a series of huge challenges ahead of us that it is not enough to work next to one another. We need to work together and do some division of labor,” Hoyer said.