Launch of EBRD Transition Report 2017-18 “Sustaining Growth”
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22/11/2017
When: Wednesday, November 22, 2017
4:00 PM
Where: Headquarters
One Exchange square
London EC2A 2JN

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The event will be hosted by Professor Sergei Guriev, EBRD’s Chief Economist.

The panellists are Professor Lord Stern and Professor Keyu Jin from London School of Economics, and Bernard Haider (Partner PwC).

 

The event will start at 16:00 and be followed by a reception from 17:30 to 18:30. Please arrive 15 minutes before the start time to clear security. A piece of identification with photograph will be needed to gain entry.

The Transition Report 2017‐18 focuses on the challenge of sustaining growth in middle‐income economies. The analysis builds on country‐level, industry‐level and firm‐level datasets as well as unique data on road infrastructure upgrades and the performance of EBRD‐supported infrastructure and energy projects. The Report also provides an overview of progress with structural reforms and introduces a new assessment of countries’ progress in their transition towards sustainable market economies.


The Report finds that middle‐income economies, on average, tend to experience a slowdown in productivity growth at income levels between one third and two thirds of that of the US. Furthermore, growth in many economies in the EBRD region is lagging behind even that of comparable middle‐income countries. Having exhausted the advantages that underpinned their strong growth performance in the past, the EBRD economies now require a new growth model. This model has to be based on innovation, going beyond the importing of foreign technologies.


The Report’s analysis also shows that the recent slowdown in productivity growth partly reflects that the EBRD region is home to many small and stagnant firms that are relatively inefficient. Increasing import competition, providing export market access and integration into global value chains can stimulate such firms to raise their efficiency. They can do so through innovation and investment in a more modern capital stock.


The Report’s estimates show that infrastructure investments account for about 40% of capital needs. Over the next 5 years, the region needs to invest approximately €1.9 trillion in infrastructure in order to support its growth. Evidence from major upgrades to Turkey’s road network demonstrates how improved market access can generate new trade links and expand the variety of products that are available to consumers. The resulting gains in employment can also reduce emigration from previously isolated regions. Transport infrastructure can therefore not only contribute to competitiveness and the integration of markets but also to opening up opportunities for income growth in economically disadvantaged locations.


Despite significant progress since the 1990s, emissions of greenhouse gases across the region are still substantially above those of comparable emerging markets, raising concerns about the long‐term sustainability of economic growth across the EBRD region. Stricter policies, starting with eliminating energy subsidies, are needed to meet the Paris Agreement commitments.

 

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