Ambassador of SDG 1: No Poverty

EBRD Regional Director for the Caucasus, Catarina Bjorlin Hansen

How can different organizations and sectors work to eradicate poverty throughout the world? 

Eradicating poverty is the paramount goal for everyone working in development, and it is particularly important for the European Bank for Reconstruction and Development (EBRD). From a global perspective, it is very important to ensure the balanced economic growth of countries – their development will not be sustainable if there are pockets of poverty throughout society. Therefore, one way to tackle SDG 1 is through economic development. The EBRD has this very approach, ensuring that growth is inclusive and leaves no one behind. This is at the core of our strategies for countries where we work, including Georgia.

Since we started here 30 years ago, we have invested almost €5 billion in 286 projects in the financial, corporate, infrastructure and energy sectors, among others. On average, we have been investing up to €150 million per year. This is quite a substantial amount for a small country or economy like Georgia. Moreover, if you look at per capita investment, Georgia ranks first among countries where we work across the EBRD regions.

Our investment in Georgia has a positive social impact as we try to focus on projects that drive and enable growth, such as financing small and medium-sized enterprises (SMEs), infrastructure projects, energy production, renewables, sustainable solutions for green cities, and so forth. These projects will, in turn, facilitate sustainable economic growth, which, in the long term, is set to reduce poverty. Moreover, we also facilitate projects in different regions of the country, including smaller cities, towns and perhaps even villages. We have an outreach program for SMEs where we help them build capacity and integrate further into national, regional and global economies.

Our organization, UN Global Compact Network, Georgia, works with the business sector to promote responsible business conduct in the companies in Georgia. How do you work to promote corporate sustainability? Because I know that EBRD is promoting responsible business conduct and compliance in general with the business sector. How important is it for companies to be involved in the implementation of SDG 1: Ending Poverty, and how do you encourage them to do that?

We encourage all the companies we work with to implement good corporate governance. It is key for a company’s long-term survival, growth, and prosperity. A thriving private sector, in turn, is key to reducing poverty. This is at the core of our mission and values.

We help Georgian companies through a program called Advice for Small Businesses (ASB), where we work with businesses all over the country and provide them with support to improve their business skills, governance, standards, and so forth. Our joint efforts also make these companies more resilient to all the pressing challenges that are evolving around us. Many of the companies we work with have reported increasing their sales and exports and, rather importantly, hiring many new people.

Multi-sectoral partnerships are very important for the implementation of sustainable development goals. One of the goals, the 17th goal, is promoting partnerships because other goals cannot be achieved by one sector solely. How do you work with other stakeholders to eliminate poverty and contribute to the elimination of poverty in Georgia? And what is the importance of collaboration between the sectors?

We implement infrastructure projects in partnership with the government. These projects contribute to the Sustainable Development Goals in several ways. First, they create job opportunities for a broad spectrum of the local population as they are quite labour-intensive. This is very beneficial for the economic development of small towns and remote regions in any country.

Second, we are improving access to finance for small and medium-sized enterprises (SMEs) and larger corporates in the region by working together with local financial institutions. We work closely with commercial banks in Georgia and provide them with SME credit lines that they can, in turn, lend to their clients across the country. Local banks have a wide network of branches in every town, while we are based only in Tbilisi. Therefore, it is easier for a local company in a smaller town to access finance through their local bank.

Along with these credit lines, we also offer consultancy services to SMEs on various topics such as energy efficiency, financial sustainability, and crisis management. The latter was particularly popular during the Covid-19 pandemic when we offered online outreach seminars to our clients. These services are in high demand and help businesses survive, thrive and prosper, which is essential for reducing and eventually eradicating poverty.

What is the role of international financial institutions in promoting a healthy investment climate in Georgia and other countries? And how do they promote sustainable development in the country?

First, I need to say that we are not here to compete with local banks. We complement their work and enhance their business too. We often provide finance jointly with local banks and other International Financial Institutions (IFIs). This is particularly beneficial for Georgia’s economy as IFIs sometimes tackle projects that seem less bankable from a commercial perspective.

Considering this, it is fair to say that our social impact is powerful, and our work overall has a stronger developmental aspect to it. Yes, we want the project to be sound from a financial point of view, but the wider impact on society is paramount to our project planning and execution.

This is often even more visible in sovereign projects that we do with the state, such as building roads, improving solid waste management, helping reduce energy consumption, and so forth. These kinds of investments are usually less lucrative for the private sector as they are not as profitable. Nonetheless, these are fundamental to economic development in any country, and that is why the work of IFIs is so positive and important.

Much like our advisory component to private sector investments mentioned earlier, we also support the reform process. In addition to financing, we provide technical assistance for projects as well as for relevant sectors. 

One interesting example is our current work in Georgia’s medical sector: the Georgian healthcare sector needs more nurses and has a problem with the retention of its trained medical workers. Together with our partners and clients, we also identified the need for an updated nursing curriculum. To solve this problem, with help from the Korean government, EBRD is helping one of its clients in developing a new internally certified training programme aligned with international standards. At the same time, we are helping the Ministry of Health introduce professional standards for medical workers, create well-paid jobs, and attract more male nurses to the sector.

Tackling sectoral-level problems in this way is something that we do on a regular basis. Such technical cooperation, combined with policy engagement and, of course, our investments, constitute our trademark business model through which we are already delivering real change in Georgia. I hope this brings us closer to our eventual goal of helping eradicate poverty.