For two years the Eurasian development Bank (EDB) has increased its project portfolio more than 70%, launched a direct conversion of the national currencies and created a clearing and settlement system, and its members may be two new countries — Hungary and Moldova. EDB head Andrei Belyaninov in his interview to “Kommersant”, talks about what makes a Bank for the development and integration of their countries.— In parallel with the plan of post-crisis recovery in 2020-2021 years, the government expected the audit functions of development institutions and their systems. That, as you suggest, in this context, waiting EDB?— About us, in General, not so much I guess — sorry. Sometimes causes even some shame that basically all comes at the expense of our initiatives.I believe that in terms of the development institutions and the EDB need to engage more with Russian export center because it allows for effective promotion of Russian non-oil exports to the markets of member countries of the Bank. It is also necessary to strengthen cooperation with similar Bank structures of the participating countries such as Kazakhstan development Bank, development Bank of the Republic of Belarus. We have them and so very thick and high-quality interaction, many joint projects. But probably after all the current troubles and hassles related to the pandemic, to them, apparently, is to make a separate program.— In General, this topic is constantly discussed in all political institutions — what do you think, why is such a political interest in the practical interest less?— We see that calculations in national currencies pays attention to mostly the top management of countries, but much less of the government and national banks. They could easily enhance this work. A lot of talk around this, and time is running out, wasted, and of little help. We all became hostages to the dollar dominant, but why? If you look at the structure of international payments — it’s easy to see that we continue to sign contracts in dollars, then calculated through the American stock exchange and the banks give dollars, and it still is then exchanged for a Belarusian ruble, Kazakh tenge Armenian drama. Why we do this why we continue to pile up the dollar on a pedestal?We have every day are these transactions, and it works.Finally, I think that it would be healthy if in the vaults of our Bank and now we have no storage facilities would appear “live”, metallic gold. If we estimate that we are mining company, would take not only the currency but gold, we would have provided added strength. The possibilities are there, and despite all commodity trends, gold is gold, it of itself will remind. The same, incidentally, applies to PAlady. It’s not like the agenda of the development Bank. But in General, it is difficult to say that a development Bank should remain within the boundaries of the “integration projects” because — what is the integration project? We’d better to support only the release of matches, popular in the territory of the EEU— or spaceships, too?— From your point of view, the EEU after seeing coronavirus, the recession will be more or less relevant topic in countries-participants?— I don’t as often as I would like, in communication with Mikhail Myasnikovich, who now heads the EEC, but, as far as I know, he’s got the most serious intentions to give after current events the more definite and more strict shape of the Eurasian Commission and to continue its expansion. In my opinion, we need to create Scientific and technical Council of the EAEC, which could help the development of the various breakthrough technologies that now would be very appropriate. It will take a coronavirus, comes something else- everything that is happening around pandemic now shows that now the whole planet just looked at the long-standing problem through the eyes of others. We in the EEU is not integrated Academy of Sciences. Our economies are not so many really integrated areas whose activities would be governed by the Eurasian economic Commission.— Pretty unusual that you, as a banker, interested in integration in science — why? Besides the fact that I run the EDB, I also lead the Assembly of peoples of Eurasia in the fourth year. Education and the future path of integration, we need to think about this. People want diplomacy. People in our countries are tired of lies, tired of fear, tired of the fear, which we all threaten. We in the Assembly was even born the phrase “When people hold hands, they cannot take up arms”. Our integration is still about that. From your point of view, how will the outcomes of the crisis foreign trade policy of China, which before the pandemic was fully based on the project “Belt and road”? — I need to revisit the role of banker. In my opinion, not much will change. The global project “One belt and one road” will be implemented, we are talking about global trade communications with new products. By the way, now we saw how in the framework of the already created infrastructure well-behaving flows and the calculations — stability of this system requires a re-evaluation is important. For the EDB it is important that in recent months, Chinese banking institutions have become to us regarding, like, a few more liberal. For example, we are now entering with Chinese institutions the first deal with the so-called panda bonds — for us this will be the debut. The deal is almost ready. Don’t want to be sueverNYM, but I think the attitude of Chinese banks to Russia is really changing lately. We expect that this process will benefit all.— One of the reported government plan for post-crisis economic recovery is the growth of investments in infrastructure. In EDB I see this plan for yourself?— We have a very strong existing portfolio of infrastructure investments, and now became even more applications for funding from all six countries with which we work. We have no shortage of loan projects. From last few days our largest shareholder, Russia, have agreed on the BAKAD project is a ring road around Almaty, we will work together with the European Bank for reconstruction and development. Now we are strengthening our positions in the project “Western high-speed diameter” in St.-Petersburg. There is an increasing number of jobs, there comes what is called, “adult”, serious money — hundreds of millions of dollars. Completed the project “Saryarka” — the pipeline, which is already came to the Nur-Sultan, we are funding under the scheme “50:50” development Bank of Kazakhstan.We work professionally, we have a good team. We are not afraid of big projects, but now we are facing the limit — the limit per borrower now stands at $420-430 million, is for infrastructure projects just a little. Need to build tunnels, roads, bridges — and it is other money. Yes, we learned to sintezirovany, including with other development institutions with the participation of Russian shareholders. But, generally, development banks are supposed to be big and strong.— Eurasian development Bank is probably the only organization that economically and not administratively holds the EEU, in the case of the Bank and Tajikistan. What role Russia can you see here?— Role, of course, key, but, unfortunately, in Russia, many do not understand or want to understand. I want to say that interest in the Eurasian integration among top management and among ordinary people and in the media — in the same Kazakhstan, Kyrgyzstan, much like the above.Of course, this idea can be interpreted so that, say, Russia, they don’t need it, they want something from us. But it’s not. The same Kazakhstan very well passes this crisis. For the year we under the baseline scenario the projected drop in GDP of the Republic by 1.5% and increase of 5.9% in the next, while in Russia — a minus of 3,4% this year with growth of 3.1% in 2021-m. it is Impossible to exclude that next year the income per capita in Kazakhstan will exceed Russian indicators.So we, and I, leading international financial institution are a citizen of Russia, we don’t pay enough attention to the Eurasian integration. Here you can talk and the example of the EDB, when the national Bank of Kazakhstan has provided us with a line of 200 billion tenge to nearly half a billion dollars, and a similar agreement with the Central Bank of Russia to conclude not can. Therefore, in Russian rubles Ponderosa on the market, the level of commercial banks. Although the Russian ruble is very interesting for our customers in other countries: they are buying Russian machinery, equipment, and technologies that work there, and that is integration.The Russian ruble is a good integrator. Over the past four years, the share of projects that EDB is funding both in roubles and in tenge increased two times — up to 56%. Due to this demand we have created a clearing and settlement system in national currencies. This tool has no development Bank. From 2019, EDB has embarked on a new stage of its development and implemented the concept of a “Bank for banks” in which we advocate a kind of “hub” for commercial banks and provide the opportunity for local banks to be faster and cheaper to transfer money to clients in other countries in national currencies. Now this tool is already used 54 banks from all participating countries.— Funding in rubles is made at the exchange, in competition with Russian commercial banks. Probably, the same competition for projects. And compete with other multilateral development institutions?— In our countries of work, in addition to EDB, the multilateral development banks. By the end of 2019 these seven banks in total financed projects $1.4 billion in One of the Eurasian development Bank has invested in their economies $1.34 billion In Russia we funded projects is much more than all other multilateral institutions. There is something to ponder, isn’t it?I want to remind you that the authorized capital of our Bank is at $7 billion, of which paid only $1.5 billion in 2006, for 14 years, the Bank has financed projects for $9.2 billion, including nearly $4 billion over the past two and a half years, with the current team.What concerns the competition with Russian banks, as was properly noticed, special privileges in the Russian market have no EDB. On the contrary, Russian banks are in a better position to participate in the state programs of preferential lending with subsidized interest rates, often have access to favorable conditions to funding, to periodically undergo a recapitalization by the state. Therefore, Russian banks EDB not competing but working together on a number of complex and expensive projects, such as, for example, CRR-4.— Over 40% of EDB’s projects the last two years. The Bank has grown?— S&P Global Ratings in March affirmed the long-term and short-term credit ratings of the Eurasian development Bank at BBB/A-2 and the rating Outlook revised from “stable” to “negative.” You know, what was the cause of deterioration in the forecast? The rapid growth of the portfolio: 47% in 2018, and to 26% in 2019. I Have, of course, raises the question of a different order: is the approach of international rating Agency disguised form of preventing Eurasian economic integration? But the fact remains: the current investment portfolio increased last year by 25.6% to $4.3 billion Balance sheet portfolio increased by 31% to $2.8 billion. Countries with the largest shares in the portfolio we are traditionally Russia — 45.7% and Kazakhstan — 40.1 per cent. The greatest proportion of projects in the energy sector 21.1 per cent, and transport was 18.9%, financial sector — by 18.7%.— The theme of the year of the pandemic. You said that Kazakhstan is doing well this period. And other countries? It affects everything in the Bank? You also mentioned the rating agencies. Seriously if they revised the assessment of the EDB?— The rating agencies evaluate us well. Moody’s, Fitch, Standard&Poor’s — one or two notches above the sovereign ratings of Russia and Kazakhstan. When the story of this pandemic, we proactively addressed to governments with a request to report on priority projects in the current environment require to be put off concessional financing. You know, what was the only country that gave the answer? Belarus.We have developed a Program of anti-crisis assistance to our States. We believe that the fall of Armenia’s GDP will grow by 2.2%, Belarus — 3,7%, of Kazakhstan, as I said, a 1.5%, Kyrgyzstan — 0,3%, Russia 3.4 percent. In Tajikistan, the expected growth of 4.4%.As you can see, the situation is quite different. And the economies. Therefore, the support measures are different: revision of payment schedules on loans, as the EDB has already done for the Russian-Kyrgyz development Fund, and a moratorium on interest payments, and the provision of short-term capital. On all projects exposed to currency risks, we are considering the possibility of providing financing in local currency.Now there was a question with the quality of services in the health sector. Therefore, the EDB would like to open in the countries targeted credit lines, using the PPP mechanism for the construction and modernization of medical institutions.As I said, we are actively working on the possibility of subsidization of our interest rates through government programs. Now the EDB administers the work of the Eurasian Fund for stabilization and development. It administers, manages is not his money. So is the idea to subsidise the interest rate of the Bank for the account of the Fund.Implementation of measures will require additional liquidity. We therefore refer to countries ‘ Central banks with the request to equate the state securities promising target of��of legacy denominated in national currencies.There are measures that are not included in this assistance program, but also aims to combat coronavirus. For example, in conjunction with the Russian export EDB centre is preparing for concessional lending supply products manufactured in Russia, sought to combat COVID-19.— On the one hand, EDB — Institute of development, integration tool, on the other hand, he is more than the EAEC, and not always meet support from the States?— More than the EAEC, Yes. Especially for the first time in many years we go to two new countries: Moldova and Hungary. Hungary in the understanding of the layman generally do not associate with the Eurasian integration. Although the membership of this state opens up completely new opportunities. Development banks such as ours, should increase the number of its members.Two and a half years ago, I recall, about EDB, few people know. Now in its place I feel hot: we conducted a number of initiatives, send feedback. And, apparently, not everybody likes it. But I am sure that all of our initiatives will be productive — they are correct.Besides, I somehow inadvertently in one speech said that we have learned from the Eurasian development Bank, the prototype of the Central Bank of the EEU. However, not added that the Central Bank without the right issue, which was criticized by colleagues. But those are uncommon for a simple multilateral institution for development tools that we have to have, talking about the work of the Bank to ensure the integration of our countries.So I remain unconvinced. Eurasian development Bank became the prototype of the Central Bank of the EEU.He was born July 14, 1957 in Moscow. In 1978 graduated from the Moscow Institute of national economy (MINKH) Plekhanov, in 1994, the Academy of national economy under the government of the Russian Federation.Since 1978 worked in the First chief Directorate of the KGB. In the second half of 1980-ies was an employee of the USSR Embassy in the GDR. In 1991 he retired from the KGB. From July 1992 to September 1994, Deputy Chairman of the Board of REA-Bank in Russian Academy of Economics (former Plekhanov MINH). September 1994 — Deputy, and since September 1995, Chairman of the Board of Novikombank, established by the Association of the veterans of foreign intelligence. Since December 1999 — Deputy General Director of Promexport. 4 November 2000 was appointed General Director of FSUE “Rosoboronexport”. April 8, 2004 became a Director of the Federal service for defence order. In may 2006, the head of the Federal customs service. From 29 may 2017 Secretary General of the Assembly of peoples of Eurasia. December 1, 2017 — Chairman of the Board of the Eurasian development Bank.Doctor of economic Sciences, doctor of political Sciences, honored ecothe mist of Russia.EDB is a regional development Bank established by Russia and Kazakhstan in 2006. In 2009, the EDB joined by Armenia and Tajikistan, in 2010 Belarus, in 2011 — Kyrgyzstan. The Bank has the status of an international financial institution, its activities are regulated by international law. The Bank aims to promote the development of market economies of member States of the Bank, their economic growth and expansion mutual trading-economic relations through investment. Authorized capital of the Bank $7 billion investment portfolio on June 1, 2020 — $4.3 billion (including completed projects — $9.2 billion). Of the 91 funded project, 19.7% are in the transport sector, 19,1% in the energy sector, 16,7% in the financial sector, 13.2 per cent in the chemical industry. EDB is also the Fund Manager for the Eurasia Foundation stabilization and development of $8.5 billion Bank’s Headquarters is located in Alma-ATA. Have EDB has a branch in Saint-Petersburg and six representative offices in Nur-Sultan, Bishkek, Dushanbe, Yerevan, Minsk and Moscow.Interview prepared by Dmitry Butrin
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