Op-ed

Stability means trains run and fruit gets jarred

International Herald Tribune, 23 November 2001

By Jean Lemierre

As the war in Afghanistan shifts to a new phase, the focus turns to defining what constitutes victory. Is it the fall of a regime, the capture of a terrorist or the successful construction of a more democratic government?

Victory will surely be defined in part by restoration of stability and the return of predictable, peaceful ways of dealing with differences in Afghanistan. But stability must be created in other ways, too.

The Asian Development Bank, which calls itself the family doctor for Asia, is fighting poverty across the continent. War is just the latest addition to a long list of causes of hardship. The World Bank works to alleviate poverty around the world. The International Monetary Fund watches over global macroeconomic and financial stability. All these institutions currently have a sharpened focus on the countries of Central Asia - Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan and Turkmenistan.

And there are still other, complementary routes to stability and prosperity. Take the example of trains. .Uzbek Railways is about to be modernized with efficient, environmentally friendly trains that will speed its exports across Central Asia and the Caucasus to Europe, and bring back an array of products and equipment. Eight countries will cooperate along the track to improve their investment prospects, open markets and create a better life for their people.

The European Bank for Reconstruction and Development provided much of the financing for this upgrade, which is part of a European Union transport initiative. The bank understood that tracks tie together more than train stations. This bank has been working in 27 countries of the former Soviet empire, building stability through strong markets, solid democracy and the independence that comes from homegrown prosperity.

Forty subsidiaries used to be part of Uzbek Railways. Many will be turned into viable suppliers and services with the help of advisers from Western, Japanese and Taiwanese companies, funded by the European Union, Japan and others in an EBRD-administered turnaround management program. This instills entrepreneurship and technical skills needed to operate competitive companies that will provide many jobs in the new industries that will grow around a reliable rail system. The trains will carry food products from Kyrgyzstan - succulent apricots and prunes, apples and tomatoes from its mountains and valleys. The fruit was rotting after the short growing season because the only maker of glass jars in the country broke down. Financing a new glass-making furnace meant that people could again preserve their fruit and vegetables.

Another investment helped more farmers to plant more orchards and created a processing plant so that the produce could be shipped to neighboring Kazakhstan for packaging. And yet more EBRD financing provided a trade financing facility so that Kyrgyz banks could provide credit to importers to bring in the sugar needed to preserve the fruit. Next we hope to finance a local sugar refinery. The rationale for our investment in Uzbekistan is much like the reasons for a loan that we have just made to revitalize the rusting rail system in Yugoslavia. A more modern railway is an important piece of a composite that includes recent financing for trams in Belgrade, a thriving new bank for small businesses, and more reliable and efficient electricity. Enormous progress has been made in just one year since Yugoslavia was ruled by a despot and riven by war. The progress is first and foremost the achievement of the Yugoslav people. But they have progressed in no small part because the international institutions were there to help.

The writer is president of the European Bank for Reconstruction and Development. He contributed this comment to the International Herald Tribune.