EIPR fears European Bank's future operations in Egypt will lack commitment to its founding values
As the European Bank for Reconstruction and Development (EBRD) is poised to decide on starting operations in Egypt, the Egyptian Initiative for Personal Rights (EIPR) fears the bank may renege on its own founding charter to close deals in the country.
EIPR has noticed a lack of clear commitment to the standards of democracy and human rights stated in Article 1 of the charter governing the bank's operations.
As the bank strives to engage in the financial operations in post-revolution Egypt, it seems to disregard the need to upkeep human rights, the lack of which has sparked the January 25 revolution.
The EBRD gives the impression that it does not wish to link its operations in Egypt to steps taken by the Egyptian government to support human rights and democracy.
EIPR finds some of the bank’s announced economic operations quite alarming because they will maintain the current level of violations to social and economic rights, rather than help eradicate them.
An example is the bank’s push for the liberalization and privatization of public services like provision of potable water, energy, roads and transportation which will have an adverse effect on a large sector of Egypt's population.
The EIPR has voiced similar fears regarding the repeated suggestions of public-private sector partnerships (PPP), because of the corruption, cronyism and mismanagement such projects often entailed under the former regime. The EBRD’s June concept note continues to use floating terms such as the “commercialization” of public services and infrastructure without any clear explanation of the term and with willful disregard of its expected impact.
Although the bank officials are aware of the weak legal and institutional structure of the Egyptian economy and the consequent risks of corruption, the overall bank policy seems to overlook respect for the rules of transparency.
The EIPR, therefore, has issued a detailed critique of the bank's planned operations in Egypt based on the latter's technical assessment which was reported in November 2011 and the concept note issued in June 2012. The EIPR developed a number of recommendations to the bank's management. The recommendations call for the establishment of an explicit mechanism or standards by which the economic and social impact of economic liberalization and privatization can be measured in areas such as basic infrastructure and services, particularly in light of post-revolution political and social aspirations. The EIPR recommends that any future agreements between the bank and the Egyptian government or the foreign or national private sector include "no-harm clauses" stipulating that no future projects may infringe on basic economic and social rights, including but not limited to the right to health, the right to land, the right to water and the freedom of labor association. The recommendations include also the bank's complying with Article 1 of the EBRD charter, which mandates respect for democracy and human rights and links bank projects with host governments’ compliance, and refrain from disregarding these standards in any engagement with future Egyptian governments.