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“Inclusive”: the EBRD’s transition concept

Economic inclusion, the opening up of economic opportunities to previously under-served social groups, is integral to achieving transition towards sustainable market economies.

An inclusive market economy ensures that anyone - regardless of their gender, place of birth, socio-economic environment, age or other circumstances - can access labour markets, entrepreneurship and, more generally, economic opportunity. Promoting an inclusive market-based system is therefore about the efficient allocation of human resource within an economy rather than social policy.

Operationally, inclusion enhances the EBRD's investments by creating economic opportunities for young people, women, and people in less advanced regions. These are broadly defined as access to jobs and skills, finance and entrepreneurship and services such as IT connectivity or improved water connections.

Transition Impact (TI) is awarded to those projects that can show that they increase economic opportunities for at least one target group, particularly in countries where inclusion transition gaps are largest.The EBRD’s unique approach to inclusion leverages its strong private sector engagement to demonstrate how positive inclusion practices can also support clients in addressing key operational challenges.

For instance, the lack of a well-trained work force often results in high staff turnover and lower productivity - a barrier to innovation and growth. Inclusion projects address these challenges by improving training provision, establishing skill standards that reflect employer needs or supporting clients to develop new products and services to access underserved market segments.

Examples include improved vocational training programmes in manufacturing or retail sectors to help young people gain skills needed by employers, equal opportunities initiatives helping more women to access jobs in areas where they are still underrepresented, training partnerships between agribusiness companies and schools or universities, Women in Business programmes supporting female entrepreneurs through business finance and advice, or urban transport projects introducing inclusive procurement practices.

The EBRD is the only IFI that builds such inclusion elements directly into its investments, creating a unique added value for our clients and policy stakeholders.

Since its integration into the EBRD’s transition concept in 2013, inclusion has been considered as a ‘cross-cutting’ issue across the existing seven transition dimensions. This was also confirmed in the EBRD’s Strategy for the Promotion of Gender Equality, which was approved in 2015.

Having being named as one of the six new transition “qualities”, inclusion will now be fully integrated into the EBRD’s updated transition assessment process.