Abu Dhabi, UAESaturday 16 November 2019

World Bank to pump billions of dollars into Mena economies this year

Jordan, Egypt and Morocco in line for greater support, official says

Debt-riddenJordan is among the top Mena countries that the World Bank expects to provide loans to in 2019. Courtesy: Four Seasons Hotel Amman
Debt-riddenJordan is among the top Mena countries that the World Bank expects to provide loans to in 2019. Courtesy: Four Seasons Hotel Amman

The World Bank will provide billions of dollars in loans to the Middle East and North Africa in 2019 to accelerate economic reforms under way in countries such as Jordan, Tun­isia and Egypt, its regional vice-president said yesterday.

However, total funding is expected to decline slightly from the record $6.2 billion the bank invested in Mena in 2018, as some countries – most notably Tunisia – are approaching their maximum borrowing limit.

“Some countries we have supported with loan financing over the past few years have nearly reached that ceiling, so we may not match the record package we distributed last year,” Ferid Belhaj, vice-president for the Middle East, told The National.

Last June, the bank approved a $500 million loan to shore up Tunisia’s budget – the latest in a series of funding packages to the country since 2011.

For such countries, the bank will continue to provide policy development and other advisory services to help them implement the reforms needed to expand their private sectors and boost economic growth, Mr Belhaj said. Funding decisions for other countries will be made over the coming months.

Jordan will be a big area of focus in 2019, the vice-president said. “We are looking aggressively at [assisting] Jordan, which we believe is doing a good job of reinventing its economic model to move away from an assistance programme to a Jordan that is open for business.” Any agreed programme will aim to enhance the investment climate and make it easier for the private sector to get involved, he said.

Jordan’s economy is hobbled by a high level of public debt at around 95 per cent of gross domestic product, according to the International Monetary Fund. In June, Arabian Gulf states pledged $2.5bn in aid to stabilise the economy.

“This is a country that has been going through a very, very tough time, in part because of the [Syrian] refugee crisis,” Mr Belhaj said. “They have made tremendous efforts at reforming within a tough context.”

The World Bank expects to finalise new funding for Jordan after the conference, but Mr Belhaj would not disclose the likely size of the package.

Egypt, which has already received $1.3bn from the World Bank to support an IMF-backed reform programme to reverse years of economic decline, is another country of focus.

The North African country’s GDP in the year ending last June expanded 5.4 per cent, up from 4.2 per cent in the year-earlier period, making Egypt one of the fastest growing economies in Mena. The government is targeting growth of up to 8 per cent for the 2021-22 fiscal year.

“Egypt is possibly the brightest spot in the region and clearly what they’re doing is working, so we may help further,” Mr Belhaj said.

Updated: February 12, 2019 10:04 AM

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