Much-needed investment in infrastructure in the Mena region is being squeezed by government funding pressures, says a World Bank official.
World Bank says $40 billion funding gap in Arab region needs plugging
Bridging a funding gap of up to US$40 billion (Dh147bn) a year in infrastructure investment in the Arab world will become more challenging due to the fallout from recent unrest, says a World Bank official.
The World Bank and others are close to finalising a fund intended to raise up to $1bn for much-needed investment in infrastructure projects in the region, said Raymond Bourdeaux, lead infrastructure specialist for Mena at the World Bank.
Investment in hospitals, schools, roads and other public services is viewed by the World Bank as a way of easing social tensions and laying foundations for economic growth.
But infrastructure spending in some countries blighted by unrest has been squeezed. Dwindling foreign investment and pressure for government spending on subsidies and other social initiatives risk directing money away from improving public services.
"By default there's less public sector infrastructure investment available coupled with the significantly increased perception of political risk," said Mr Bourdeaux, on the sidelines of a Dubai International Financial Centre economics workshop today.
Unhappiness with poor public services played its part in fuelling recent social unrest in the region, he said.