x Abu Dhabi, UAEWednesday 26 July 2017

World Bank and Qatar pledge aid for Mena countries hit by unrest

Egypt and Tunisia have been offered financial aid as G8 leaders gather to discuss their plight.

The World Bank and Qatar have become the latest global donors to pledge billions of dollars of financial aid to struggling nations rocked by unrest in the Middle East and North Africa.

The move comes as officials from Egypt and Tunisia head to today's annual meeting of the world's Group of Eight (G8) leading economies to seek further support.

How to help economic recovery in regional countries recovering from turmoil will feature at the top of the agenda at the G8 discussions in France.

The latest offer of support on Tuesday from the World Bank includes as much as US$6 billion (Dh22.03bn) in financing to Egypt and Tunisia over the next two years. The amount includes $4.5bn for Egypt as part of a potential package expected to include support from the IMF.

The fund may also make available $1.5bn - $500 million of it previously announced - for Tunisia in support of the country's budget and investment prospects.

"The people of the Middle East and North Africa [Mena] want dignity, respect, jobs and the chance for a better life," said Robert Zoellick, the World Bank president. "Fulfilling the promise of the Arab spring will mean real reforms that deepen inclusion, promote participation and expand opportunity."

The support of the World Bank and of others could sustain momentum and accelerate progress but only if coupled with real reform, he said.

Waning foreign investment and greater public spending on subsidies and other social initiatives is putting government finances under increasing pressure in economies blighted by unrest.

So far, Egypt appears to have made the most progress in capturing financial support.

Saudi Arabia this week pledged $4bn to the country.

That was after Barack Obama, the US president, said the US would cancel up to $1bn of debt owed by Egypt and guaranteed another $1bn loan.

Qatar is the latest possible donor in the frame, it emerged on Tuesday. It could inject about $10bn in investments and projects into the country, Saleh Abdul-Enenein, Qatar's ambassador to Egypt, was quoted as saying in the Egyptian newspaper Al Ahram on Tuesday.

Meetings later this week between officials from the two countries would include the signing of agreements for joint projects and investments, he was quoted as saying.

Egypt's deficit is forecast to reach $31bn next year as the country's vital tourism sector remains in the doldrums.

Officials from both Egypt and Tunisia are making the trip to the Normandy resort of Deauville for what the French hosts are calling "the founding moment" of a partnership between th e G8 and the North African nations.

They will discuss details of what some are calling a "Marshall Plan", similar to the support package from the US that helped rebuild Europe's economy after the Second World War.

The World Bank cut its growth forecast for the Mena region this year to 3.6 per cent from a previous estimate of 5 per cent.

Weaker growth in Tunisia, Egypt and developing oil exporters prompted the revision, it said.

Liberalising the government, accelerating social inclusion, creating more jobs and promoting private-sector expansion were the main needs in those countries, it said.

tarnold@thenational.ae