World Bank sets $6 billion in aid for Egypt, Tunisia
WASHINGTON - The World Bank announced Tuesday up to $6 billion in new aid to Egypt and Tunisia to help modernize and revitalize their economies after revolts which ejected long-serving strongmen earlier this year.
Ahead of the G-8 meetings this week in France, World Bank president Robert Zoellick said the funds would be used for stablilizing and modernizing the two countries' economies, long run down under rigid undemocratic regimes.
"The people of the Middle East and North Africa want dignity, respect, jobs and the chance for a better life," said Zoellick.
"Fulfilling the promise of the Arab Spring will mean real reforms that deepen inclusion, promote participation and expand opportunity."
Leaders at the Group of Eight meeting in Deauville, France on Thursday and Friday are expected to muster new financial support for Middle East and North African countries facing political and economic upheaval.
The Bank said it would provide up to $4.5 billion to Cairo over the next two years. It will include $1 billion tied to reforms improving governance and openness, and another $1 billion after that, "dependent on progress."
Tunis will get $1.5 billion -- $500 million of it previously announced -- for budget and investment projects, the Bank said.
Bank funds will aim at building job creation in both countries.
"Our support, and that of others, can sustain momentum and accelerate progress, but only if coupled with real reform," Zoellick said in a statement.
In snowballing revolts earlier this year dubbed the Arab Spring, Tunisians overthrew the 24 year old regime of president Zine El Abidine Ben Ali, while Egyptians tossed out Hosni Mubarak after 20 years. Both leaders had let their economies crumble and unemployment fester, fueling the uprisings.
Both are now trying to reorganize for more democratic rule under fragile interim regimes, which the World Bank said will pose challenges.
"We recognize we've got a transition process here," Zoellick told reporters.
"Part of our challenge is to work with transition governments in a way that provide near-term support, but also recognize we have to build in flexibility because you've got an ongoing political process."
While the Bank acknowledged the political nature of the revolts, it stressed that the poor state of their economies and lack of job opportunities were crucial factors.
"With relatively high rates of unemployment at around 10 percent and youth unemployment at 24 percent, approximately 50-75 million jobs are needed over the next decade to absorb new labor market entrants and to bring down unemployment," in the Middle East and North Africa region, the Bank said.
"Only 48 million jobs will be created if countries continue to grow as they did over the past decade."
The uprisings have sharply crunched the economies of the two countries, forcing the IMF to revise downward its regional growth estimate to 3.6 percent from 4.8 percent earlier.
At the meeting of the G-8 -- Britain, Canada, France, Germany, Italy, Japan, Russia and the United States -- a key issue will be coordinating efforts and funds to strengthen the new leadership in the two countries and other regional countries struggling to reform.
"We're working closely with the IMF and the other multilateral development banks on an integrated approach to try to stabilize and then modernize the economies of the region," Zoellick said.
"And these joint efforts will be the subject of the discussions we'll have with the Group of Eight. What I hope to emphasize is the interconnection of the success of growth in Tunisia, Egypt, and all across North Africa and Middle East, linked to the investment and trade agenda."