March 3, 2021

G-8 Nations Pledge New Aid to Arab Spring Economies

MARSEILLE, France — With economies crumbling in the countries that touched off the Arab Spring, leaders of the Group of 8 industrialized nations on Saturday pledged $38 billion in new aid to help underpin the region’s transition to democracy, amid complaints that hardly any money from a $20 billion aid package promised in May has materialized.

In a statement following hours of meetings that included officials from Kuwait, Qatar, Saudi Arabia, Turkey and the United Arab Emirates, the G-8 acknowledged that the uprisings that swept the region were now giving way to social pressures that needed to be urgently addressed, particularly among the rising ranks of unemployed young people.

“The immediate challenge for these countries is to fulfill people’s expectations while preserving macroeconomic stability,” the group said, pointing to increasingly strained public finances and a surge in the price of food, gas and other raw materials as a source of discontent.

In a bid to bring all countries moving toward democracy in the region under its umbrella, the G-8 also had Libya sit at the table for the first time. Representatives of the Libyan national transition council participated in the discussions, and a new government would eventually receive aid to help stabilize the nation’s economy, the French finance minister, François Baroin, said.

Libya was also admitted as a member of the International Monetary Fund after its board recognized the transition council as the nation’s new government, the managing director, Christine Lagarde, said. “Libya is now formally represented at the I.M.F.,” she said. “The fund will be able to help Libya with technical assistance, contribute to its macroeconomic framework or give loans and support as needed.”

The I.M.F. will send a team to Libya “as soon as security is appropriate,” she added.

Despite those efforts, delays in delivering some $20 billion in aid that the Group of 8 pledged to Egypt and Tunisia in May could itself complicate the transition to democracy. At the time, officials compared the uprisings to the fall of the Berlin Wall, and said that Western leaders’ main aim was to ensure that instability did not undermine the process of political reform.

But four months later, Tunisia has not received any of the money promised, Jalloul Ayed, the country’s finance minister, told The Financial Times this week. Egypt has received only $500 million, that nation’s finance minister told the paper. Neither minister commented during the G-8 meetings.

The economic challenge has grown particularly severe in Egypt since the fall of President Hosni Mubarak. Revenue from tourism, a pillar of the economy, has plunged, while foreign investment has virtually dried up.

Tunisia has been plagued by similar problems since an uprising in January forced President Zine el-Abidine Ben Ali to leave the country. Mr. Ayed, the finance minister, said earlier this month that the economy would grow only about 1 percent this year, compared with an estimated 3.7 percent last year.

Mr. Baroin did not address the suggestion that the G-8’s pledges were more talk than action, except to say that the various mechanisms for disbursement take time. He offered few specifics, but said the pledge for a fresh $38 billion in financial assistance — this time also including Jordan and Morocco as well as Egypt and Tunisia — would take the form of loans, bilateral aid and debt forgiveness from countries and a slew of multinational financial institutions.

These funds — should they come — would be channeled mainly toward job creation for young people in the Middle East and North Africa, who have watched dreams of new opportunities dry up following the uprisings.

The European Bank for Reconstruction and Development will expand its current role of lending to former Communist countries and start actively participating in lending to Arab countries trying to establish democracies.

Article source: http://feeds.nytimes.com/click.phdo?i=cea0aa35ded7d1e587c62de5e9d1e17a

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