Arab Spring to get $40 billion in aid
Rich countries and international lenders are aiming to provide $40 billion in funding for Arab nations trying to establish free democracies, officials said at a Group of Eight summit Friday.
The officials didn’t provide a breakdown of where the money would come from or when, or what it would be for.
But the overall message from President Barack Obama and the other G-8 leaders meeting at a Normandy resort appeared to be warning autocratic regimes in the Arab world that they will be shut out of rich-country aid and investment, while new democracies are encouraged to open their economies.
Tunisia’s finance minister said French President Nicolas Sarkozy floated the $40 billion figure at talks Friday, in which the prime ministers of Tunisia and Egypt joined the G-8 leaders and appealed for help after uprisings earlier this year that overthrew longtime autocrats but also scared away tourists and investors.
A French official says $40 billion is the overall goal, but that breakdowns by country and timetables are still under discussion. The official was not authorized to be publicly named according to his office policy.
A group statement from the G-8 leaders said that $20 billion from international development banks could go to Egypt and Tunisia over the next three years.
Beyond the institutional funding, the French official said the aim was for another $20 billion in bilateral support from G-8 members as well as from rich Persian Gulf states and others.
“We are really very satisfied by the very strong, very clear, very precise declarations that have come from all the G-8 nations and financial institutions – bilateral agencies and development banks,” Tunisian Finance Minister Jaloul Ayed told reporters in Deauville. He said foreign ministers and finance ministers from the countries involved were expected to meet between now and early July to flesh out details of the aid package.
Tunisia’s government said it was asking the G-8 for $25 billion over the next five years, and Egypt says it will need between $10 to $12 billion for the fiscal year that begins in July to cover its mounting expenses.
“This isn’t the end, additional funding will likely come from other sources after the G-8, and I think they’ll be satisfied with at least the ball starting to roll,” said Jenilee Guebert of the G-8 Research Group at the Munk School of Global Affairs in Toronto.
U.S. and European officials had said that they would not announce an aid figure at this summit, thinking it was too early to do so.
“They said their main problem was the economy. They need some support,” European Commission President Jose Manuel Barroso told reporters Friday after meeting the Egyptian and Tunisian leaders. “I think they are ready. Let’s do everything to support the Arab Spring. I think they can succeed.” Uncertainty lingers, however, about the fragile governments in Egypt and Tunisia as they prepare for elections later this year, and there is debate over how to handle Libya’s war.
The G-8 leaders are also worried that fighting in Libya and violence against protesters in Syria could derail the pro-democracy movement that has swept the Arab world since Tunisian protesters rose up against an autocratic regime and forced out their longtime president.
In their final statement, the G-8 leaders said Libyan leader Moammar Gadhafi “must go” and are pressing Syria’s regime to “stop using force and intimidation” against its people.
The G-8 leaders say Gadhafi and his government have failed to fulfill their responsibility to protect Libya’s people “and have lost all legitimacy. He has no future in a free, democratic Libya.” The main product of the G-8 summit was a partnership program aimed at supporting the countries’ fragile political leadership and fighting corruption and stabilizing the economies.
The G-8 leaders laid out a plan for refocusing the European Bank for Reconstruction and Development – created to help eastern European economies after the collapse of communism – to help Arab democracies.
The EBRD was set up 20 years ago, when the sudden collapse of the Soviet Union convinced European leaders of the urgency to provide support to a region emerging from decades of dictatorship. The idea was to set up a “transition bank” to help lead the way on banking reform and development.
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