By Lesley Wroughton, Reuters
WASHINGTON–Industrialized nations have stepped up plans to help countries swept up in the Arab Spring rebuild their economies through more access to international credit markets, investment and trade, a senior State Department official said on Monday. Undersecretary of State Robert Hormats said while headlines from a G-8 leaders’ summit at the weekend focused on the economic crisis in the eurozone, the meeting also underscored efforts needed to stabilize the transition economies of Egypt, Libya, Jordan, Morocco and Tunisia.
The G-8 launched the so-called Deauville Partnership last year, including global lenders such as the IMF and World Bank, after uprisings in Tunisia, Egypt and Libya ended decades-long dictatorships and protests prompted political reforms in countries such as Morocco and Jordan.
Hormats said there had been political and economic advances in the countries since the Arab Spring events, but financial conditions were still challenging and countries needed to export more and attract foreign investment. “This meeting … was designed to give political support to the countries and also recognize we need to continue to build,” he told Reuters. “Things are changing but they still have big financial challenges and need resources. The fact that there is economic weaknesses in their biggest Mediterranean markets is not helpful to them,” he added, referring to the eurozone economic crisis. The G-8 agreed to create a capital markets access initiative to help the five countries tap international capital markets “under reasonable financing terms” to meet their financing needs and allow government enterprises to invest in projects that create jobs, according State Department and U.S. Treasury statements on Monday. G-8 donors also agreed to create a new transition fund to strengthen government institutions vital for economic development, they added. The European Bank for Reconstruction and Development was also trying to change its charter to create a special fund worth US$4 billion to invest in the region over the next three years, Hormats said.
“We’d like to get it done within the next month or so but certainly by September,” he said of the plans.