World Bank Will Lend Up to $6 Billion to Egypt, Tunisia Following Revolts
World Bank President Robert Zoellick
Brendan Hoffman/Bloomberg
World Bank President Robert Zoellick.
World Bank President Robert Zoellick. Photographer: Brendan Hoffman/Bloomberg
The World Bank said it plans to provide as much as $6 billion in financing to Egypt and Tunisia over the next two years to help them modernize their economies after popular revolts toppled their leaders this year.
Support would include $4.5 billion for Egypt, where the International Monetary Fund is also expected to provide a loan, World Bank President Robert Zoellick said on a conference call today. The Washington-based bank may also make $1 billion available to Tunisia, in addition to $500 million in aid announced last month and not yet approved by the lender’s board.
“The revolutions in the Middle East and North Africa offer great opportunities but also pose daunting challenges and risks,” Zoellick said.
Leaders from the Group of Eight will discuss support for countries in the region in the wake of pro-democracy movements at a meeting this week in Deauville, France. President Barack Obama has proposed $2 billion in U.S. assistance for Egypt, $1 billion in loan guarantees through the Overseas Private Investment Corp. and cancellation of $1 billion in debt, about a third of what Egypt owes the U.S.
The Arab world and North Africa have been shaken by anti- government demonstrations against corruption and economic hardship. Tunisian President Zine el Abidine Ben Ali left office on Jan. 14, followed by Egyptian President Hosni Mubarak, in command for three decades, on Feb. 11.
The World Bank today reduced its growth forecast for the Middle East-North Africa region to 3.6 percent from a previous estimate of 5 percent, because of a drop in Tunisia and Egypt and weaker growth in developing oil exporters.
The new forecasts “not only underscore the need for financial support for the region but also emphasize the centrality of sound policies,” Zoellick said.
The bank in a report today recommended opening the government to the people, improving social inclusion, boosting job creation amid 10 percent unemployment and accelerating private sector growth as the main engine for jobs.
To contact the reporter on this story: Sandrine Rastello in Washington at srastello@bloomberg.net
To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net
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