G-8: World Banks to Give $20B for Arab Spring
DEAUVILLE, France -- Leaders of the Group of Eight rich nations said Friday that international development banks could give more than $20 billion to Egypt and Tunisia to support countries that overthrew dictators this year and are trying to establish free democracies.
President Barack Obama and other G-8 leaders meeting in France said in a final statement that their countries will also "mobilize substantial bilateral support to scale up this effort." The statement did not provide breakdowns of what aid specific G-8 countries would provide.
The leaders encouraged other countries, including rich Arab world nations, to contribute as well to shoring up economies in Egypt and Tunisia, where uprisings this year overthrew dictators but also scared away tourists and investors.
"In the short term, our collective aim is to ensure that instability does not undermine the process of political reform, and that social cohesion and macroeconomic stability are both sustained," the declaration said.
The more than $20 billion in aid from multilateral development banks is aimed at "suitable reform efforts" from now through 2013, the statement said, without elaborating. Some euro3.5 billion would come from the European Investment Bank.
They did not lay out exactly what the money would go for, or whether the figure includes money already promised for the region. U.S. and European officials had said that it's too early to come up with firm dollar figures.
After meetings with the leaders of Egypt and Tunisia in the French resort of Deauville, the G-8 leaders launched 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 political and economic dictatorship. The idea was to set up a "transition bank" to help lead the way on banking systems reform, price liberalization, privatization and establishing legal property rights in a region just shaking off the effects of almost 50 years of planned economies.
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 around 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 G8 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."