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Wednesday, May 25, 2011

World Bank sets $6 bln in aid for Egypt, Tunisia

U.S. — The World Bank said Tuesday it was willing to provide up to $6 billion to support political and economic change in Egypt and Tunisia and to help them weather declines in tourism and other industries.
The money is intended to seed a broader package of international support for the two countries’ postrevolution governments.
The World Bank wanted “to help the people there and seize the opportunities of historic change to modernize their economies and build more open and inclusive societies,” said the agency’s president, Robert B. Zoellick.
Both Egypt and Tunisia are short on cash after their political upheavals, and the problems are unlikely to subside anytime soon. Tourists have yet to return in significant numbers to either country.
Ahead of the G-8 meetings this week in France, World Bank president Robert Zoellick said the funds would be used for stablilizing and modernizing the two countries' economies, long run down under rigid undemocratic regimes.
"The people of the Middle East and North Africa want dignity, respect, jobs and the chance for a better life," said Zoellick.
"Fulfilling the promise of the Arab Spring will mean real reforms that deepen inclusion, promote participation and expand opportunity."
Leaders at the Group of Eight meeting in Deauville, France on Thursday and Friday are expected to muster new financial support for Middle East and North African countries facing political and economic upheaval.
The Bank said it would provide up to $4.5 billion to Cairo over the next two years. It will include $1 billion tied to reforms improving governance and openness, and another $1 billion after that, "dependent on progress.
Gulf support
Qatar's planned investments in Egypt are expected to be consummated during a visit to Egypt by Qatar's emir this Saturday.
"I believe these projects, when implemented, will surpass $10bn and they will be productive products in Egypt," said the Qatari ambassador, Saleh al-Buainein.
The emirate may also buy up Egyptian government bonds in order to help fund its deficit.
It comes after the US and Saudi Arabia offered the new Egyptian government financial support.
The US said it would cancel $1bn in debts and provide a further $1bn in loan guarantees to support infrastructure finance.
Meanwhile, Saudi Arabia has offered a $4bn aid package.

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