At IMF-World Bank spring meeting, fragile states high on agenda

Urgent assistance for fragile and conflict states became the focal point for the spring meeting of the World Bank and International Monetary Fund held over the weekend. Photo by: Simone D. McCourtie / World Bank

As revolts continue to alter the political and developmental landscape of the Arab region, urgent assistance for fragile and conflict states became the focal point for the spring meeting of the World Bank and International Monetary Fund held over the weekend. 

At the April 16-17 meeting in Washington, World Bank President Robert Zoellick called for immediate policy and financial support for Middle East and North African countries reeling from political crises.

“We must act now,” Zoellick urged Saturday (April 16). “Waiting for the situation to stabilize will mean lost opportunities. In revolutionary moments the status quo is not a winning hand.”

World Bank support for fragile and conflict states will focus on job creation, private sector development, inclusive growth, development of strong institutions, and enhancement of security and justice, according to the final communique of the meeting, echoing the arguments of the latest World Development Report on conflict, security and development, which emphasized the link between conflict resolution and economic development.

On the margins of the spring meeting, representatives from multilateral development banks met and agreed with G-8 and Arab finance ministers on a framework for approaching the crises in the Middle East and North Africa.

“This framework will be worked on and deliver results through the meeting this year of the G-8 and the G-20,” Zoellick said.

U.S. Treasury Secretary Timothy Geithner stressed the role of multilateral development banks in addressing existing development challenges in the regions, such as climate change and the political turmoil.

“With domestic resources constrained, no other institutions so effectively leverage our limited resources and provide such a positive impact on the ground in service of our national and global interests,” Geithner said on the sidelines of the spring meeting, as quoted by Dow Jones Newswires.  

Civil society and the Arab crisis

In order to bring lasting solution to the political crisis gripping the Arab world, Zoellick underscored the participation of civil society in promoting stability and development.

“We need a new social contract where governments listen to their people and include them in their development process,” the World Bank chief said.

Just before the start of the spring meeting, the World Bank announced Friday (April 15) the approval of a $3.5 million grant for the Arab World Affiliated Network for Social Accountability, or ANSA, to help support active citizen participation and social accountability in the region.

The grant will help to develop “ANSA –Arab World,” which forms part of the bank’s  Arab World Initiative aimed enhancing the bank’s support for civil society participation in development.  

MDGs and fragile states

Not one conflict-affected country has yet to attain even one of the Millennium Development Goals, with fragile states lagging behind so far behind, according to the “Global Monitoring Report 2011: Improving the Odds of Achieving the MDGs,” released during the spring meeting.

“We are 3 years away from the 2015 goal. It is going to be hard to paint that as a success story unless we make more progress on fragile states,” Zoellick conceded.

The report, which examines country performance in realizing MDGs, paints a hopeful picture in attaining the goals on halving global poverty, promoting gender parity in primary and secondary education, completion of primary education, access to safe drinking water, and overcoming extreme poverty and hunger.

But targets on child and maternal mortality, and access to sanitation will likely be missed, the report notes.

Many African countries are also behind in attaining the MDGs. The report notes that 17 African nations are far from halving extreme poverty, even as the aggregate goals will be reached.

African officials said Saturday limited access to support of traditional partners prompts them to rely on Chinese development aid, Agence France-Presse reports.

Togo’s Minister of Finance Adji Oteh Ayas said at the IMF-World Bank meeting in Washington: “Most of our countries cannot access the markets to borrow. We are forced to turn to sources of concessional financing, which are now very, very limited.”

“We are forced to fall back on Chinese loans, which are concessional and affordable for our country,” he added.  

New financing sources for Arab region

At their meeting on Friday (April 15), the world’s top 20 economies said they were willing to help identify new sources of financing for Middle Eastern and North African countries who are undergoing political transitions.

Finding ways to support the economic development of these countries is a priority, officials from the United Kingdom, United States and France said, according to the Financial Times.

Finance ministers from the Group of 20 countries are gathering in Washington D.C. for the spring meeting.  Discussions in the meeting are expected to include talks on whether the European Bank for Reconstruction and Development needs to modify its objectives to be able to lend to the MENA region, the Financial Times says. This is in line with a request from Egypt, an EBRD stakeholder, for assistance from the bank.

EBRD is likely to approve lending to Egypt during its annual meeting in May, Russia’s Deputy Finance Minister Sergei Storchak said on Thursday as reported by Reuters.

“All is leading to the expansion of the mandate of the European Bank for Reconstruction and Development,” Storchak said following a meeting with Geithner, French Finance Minister Christine Lagarde, as well as officials from Canada, Japan, Russia, Turkey, Saudi Arabia, Egypt, Tunisia and other countries.

“Either both countries (Egypt and Tunisia) … or one of them will become a country of the bank’s operations,” he added.

A senior IMF official, meanwhile, said Friday his organization is evaluating the needs of Egypt and Tunisia after the political revolts that toppled authoritarian regimes in these nations early this year, Agence France-Presse reports.

On assistance to Egypt, Masood Ahmed, IMF director for the Middle East and Central Asia, said: “We are discussing and… are happy to provide a financing, but there is this process of trying to find what is the nature of this financing they could mobilize before making a firm decision whether and what kind of financing they might need from us.”

Tunisia, meanwhile, has not “yet seen any additional financing needs that need to be met from the Fund. But again we’ll be happy to support that,” he added.

Ivy Mungcal contributed to this report.

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    Ma. Rizza Leonzon

    As a former staff writer, Rizza focused mainly on business coverage, including key donors such as the Asian Development Bank and AusAID.