Leaders of the world’s eight leading economies have promised to mobilize up to $40 billion to support economic development and political reforms in countries in the Middle East and North Africa.
The pledge is part of an agreement reached by the leaders of France, the United Kingdom, the United States, Russia, Japan, Canada, Germany and Italy at the end of their 37th summit in France. Dubbed the “Deauville Partnership,” the agreement outlines the G-8’s commitment to support MENA countries as they undergo political and economic transitions.
According to the G-8 declaration outlining the partnership, multilateral development banks could provide $20 billion worth of aid to Egypt and Tunisia from 2011 to 2013, including €3.5 billion ($5 billion) from the European Investment Bank.
This assistance is expected to be tied to recipients’ commitment and progress to reform efforts, The New York Times notes, citing a U.S. official who said that the aid was “not a blank check” but an “envelope that could be achieved in the context of suitable reform efforts.”
The declaration adds that G-8 members are ready to “mobilize substantial bilateral support” to the multilateral assistance package as well as welcome bilateral aid from other partners, but it does not outline specific financial commitment from any of the eight countries.
French President Nicolas Sarkozy did say that G-8 members aim to provide an additional $10 billion, and Saudi Arabia, Kuwait and Qatar are ready to mobilize a further $10 billion, The Wall Street Journal reports. Qatar is also urging other rich Arab countries to consider establishing a Middle East development bank that will support transitioning economies in the region, according to The New York Times.
The Deauville Partnership, according to the declaration, is designed to support Tunisia, Egypt and other MENA countries in the “economic and social reforms that they will undertake, particularly to create jobs and enshrine the fair rule of law, while ensuring that economic stability underpins the challenge of transition to stable democracies.”
The G-8 will initially support Egypt and Tunisia but will “ultimately” expand its assistance to “any country that embraces the path to democracy and reform,” said Sarkozy, who chaired the G-8 meeting, according to The Associated Press.
The partnership has drawn mixed reactions from experts, with some analysts praising the G-8 for infusing much needed financial support that could help boost investor confidence in Egypt and Tunisia, while others have criticized the declaration as “purposefully vague.”
“In its present form, no one can determine how consequential it might become once it’s implemented,” The Wall Street Journal quotes Igor Lukes,a history and international relations professor at Boston University.
Meantime, a U.S. official defended the partnership, which he said lays out an important vision.
“This is largely a case of trade not aid, investment not assistance over time. It’s really about establishing the conditions under which the private sectors in these economies can flourish and the benefits of growth are broadly shared,” Michael Froman, the U.S. deputy national security adviser for international economic affairs, said, as quoted by WSJ.
More on aid to MENA countries:
>> EU Adopts New Policy, Announces More Aid for Eastern, Southern Neighbors
>> World Bank Announces $6B Support for Egypt, Tunisia
More on the 37th G-8 summit:
Read more development aid news.