World Bank Announces $6B Support for Egypt, Tunisia

A protester wearing face paint in Egypt. The World Bank is providing $4.5 billion in aid to Egypt depending on the country's progress in implementing governance and transparency reforms. Photo by: Ahmad Hammoud / CC BY

Ahead of the G-8 leaders’ meeting in France this week, the World Bank has outlined plans to provide up to $6 billion worth of new support to Egypt and Tunisia.

The World Bank is planning $4.5 billion in aid for Egypt over the next two years, including $1 billion worth of budget support for 2011 and a further $1 billion in 2012 depending on the country’s progress in implementing governance and transparency reforms, World Bank President Robert Zoellick announced May 24. The remaining $2.5 billion will be invested in specific projects and support private businesses, Zoellick said.

This assistance forms part of a potential aid package that would be linked to a separate International Monetary Fund program for Egypt, Zoellick added.

Meantime, for Tunisia, Zoellick said the World Bank is planning $1 billion in budget support and investments as well as up to $400 million from the International Finance Corp. for the country’s private sector and $100 million worth of annual loan guarantees from the Multilateral Investment Guarantee Agency. This aid, according to Zoellick, is in addition to the $500 million the bank had already pledged as part of a $1.2 billion multidonor package for the country.

Zoellick said the World Bank is working closely with other multilateral development banks to develop an integrated approach to stabilize and modernize the economies of MENA countries.

“These joint efforts will be the subject of the discussion we’ll have with the Group of Eight at the summit later this week in Deauville, France,” Zoellick said.

Leaders of the United States, the United Kingdom, France, Germany, Italy, Japan, Canada and Russia are meeting May 26-27 in the northwestern French city for their 37th summit. Assistance for Egypt, Tunisia and other MENA countries as well as the situation in Libya are expected to top the leaders’ agenda.

In particular, the G-8 leaders are expected to announce a package of economic and political assistance for Tunisia and Egypt, according to The Wall Street Journal. The package is expected to be similar to the assistance plan outlined May 19 by U.S. President Barack Obama, but it is unclear whether or not it would include a specific financial commitment, the news agency says, citing U.S. officials.

>> Obama Outlines US Economic Support Plan for Egypt, Other MENA Countries

Obama arrived in the United Kingdom on Tuesday (May 24) and is scheduled to meet with U.K. Prime Minister David Cameron and speak before the U.K. Parliament on Wednesday (May 25). In their meeting, Obama and Cameron are expected to discuss multibillion-dollar plans to boost international financial and political assistance to Egypt and Tunisia, the Guardian says.

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    Ivy Mungcal

    As former senior staff writer, Ivy Mungcal contributed to several Devex publications. Her focus is on breaking news, and in particular on global aid reform and trends in the United States, Europe, the Caribbean, and the Americas. Before joining Devex in 2009, Ivy produced specialized content for U.S. and U.K.-based business websites.