EconSource: World Bank Says Support to MENA Will Total $20 Billion in the Next Five Years

World Bank Group President Jim Yong Kim announced Thursday that the World Bank Group will triple its commitment to the Middle East and North Africa over the next five years to nearly $20 billion. The World Bank Group, in partnership with the Islamic Development Bank and the United Nations, has launched an initiative to expand the amount of financing available to the region. For Jordan and Lebanon, the MENA Financing Initiative aims to provide concessional financing by using grants from donor countries to buy down interest on loans. The goal is to raise $1 billion dollars of grants from donors to leverage between $3 and $4 billion dollars in concessional financing. A second initiative aims to support rebuilding and recovery by tapping international financial markets to issue special bonds, including Islamic bonds. Meanwhile, in a report on Thursday, the World Bank said that 2015 economic growth in MENA likely came to just 2.6 percent, falling short of a 2.8 percent forecast. The bank said five years of war in Syria and spillovers to neighboring countries cost the region about $35 billion. [World Bank, Reuters, 2/4/2016]

Egypt sees World Bank funds arriving soon, eyes more Saudi aid
Egypt expects to receive a $1 billion World Bank loan approved in December once it finalizes outstanding paperwork and negotiates more aid from Saudi Arabia, International Cooperation Minister Sahar Nasr said Thursday. However, Egyptian media has questioned whether the $1 billion tranche of a three-year $3 billion loan from the World Bank will arrive soon, as it is linked to the government’s economic reform program, including plans for value-added tax (VAT). Egypt’s new parliament has yet to ratify the government’s economic plan or the World Bank loan. “We are just working on submitting the required documentation. It is nothing. We are normal. There is nothing [to say] about it,” Nasr said of the loan. Egypt is also in talks with Saudi Arabia to secure more aid, Nasr said. Egypt is negotiating the the details of a Saudi pledge to invest $8 billion in Egypt and a separate pledge to provide Egypt with petroleum aid over five years. Egypt signed an initial three-month deal with Riyadh to meet immediate needs while talks were ongoing. [Reuters, 2/4/2026]

Saudi foreign policy ‘will not be determined by oil price’
Saudi Arabia will not let a drop in global oil prices derail its foreign policy, Foreign Minister Adel al-Jubeir has said. “Our foreign policy is based on national security interests,” he said Thursday at the Ministry of Foreign Affairs headquarters in Riyadh, speaking on Saudi Arabia’s military campaign in Yemen and financial aid to Egypt. “We will not let our foreign policy be determined by the price of oil.” The oil shock left Saudi Arabia with a budget deficit of about $98 billion last year, pushing the kingdom to cut spending on energy subsidies and building projects. Meanwhile, Iran’s return to world markets is set to add to the global oil supply. Al-Jubeir said, “We believe there is sufficient room in the market for countries who produce oil.” [Bloomberg, 2/5/2016]

Tunisia calls for financial support from allies
Tunisian President Beji Caid Essebsi on Thursday called for financial support from the country’s partners. “Though confident in the national economy’s capacity to recover, Tunisia aspires to a financial and economic support from its partners and friends,” Essebsi said. He said the support of Tunisia’s allies is vital to help stabilize the country. “The causes that triggered the revolution spark are still present,” Essebsi said, adding that that Tunisia’s democratic process has not been accompanied by improvements in the economy, development, and youth unemployment. He emphasized the government’s commitment to create a new economic environment that will encourages investment and fair competition and speed up job creation. [TAP, 2/4/2016]

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