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Tue 24 May 2011 10:58 PM

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World Bank pledges up to $6bn to Egypt, Tunisia

President Robert Zoellick announces new support over next two years linked to economic progress

World Bank pledges up to $6bn to Egypt, Tunisia
World Bank president Robert Zoellick. (FABRICE COFFRINI/AFP/Getty Images)

World Bank Group president Robert Zoellick on Tuesday announced up to $6bn in new support over the next two years for Egypt and Tunisia linked to progress by the two post-revolutionary countries to modernize their economies.

Zoellick said $4.5bn was available to Egypt over the next 24 months as part of a potential package including an International Monetary Fund programme to address budget and reserve shortfalls and reforms that strengthen its credit and investment prospects.

The support includes $1bn for Egypt’s budget this year linked to governance and openness reforms with a further $1bn available next year dependant on progress, he added.

The balance would be made up of investment lending for specific projects, financing for private businesses and political risk and guarantees.

For Tunisia, Zoellick said $1bn in support for the budget and for investment projects could be available in addition to the $500m already announced by the World Bank as part of a $1.2bn package from the African Development Bank and European donors. 

“The people of the Middle East and North Africa want dignity, respect, jobs and the chance for a better life," said Zoellick ahead of this week’s Group of Eight meeting in France.

"Fulfilling the promise of the Arab Spring will mean real reforms that deepen inclusion, promote participation and expand opportunity. Our support, and that of others, can sustain momentum and accelerate progress, but only if coupled with real reform.”

Zoellick said the World Bank was working closely with the IMF and other multilateral development banks on an integrated approach to stabilising and modernising the economies of the region.

“Governments need to make a break from the past and become more open, accountable and transparent so that citizens can play the role they deserve in development.”

The announcements of new World Bank support come as the institution announced new forecasts that showed a marked slowdown in economic growth in the Middle East and North Africa.

The Bank’s economic update for the region forecasts economic growth in 2011 will be 3.6 percent, down from a previously estimated five percent. 

This is primarily due to a sharp drop in Tunisian and Egyptian economic activity but also because of weaker growth in developing oil exporters.

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