World Bank Group support to MENA countries during global financial crisis – World Bank feature story

The World Bank Group Reinforces its Support to MENA Countries in response to the Global Financial CrisisThe World Bank Group Reinforces its Support to MENA Countries in response to the Global Financial Crisis

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Contacts

In Washington:

Najat Yamouri

Office: 202-458-1340

nyamouri@worldbank.org 

Dina Elnaggar

Office: 202-473-3245

delnaggar@worldbank.org 

WASHINGTON, July 24, 2009 — The World Bank Group (the International Bank for Reconstruction and Development, the International Development Association, the International Finance Corporation, and the Multilateral Investment Guarantee Agency) committed US$ billion 3.2 in fiscal year 2009 to MENA countries as they continue to manage the impact of the global financial crisis while maintaining the pace of reforms for economic growth, job creation and poverty reduction.

“In MENA, the need for rapid interventions and an early response to governments in the region was critical to ensure speedy recovery, and to mitigate the impact of the crisis on growth and poverty particularly in countries undergoing economic transition, political change and conflict affected countries,” said Shamshad Akhtar, Vice President for the Middle East and North Africa region. “Looking ahead, we will continue to build on the pace and momentum of our assistance to ensure that MENA countries broaden and deepen economic and social reforms to adhere to macroeconomic stability, achieve social cohesion and have the opportunity to benefit from global economic integration.  Our focus will remain on supporting key macroeconomic policy reforms, investing in critical infrastructure as well as in human capital, and strengthening social safety nets, so that the hard-fought gains of reforms are not jeopardized.” The World Bank is also starting to foster regional cooperation through the Arab World Initiative which would facilitate greater economic stability and growth.

During fiscal year 2009 (July 1, 2008-June 30, 2009), the World Bank Group placed high priority on helping countries respond to the food, fuel, financial and economic crises.  In terms of results, a number of operations were delivered which have already helped mitigate the impact of these crises on the poor.  Examples include: financial support for the food crisis in Djibouti, Yemen and West Bank & Gaza in addition to the rapid response to the Yemen flood emergency situation, for which IDA provided a $35 million grant. In addition, several projects and technical assistance was provided to address bottlenecks and shortages as well as capacity development in the financial, infrastructure, food security, education and social protection sectors in Egypt, Jordan, Lebanon and Tunisia. Commitments from the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA) to middle income and low income countries respectively totaled US$1.9 billion in fiscal year 2009, a record high for the World Bank portfolio in the MENA region.

 “The rising demand from countries across the region for the World Bank’s financial and technical assistance is evidence of the enhanced partnerships that we are developing with countries across MENA, “ said  Emmanuel Mbi, Director of Strategy and Operations in the MENA region. “We are doing our best to tailor our responses and instruments to the needs of our partners and to contribute to their efforts to encourage economic growth and to reduce poverty under such challenging conditions.”

IFC

IFC's investments in the Middle East and North Africa were around US$1.3 billion in 46 projects in 12 countries in fiscal year 2009. IFC's Advisory Services increased its expenditure to more than $19 million, up substantially from $5.7 million four years ago to support private sector–led growth in the region.  To address the effects of the financial crisis in the region, IFC offered investment and advisory services products to support clients in these challenging times. For example, IFC worked closely with many of its client banks across the Middle East and North Africa   region to assist them in structuring robust risk management systems to help reverse the decline in trade flows in the region, IFC provided around US$500 million of trade finance to banks in Afghanistan, Jordan, Lebanon, Pakistan, West Bank/Gaza, and Yemen.

 “In laying out his vision for the World Bank Group, President Robert Zoellick has suggested six strategic themes.  One of them is to help advance development and opportunity in the Arab world. During this year we focused our financial strength and global expertise to bring investment and advisory solutions where they are needed most, especially in less developed countries and countries affected by conflicts. The success of our investments is demonstrating the viability of these markets. This in return contributes to the broader goal of spurring economic growth and creating much needed jobs in a region with high unemployment rates," said Michael Essex, IFC Director for the Middle East and North Africa.

MIGA

In the MENA region, MIGA is facilitating investments that can help countries overcome their over-reliance on oil income, while creating jobs and supporting the private sector as they make investments inside and outside the region. Since 1988, MIGA has issued nearly US$1 billion in guarantees in the Middle East and North Africa region, as well as some US$881 million in guarantees to MENA-based companies and banks investing in developing countries outside the region.

In October, 2008, Iraq joined MIGA. "There is a growing business interest in investing in Iraq.  However the business climate is not yet there,” said Izumi Kobayashi, MIGA’s Executive Vice President.  “We are tailoring our instruments to enhance our responsiveness to support Iraq and other MENA countries in managing a stable economy and promoting private sector investments in a developing business environment,” she added.