$80 Billion Financial Aid For Arab States

MARSEILLE, France: Arab states yesterday got a financial shot in the arm with promises of tens of billion of dollars of aid. G8 nations and institutions including the World Bank, the IMF, regional banks and the Arab Monetary Fund pledged nearly $80 billion in aid and loans over the next two years, doubling the amount promised earlier this year.

French Finance Minister Francois Baroin announced the massive increase at a Group of Eight finance ministers’ meeting in Marseille.

The money will help the Arab states weather short-term economic instability.

“We are facing an historical transformational moment, and while there are downsides, there is enormous enthusiasm,” International Monetary Fund chief Christine Lagarde said.

Representatives from the four states were in Marseille to explain to donors and lenders how they planned to relaunch their economies and to hear what help they can expect from the world’s major economic powers.

Officials from Libya’s new government – whose fighters have taken control of most of their country but are still battling remnants of strongman Muammar Gadaff’s forces – were also in the southern French city as observers.

Libya is not yet a formal member of the Deauville Parternship – named after the French town that hosted the G8 meeting in May – but has been promised it will be added to the list soon.

Its transitional government got a boost yesterday when the IMF said it now formally recognises it, paving the way for the fledgling administration to benefit from the IMF’s financial help.

“The fund stands ready to help the authorities through technical assistance, policy advice, and financial support if requested, as they begin to rebuild Libya’s economy,” IMF chief Lagarde said.

“The new authorities will also need to quickly restore oil production to generate revenues, stabilise the currency, re-establish a payment system, introduce sound public financial management, and start reforms to foster a more inclusive and sustainable growth for the benefit of all Libyan citizens.” www.gulf-daily-news.com