[ 2011-09-11 ]

G8 pledges billions for Arab Spring as IMF recognises Libya
MARSEILLE, France (AFP) - Arab states that ousted
their dictators got a financial shot in the arm
Saturday with promises of tens of billion of
dollars to help their rocky transformation into
modern democracies.

G8 rich 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, where close by up
to 1,000 demonstrators gathered to protest against
austerity measures.

The money is earmarked to support reform and help
new governments weather short-term economic
instability in the wake of popular uprisings that
began in Tunisia and toppled its strongman leader
before spreading to Egypt and Libya.

"We are facing an historical transformational
moment, and while there are downsides, there is
enormous enthusiasm," International Monetary Fund
chief Christine Lagarde told reporters here.

Jordan and Morocco, which have not faced popular
revolutions but whose kings have promised steps
towards deeper democracy, joined the so-called
Deauville Partnership after the initial members
Egypt and Tunisia.

Representatives from the four states were in
Marseille on Saturday 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 Moamer Kadhafi'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 Saturday
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."

IMF staff are ready to travel to Libya for an
initial fact-finding mission as soon as security
conditions allow, Lagarde said.

This week both Egypt and Tunisia -- which are due
to hold elections before the end of the year --
said they had so far received little or nothing
despite the grand promises made by the G8 in
Deauville.

Tunisia's Finance Minister Jalloul Ayed told the
Financial Times that his country had received not
a penny, while his Egyptian counterpart said only
$500 million had come through.

"We understand this frustration," an official from
a major financial institution said Saturday in
Marseille. But the donors and lenders "need to
know who (in the new Arab administrations) they
are talking to."

France's Baroin said that while no deadline for
delivering the financial aid had been drawn up, it
should be released "as soon as possible."

"These are not just words," he said. "This is
concrete, it will be fast."

Officials from Turkey, Saudi Arabia, Kuwait, Qatar
and the United Arab Emirates were also at the
meeting in Marseille.

Before turning their attention to the Arab Spring,
the finance ministers from Britain, Canada,
France, Germany, Italy, Japan, and the United
States on Friday vowed tough measures Friday to
get the global economy back on track.

Source - AFP

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