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G-8 wants banks to help M-E transition to democracy.

DOW JONES MARSEILLES THE Group of Eight industrialised and developing nations is set to call on multilateral development banks and regional funds to broaden the scope of their cooperation to help Arab Spring countries make the transition to democracy and weather short-term economic instability, a draft statement of the G-8 said.

G-8 finance ministers, who are meeting in Marseilles in southern France on Saturday, will also review the $20 billion support pledge made in May at a meeting in Deauville, a resort town in northern France.

The G-8 will urge the European Bank For Reconstruction and Development to quickly set up a "transitional facility" to allow work to take place rapidly on the ground, the draft statement said.

The EBRD, which has provided financial and technical assistance to central and eastern European countries to move to democracy and a market- based economy 10 years ago, has recently seen its geographic mandate extended to the Middle East region.

"We call on the multilateral development banks and regional development funds to further improve their coordination, especially at the country level, and enhance their support to meet the challenges faced by partnership countries," the draft said.

After ousting autocratic leaders who had been in place for decades, countries like Egypt and Tunisia are facing a drop in tourism revenues due to the instability created by recent upheavals in the region, and which is likely to translate into balance of payment problems.

The G-8 draft said recent events in the region "have challenged macroeconomic stability in the near term", with some countries experiencing a drop in economic activity, tourism and investment flows, while also suffering from high oil and food prices.

Since the Deauville gathering, the partnership has been extended to Jordan and Tunisia with Kuwait, Qatar, Saudi Arabia, Turkey and the UAE joining the framework "in supporting the countries engaged in political and economic transformation," according to the draft statement.

The G-8 draft statement said the group will provide an update on the $20 billion funding pledge made by international financial institutions in Deauville, without giving further details, as that part of the statement is still up for discussion.

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Publication:Qatar Tribune (Doha, Qatar)
Date:Sep 9, 2011
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