Thursday, 19 May 2011
President Barack Obama will lay out the initiative in a long-awaited major speech sketching Washington’s response to the historic wave of change sweeping across the Middle East and North Africa. (File photo)
President Barack Obama of the United States is expected to unveil on Thursday a multi-billion dollar economic plan to spur and reward democratic change in the Arab world, modeled on the evolution of post-Soviet eastern Europe.
The comprehensive US scheme, initially targeting Egypt and Tunisia, will also serve as an incentive for other states currently rocked by “Arab Spring” turmoil, to embrace people power and turn toward democracy, officials said, according to Agence-France Presse.
Mr. Obama will lay out the initiative in a long-awaited major speech sketching Washington’s response to the historic wave of change sweeping across the Middle East and North Africa, at the State Department at 1540 GMT Thursday.
The comprehensive US scheme, initially targeting Egypt and Tunisia, will also serve as an incentive for other states currently rocked by “Arab Spring” turmoil, to embrace people power and turn toward democracy, officials said, according to Agence-France Presse.
Mr. Obama will lay out the initiative in a long-awaited major speech sketching Washington’s response to the historic wave of change sweeping across the Middle East and North Africa, at the State Department at 1540 GMT Thursday.
Senior advisers to President Obama, previewing parts of his speech, said on Wednesday the United States would offer debt relief totaling roughly $1 billion “over a few years” to Egypt through a debt swap mechanism that would invest the money to boost youth employment and support entrepreneurs, according to Reuters.
Washington would also loan or guarantee loans up to a total of $1 billion through the Overseas Private Investment Corp (OPIC) for Egypt to finance infrastructure development and boost jobs, the officials told reporters on a conference call.
The New York Times reported Thursday that Mr. Obama’s economic aid parallels a package of measures being prepared by the European Union. The union plans to mobilize more than 2 billion euros ($2.8 billion) in investment and development money for Egypt, Tunisia, Libya, and other Middle Eastern countries, drawing on the resources of the European Investment Bank and the European Bank for Reconstruction and Development.
“We’re trying to pull together a kind of strategic approach,” Catherine Ashton, the European Union’s chief foreign policy official, said in an interview with the Times on Wednesday. “This is our neighborhood.”
The European aid will focus both on the immediate need for cash and other support—a team of monitors recently went to Tunisia to help officials prepare for elections—as well as longer-term economic development.
Several billion dollars in additional financing could come from multilateral development banks as well.
The Obama administration would also seek to foster trade and economic development throughout the region and encourage private sector investment, the officials said.
“We think these initiatives will help Egypt and Tunisia as they undertake the twin challenges of economic transformation and democratization,” one official said.
The officials dodged a question on whether the debt relief package was enough.
“Egypt has, I think, a very good prospect of accessing private capital markets, and that’s important to Egypt’s future economic vibrancy, and that’s something that we know economic leaders in Egypt want to reinforce,” one official said when asked why the country’s full debt was not canceled, as reported by Reuters. (Egypt’s external debt was rescheduled earlier this year and is not put at $32 billion, or 14.5 percent of the GDP.)
In his widely anticipated speech on Thursday, Mr. Obama aims to present a coherent approach for dealing with unprecedented political upheaval that has swept the region and upended decades of US policy.
Part of that approach will include boosting economic fundamentals to spur democratic reform.
“We ... know from our study of the past that successful transitions to democracy depend in part on strong foundations for prosperity, and that reinforcing economic growth is an important way of reinforcing a democratic transition,” one official said.
The United States would form “Egyptian-American and Tunisian-American Enterprise Funds” to promote investment from the private sector, the White House said in a statement laying out some of its proposals.
Washington would also work with allies to reorient the European Bank for Reconstruction and Development to support the Middle East and North Africa region just as it helped countries in Central and Eastern Europe.
US officials are concerned about the economic outlook in Egypt and Tunisia after democratic revolutions swept out long-ruling autocratic leaders.
Growth forecasts have been revised downward to 1 percent in Egypt and GDP growth in Tunisia is expected to be close to zero this year, the White House said.
The White House hopes to send a message to other countries in the region that they, too, could benefit from economic backing if they pursue a democratic path.
“Part of the purpose of this economic program ... is to reinforce not only positive change in Egypt and Tunisia, but a positive model that can empower and incentivize democratic change and economic reform in other parts of the region,” one official said.
US officials said they would also seek to support better economic management in transitioning nations, try to improve economic stability by easing deficits and spurring growth and would support economic modernization and reform.
Trade will also be used as a lever, in an attempt to help nations help themselves.
“If you take out oil exports, (in) the countries of this region, 400 million people export about the same amount of goods as Switzerland does, with eight million people,” AFP quoted another senior official as saying.
The rationale of President Obama’s Arab plan appears to be an attempt to tackle the economic deprivation and miserable prospects of vast swathes of Arab population, which, along with repression of basic rights, triggered a wildfire of protests.
President Obama will seek Thursday to sketch a plausible policy response to the sudden, complex and often contradictory demands thrown up by revolts that started in Tunisia, and spread to nations including Egypt, Syria, Libya and Yemen.
But it was unclear whether the president would use the speech to re-launch his stalled drive for Israeli-Palestinian peace, according to AFP.
Making the situation even more complicated for the US—which has traditionally been Israel’s ward, and often its only big-power supporter—is the insistence of Israeli Prime Minister Benjamin Netanyahu on continuing illegal settlements in the occupied territories, claiming exclusive sovereignty of Jerusalem, and keeping an Israeli military presence along the Jordan River. None of these points are acceptable to Palestinians.
The breathtaking speed, historical scope and complexity of change sweeping the region caught Washington, like the leaders it challenged, unawares.
For many Americans, the most significant foreign event of the year is the US killing of Al Qaeda leader Osama Bin Laden in Pakistan, a fact pointing to a key domestic audience for Thursday’s speech.
Mr. Obama is also expected to have harsh words for US foes Syria and Iran. Although Mr. Obama signed an executive order on Wednesday imposing sanctions on Syrian President Bashar al-Assad and key aides, he has yet to call for Mr. Assad’s resignation. Perhaps that might change with Mr. Obama’s speech today.
(Abeer Tayel, an editor at Al Arabiya, can be reached at: abeer.tayel@mbc.net)
Washington would also loan or guarantee loans up to a total of $1 billion through the Overseas Private Investment Corp (OPIC) for Egypt to finance infrastructure development and boost jobs, the officials told reporters on a conference call.
The New York Times reported Thursday that Mr. Obama’s economic aid parallels a package of measures being prepared by the European Union. The union plans to mobilize more than 2 billion euros ($2.8 billion) in investment and development money for Egypt, Tunisia, Libya, and other Middle Eastern countries, drawing on the resources of the European Investment Bank and the European Bank for Reconstruction and Development.
“We’re trying to pull together a kind of strategic approach,” Catherine Ashton, the European Union’s chief foreign policy official, said in an interview with the Times on Wednesday. “This is our neighborhood.”
The European aid will focus both on the immediate need for cash and other support—a team of monitors recently went to Tunisia to help officials prepare for elections—as well as longer-term economic development.
Several billion dollars in additional financing could come from multilateral development banks as well.
The Obama administration would also seek to foster trade and economic development throughout the region and encourage private sector investment, the officials said.
“We think these initiatives will help Egypt and Tunisia as they undertake the twin challenges of economic transformation and democratization,” one official said.
The officials dodged a question on whether the debt relief package was enough.
“Egypt has, I think, a very good prospect of accessing private capital markets, and that’s important to Egypt’s future economic vibrancy, and that’s something that we know economic leaders in Egypt want to reinforce,” one official said when asked why the country’s full debt was not canceled, as reported by Reuters. (Egypt’s external debt was rescheduled earlier this year and is not put at $32 billion, or 14.5 percent of the GDP.)
In his widely anticipated speech on Thursday, Mr. Obama aims to present a coherent approach for dealing with unprecedented political upheaval that has swept the region and upended decades of US policy.
Part of that approach will include boosting economic fundamentals to spur democratic reform.
“We ... know from our study of the past that successful transitions to democracy depend in part on strong foundations for prosperity, and that reinforcing economic growth is an important way of reinforcing a democratic transition,” one official said.
The United States would form “Egyptian-American and Tunisian-American Enterprise Funds” to promote investment from the private sector, the White House said in a statement laying out some of its proposals.
Washington would also work with allies to reorient the European Bank for Reconstruction and Development to support the Middle East and North Africa region just as it helped countries in Central and Eastern Europe.
US officials are concerned about the economic outlook in Egypt and Tunisia after democratic revolutions swept out long-ruling autocratic leaders.
Growth forecasts have been revised downward to 1 percent in Egypt and GDP growth in Tunisia is expected to be close to zero this year, the White House said.
The White House hopes to send a message to other countries in the region that they, too, could benefit from economic backing if they pursue a democratic path.
“Part of the purpose of this economic program ... is to reinforce not only positive change in Egypt and Tunisia, but a positive model that can empower and incentivize democratic change and economic reform in other parts of the region,” one official said.
US officials said they would also seek to support better economic management in transitioning nations, try to improve economic stability by easing deficits and spurring growth and would support economic modernization and reform.
Trade will also be used as a lever, in an attempt to help nations help themselves.
“If you take out oil exports, (in) the countries of this region, 400 million people export about the same amount of goods as Switzerland does, with eight million people,” AFP quoted another senior official as saying.
The rationale of President Obama’s Arab plan appears to be an attempt to tackle the economic deprivation and miserable prospects of vast swathes of Arab population, which, along with repression of basic rights, triggered a wildfire of protests.
President Obama will seek Thursday to sketch a plausible policy response to the sudden, complex and often contradictory demands thrown up by revolts that started in Tunisia, and spread to nations including Egypt, Syria, Libya and Yemen.
But it was unclear whether the president would use the speech to re-launch his stalled drive for Israeli-Palestinian peace, according to AFP.
Making the situation even more complicated for the US—which has traditionally been Israel’s ward, and often its only big-power supporter—is the insistence of Israeli Prime Minister Benjamin Netanyahu on continuing illegal settlements in the occupied territories, claiming exclusive sovereignty of Jerusalem, and keeping an Israeli military presence along the Jordan River. None of these points are acceptable to Palestinians.
The breathtaking speed, historical scope and complexity of change sweeping the region caught Washington, like the leaders it challenged, unawares.
For many Americans, the most significant foreign event of the year is the US killing of Al Qaeda leader Osama Bin Laden in Pakistan, a fact pointing to a key domestic audience for Thursday’s speech.
Mr. Obama is also expected to have harsh words for US foes Syria and Iran. Although Mr. Obama signed an executive order on Wednesday imposing sanctions on Syrian President Bashar al-Assad and key aides, he has yet to call for Mr. Assad’s resignation. Perhaps that might change with Mr. Obama’s speech today.
(Abeer Tayel, an editor at Al Arabiya, can be reached at: abeer.tayel@mbc.net)
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