Civil Society Groups in the Arab region say Western financial aid plan could divert the Revolutions’ Economic and Social Justice Goals

Press Release by Arab NGO Network for Development and Counter Balance.

Beirut/Brussels – In a joint statement a group of 67 civil society organizations from across 12 Arab countries are raising concerns about the EU and US backed financial aid packages for post-revolutionary countries in their region on the grounds that it could damage the process of democratic transitions and divert the revolutions’ economic and social justice goals.

“The democratic change pursued by the peoples of the region is not served by increase in aid that comes tied with policy conditionality, further liberalisation of trade and investment, deregulation, and orthodox recipes that contributed to the injustices that Tunisian and Egyptian people faced”Kinda Mohamadieh, programme manager at the Arab NGO Network for Development. “Such conditionalities should not be re-enforced through various forms of partnerships and aid packages promoted in the name of democracy support. The path to development of each country should be decided by its own people, via constitutional processes and national dialogue.”

Caterina Amicucci, Counter Balance: “Western governments tend to confuse the transition to democracy with a transition to liberalisation because it serves their interests, not necessarily those of the people they pretend to support. The European Investment Bank for instance - who will be lending the biggest share of EU money - has been active in the region for 30 years without tangible development results for the people. It has been criticised for its lack of transparency and its focus on fossil fuel projects.”

Importantly, according to the statement released by the 67 groups, the international financial institutions now sponsoring the aid package have been systematically promoting the unjust economic models that led to the impoverishment and marginalization of many in North Africa and the Middle East – and against which the pro-democracy movements rose. For example, as late as September 2010, the IMF was still lauding Tunisia’s “sound macroeconomic management and structural reforms over the last decade” and was even calling for more of the same by “contain(ing) public spending on wages and food and fuel subsidies.” Those same economic models are now being promoted, as if nothing happened, via the conditionalities attached to the new aid package.

If the West really wants to support the democratic movements in the region, the 67 groups argue, it could start by helping with: completely eliminating policy conditionalities from aid addressed to support the peoples’ revolutions in the region, ensuring this support is directed to serve development priorities resulting from national participatory and democratic processes, assessing previous lending by development banks in the region, guaranteeing full transparency of any new aid, undertaking audits for debts taken on by formed dictators and cancellation of odious debt, and allowing for assessment and renegotiation of international trade and other economic commitments signed by past governments.

Notes for editors:

[1] The G8 group of most developed countries meeting in May this year called on the International Monetary Fund (IMF) and other multilateral development banks, mainly noting the European Investment Bank (EIB), the European Bank for Reconstruction and Development (EBRD), and the World Bank to deliver “support … to strengthen governance and bolster the business climate” in post-revolutionary North African and Middle Eastern countries. The G8 Summit announced that multilateral development banks could provide over $20bn for Egypt and Tunisia for 2011-2013. Along this, the G8 countries offered a package of “deep and comprehensive free trade agreements and investment” to accompany their efforts. The EU would provide an extra €1.24 billion to the foreseen €5.7 billion support to its southern and eastern neighbours. EC President Barroso noted that aid was not enough to respond to the socio-economic challenges in the EU's neighbourhood and that “we (the EU) need to do more to boost growth and jobs… push(ing) for faster free trade agreements, targeted concessions and smart investment facilities”.

[2] Out of €1.87bn lent by the EIB to Egypt between 2006 and 2010, 92% was directed at energy projects – and four-fifths of this to promote fossil fuels. Of the €1.8bn lent to Tunisia in the same period, half went to energy projects, and 10% was invested in infrastructure for transporting gas to Italy.