Wishful thinking

Al-Ahram Weekly

Wishful thinking

Arab Spring countries must know that G8 countries will not be handing out money to assist their transition into flourishing democracies, writes Ezzat Ibrahim in Washington DC
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The G8 summit will meet in Camp David on Sunday and Monday to discuss world issues, including assistance to Arab Spring states one year after the Deauville summit in France

The G8 summit will meet in Camp David on 18-19 May to discuss world issues, including assistance to Arab Spring states one year after the Deauville summit in France put down a roadmap for providing support. The Deauville Plan did not amount to much in helping countries struggling with the transition from dictatorship to the rule of law, such as Egypt, Tunisia and Libya.

This weekend, leaders of major industrial countries will converge at the famous resort in Maryland to discuss other key issues, such as combating world terrorism, the future of energy, political change in the Middle East, especially speculation about Egypt’s presidential race and the political process in Libya. The summit will also review ideas about how to activate the Deauville Plan, although it does not seem there will be any real progress on this front. Only “symbolic action” will be on offer.

At first, G8 members considered a proposal by the foreign ministers of Egypt, Tunisia, Jordan and Morocco — whose countries are target recipients of assistance — that they should attend the summit in Camp David, but G8 members demurred. This weekend, the US is promoting an action plan among G8 members that does not adopt any clear financial obligations and overlooks the highly publicised, albeit misconstrued, Deauville pledge by the G8 of $40 billion to Arab Spring states and others in the region.

In reality, the pledge was never translated into action because it was not included in the Deauville Declaration, and G8 members did not intend it be in the form of direct aid but more as technical measures and facilitation. For example, offering loans from the European Bank for Construction and Development, in which Egypt is a contributor but has not received any money in return. G8 countries are urging member countries to make amendments to the bank’s regulations to facilitate loans to Egypt, Tunisia, Jordan and Morocco. It seems that Libya is uninterested in the issue because it has a large financial surplus from its oil revenues and foreign investments.

The Deauville Plan contains three aspects. First, financial issues, which includes deciding on a mechanism to inform regional states about ways of securing long-term loan guarantees through world financial institutions, such as the World Bank and International Monetary Fund and bilateral relations. Also, achieving transparency and accountability criteria in nascent democracies in the region.

Second, good governance and adopting the criteria of the Organisation for Security and Cooperation in Europe on transparency, human rights and freedom of information.

Third, trade and activating tariff regulations, eliminating trade obstacles that require agreements, and simplifying tariff rules and regulations to serve the economies of concerned countries.

Several meetings were held to discuss the Deauville Declaration over the past year, including two on good governance at the beginning of 2012 and one on trade in March in Jordan. The meetings discussed economic and financial consultations and facilitation, but not actual monetary aid. A source based in Washington said that the most that G8 members have offered in those meetings is to establish a trust fund to finance projects for capacity building and technical assistance — both of which are already provided by countries like Japan and EU states to countries such as Egypt and Tunisia.

The source added that talks on actual financial assistance is not possible because G8 states said there are already initiatives in place by institutions such as the World Bank and other development banks that can be used in the future. Accordingly, the outcome at Deauville was how to benefit from previous and existing initiatives but under US leadership, instead of France.

Another source agrees that the meetings since Deauville were of little worth, adding that North African states have strong bonds with European G8 members France, Italy, German and the UK, and therefore they did not strongly criticise Deauville or France’s G8 presidency in order to maintain good bilateral ties, since they could be more beneficial in other aspects.

Peter Howard, coordinator for the Deauville Partnership in the US State Department’s Bureau of Near East Affairs, said at the Stimson Centre last month that the US will present a vision that integrates economic outlooks and good governance in transitioning states in the Middle East, by using the organisational structure of the G8, which has a clear mechanism that brings together ministers of finance and foreign affairs. Howard noted that Washington’s vision aims to achieve four main goals through the Deauville Partnership: namely, economic stability; creating jobs; some degree of economic integration by supporting trade; and strengthening political participation in target countries through more openness and freedom to form political parties and protecting basic rights.

The US “action plan” in Camp David is not unlike US policies in its bilateral relationship with each of these countries, which makes it more likely that Camp David will not activate Deauville or anything else, but will focus on confirming the general framework, working through large financial institutions to achieve some demands, without real commitments by major capitals for the time being.

According to Howard, the US plan will focus on supporting “dialogue” between G8 and transitioning states, then attempting to take procedural steps about what should be done in talks between G8 ministers of finance and foreign affairs with their counterparts from Arab Spring countries.

This all leads to the same result: burying the sensational declarations at Deauville at Camp David, and an end to publicity in the media about the intentions of the G8 summit, in which the Arab media happily participated one year ago. A reality check should take into account all the complications and problems in major industrial states that have competing interests in the Arab region and adopt agendas that on the surface appear sympathetic and supportive of transformations in regional countries.

However, the balance of power on the ground — most prominently the future of Egypt’s presidency — and the actual financial cost, in light of unstable global finances and the global economy, require countries like Egypt and Tunisia to lower their expectations about what G8 countries can or will offer, because they will not receive direct financial aid from these industrial states. The only issue on the table now is how best to benefit from existing financial structures and initiatives of the major financial institutions, which appears to be all the Deauville Summit last year was promoting.

Posted on May 20, 2012, in Arab Spring, Morocco News and tagged , , . Bookmark the permalink. 1 Comment.

  1. The reality of a sick Europe and G8 with it, are gradually surfacing and joining the fall of the aftermath of the Soviet Union turning into a Russian federation of chaotic mini-states.
    It shows the demise of Western economic power and the hypocrisy it generates through its empty rhetoric. The helplessness of the West is becoming apparent not only in the failure to deal with Syria but also the appeasement shown at this meeting in accommodating Iran, and rightly so, to develop its own nuclear energy. They unanimously gave the ‘Fingers up’ to the Arab/Amazigh Spring and Deauville hopes.
    But, it remains that the future is within the BRICS and other emerging nations within North Africa/Africa, the Middle East, Asia and South America and not the Old bankrupt European Continent and North America.
    Dr Ben Kirat

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