Multilateral banks join forces to aid Arab nations

WASHINGTON: A group of powerful multilateral financial institutions are joining forces to support Arab hopes for a better economic future, the US and French governments announced Thursday.

The World Bank, the European Bank for Reconstruction and Development, the African Development Bank and the Islamic Development Bank are among the institutions that have pledged to have an "action plan" outlined by the end of May, the two countries said in a joint statement in Washington.

Egypt and Tunisia, where pro-democracy uprising have toppled entrenched regimes, are a primary focus of the plan, said the statement, issued following a closed-door meeting hosted by the World Bank.

Finance ministers "from a number of partner countries" and heads of international banks discussed how to work together to assist Middle East and North African countries in their moves toward more inclusive growth, they said.

The four development banks, the International Finance Corp, European Investment Bank and other institutions agreed to partner "to develop a joint action plan for aligning their investments toward a new vision to support the aspirations of citizens for inclusive and sustained growth," the statement said.

It noted that the action will be based on an economic assessment by the International Monetary Fund, and "early recommendations will be presented before the end of May."

French finance minister Christine Lagarde, earlier Thursday suggested that the EBRD would participate in financial aid for Egypt and Tunisia to help their economies recover from the revolutions.

Speaking before a meeting of finance chiefs of the Group of Seven advanced economies, Lagarde told reporters: "We will doubtlessly tackle the situation of the countries of the southern Mediterranean, and in particular Egypt and Tunisia."

"I hope that we can reexamine the role that will be played by the European Bank for Reconstruction and Development, to ensure that it can be available to participate in the growth and redevelopment of these economies."

France is this year's leader of the G7 and the Group of 20 advanced and emerging economies.