Bahrain publicly applied to be the site of a new regional bank at the Middle East/North Africa Economic Summit in Casablanca on 30 October- 1 November. Egypt, Israel and Jordan have also agreed to set up a separate joint investment bank for the region, Israeli Foreign Affairs Minister Shimon Peres said at the conference, which was attended by about 1,000 business people and 40 government leaders (see pages 6 and 7).
‘We would wish to be considered (to host) the bank for reconstruction and development,’ Bahrain’s Foreign Affairs Minister Sheikh Mohammad Bin Mubarak Bin Hamad al-Khalifah said in a speech to a plenary session on 31 October. Al-Khalifah was speaking after US Treasury undersecretary Lawrence Summers said America backed the plan for the bank. ‘A development bank can respond to this region’s special needs – for integrated infrastructure, for allocation of water, for attracting visitors from around the world and for reduced barriers to commerce.
‘The bank must be structured so that it can make a difference as soon as possible…and have extensive reliance on co-financing,’ Summers said. ‘This means a staff and structure sensibly commensurate with its activities and lending to projects with a market rate of return.’
Summers said he anticipated that the majority of the new bank would be owned by countries outside the Middle East. ‘Any discussion of dollar figures is premature,’ he added. US Secretary of State Warren Christopher said in an opening address to the conference that a Middle East and North Africa bank for co-operation and development could ‘serve as a financing mechanism for viable regional projects’.
Egyptian Public Enterprise Sector Minister Atef Obeid had earlier called for a bank with a base capital of $2,500 million with a further $7,500 million coming from other institutions. Obeid said that projects worth an estimated $25,000 million-30,000 million had been presented to the conference. These include schemes worth more than $18,000 million in Jordan alone (see Jordan). Egyptian Foreign Affairs Minister Amr Moussa said that his government supported the plan for the bank in a speech in the opening session.
Other leading figures supporting the idea of the bank included Turkish Prime Minister Tansu Ciller who said Ankara was ready to participate in the bank. President of the European Commission Jacques Delors said the bank would be the first Arab-Israeli co-operation initiative. ‘This bank, whatever its final configuration, can become a powerful force for regional integration,’ he said.
Senior figures who failed to express an opinion about the plan for a bank included German Foreign Affairs Minister Klaus Kinkel who referred to the leading role the EU had played in helping finance development in the region. Russian Foreign Affairs Minister Andrey Kozyrev and Chinese deputy foreign affairs minister Tian Zengpei also failed to mention the bank in their speeches.
The only public statement apparently hostile to the idea came in a speech by Saudi Arabian Commerce Minister Sulaiman Abdel-Aziz al-Sulaiman, leader of the Saudi delegation to the conference. He said the kingdom had contributed financially to a host of development projects in the region. ‘We are convinced that the development process in the Middle East and North Africa is not really a question of a lack of institutions or mechanisms,’ he said.
‘What is really needed is to evolve a sound and adequate economic policy.’ This should be done ‘without the need for establishing new administrative institutions which would waste time and effort,’ Al-Sulaiman added.
Bankers at the conference expressed support for the proposed institution. Despite the mixed reception for the proposal, analysts say the plan to set up the bank will probably go ahead in view of the strong support from the US.
Israeli Foreign Affairs Minister Shimon Peres told reporters on 1 November that the new private bank was separate from the proposed regional institution. He said it would be the first joint bank between Israel and Arab nations.