The G8 group of industrialised nations have offered more than $20bn in loans and aid to Tunisia and Egypt to support their transition to democracy.
The package will be offered through multilateral development banks including the World Bank, the IMF and the European Bank for Reconstruction and Development. The cash will be available between 2011-13, and the G8 has suggested that more will be available if the two countries continue on the path to democracy.
A statement issued by the G8 on 27 May said that the loans on offer would also be extended to other countries in the region “engaging in a transition towards free, democratic and tolerant societies”.
Both Egypt and Tunisia are in a difficult position, with economic activity coming to a halt as their try to overcome the impact of political instability and the loss of tourism revenue. Egypt has said that foreign direct investment has fallen to zero, depleting its foreign exchange reserves and many analysts think the country’s economy will barely growth in 2011.
At the same time demands to create jobs and pay higher salaries are increasing.
“We, members of the G8, strongly support the aspirations of the Arab Spring, as well as those of the Iranian people,” said an official communique from the G8. ” We hear the voice of the citizens, support their determination for equality and stand by their legitimate call for democratic, open societies and inclusive economic modernisation.”
The declaration from the G8 came following two days of meetings in Deauville, France, which also included representatives from Tunisia and Egypt.