GCC states have restated their objections to the Middle East development bank, plans for which are due to be announced at the Amman economic summit at the end of October. The US, which is strongly in favour of the institution, has been lobbying hard to broaden support, and says the differences which still persist will not prevent a positive announcement in Jordan. But the scope of the institution is likely to be restricted without the strategic and financial backing of key Gulf states.
‘GCC members have on more than one occasion expressed their rejection of the idea of creating a Middle East development bank,’ said Abdullah al-Quwaiz, assistant general secretary for economic affairs in the GCC secretariat. The official Emirates news agency WAM, which carried the remarks, also reported him as saying the question of setting up such an institution ‘is premature’.
GCC states have opposed the plans because they say there are enough Arab and multilateral agencies already disbursing funds to Arab states, and the planned regional development bank would mainly benefit Israel. Quwaiz said GCC member states taking in part in the summit ‘believe that creating the institutions of the framework of peace before the completion of the peace process is illogical’.
The US, supported by, among others, Israel, Jordan, Egypt and the Palestinians, says the bank plans are still on track. ‘There have certainly been differences of opinion but my understanding as of today is that there will be a positive announcement with respect to the bank at the summit at the end of the month,’ the US ambassador to Jordan, Wesley Egan, told reporters on 16 October. However, he said the announcement would only be the first step towards setting up the bank, which eventually aims to have capital of $5,000 million.
‘It’s not an institution that comes into being the next day. It’s an institution that will have to be capitalised to about $1,250 million, and it’s going to be a process whereby at least a certain number of subscribers will have to become formal members of the bank,’ he said. ‘That is a process that will take some time; it could take anywhere from 12 to 24 months.’
A majority of European states remain opposed to the institution, and would prefer to see an organisation that is able to channel existing funds more efficiently, rather than a bank that will itself become a lender. However, the US has been working to persuade European states to join the project. In early October, President Clinton called Germany’s Chancellor Helmut Kohl to win him over to the proposals.