The World Bank’s lending commitments to Middle East and North African states fell by 15 per cent to $979 million in the fiscal year ending 30 June 1995. The International Bank for Reconstruction & Development accounted for most of the $979 million worth of commitments made in 1995. Lending by the International Development Association, which offers soft loans, accounted for only 5 per cent of the total at $53 million, sharply down on a year earlier.

An area of increased activity in the region during 1995 was in the World Bank’s guarantee scheme, which provides partial risk coverage in the case of governments failing to perform on sovereign contractual obligations. ‘We see this as a natural growth area for leveraging the private sector and giving non-commercial risk comfort,’ says Geoffrey Lamb, the World Bank’s London representative.

The most recent recipient of a World Bank guarantee in the Middle East was Jordan’s Telecommunications Corporation, which launched a $50 million bond in September. The principal payments were covered by a World Bank guarantee. Other countries where projects are being considered for World Bank guarantees or where projects have already been approved are in Algeria, Lebanon, Morocco and Pakistan (MEED 15:9:95).