The World Bank stepped up its lending to the Middle East in the year to 30 June 1996 with new loan commitments worth $1,655 million, compared to $999 million the year before. Algeria and Morocco were the biggest beneficiaries, while Yemen was promised an unprecedented $166 million in soft loans.
‘The last year has been reasonably successful thanks to the emphasis by the bank and our partners in the region on implementation issues,’ Kemal Dervis, the bank’s vicepresident for the Middle East & North Africa, said in a statement issued on 19 July. The bank disbursed $1,500 million to regional states in its 1995/96 fiscal year, compared to $1,200 million the year before.
‘However, this is only a start given the region’s needs, especially in infrastructure improvement, water scarcity alleviation and employment generation,’ he added. ‘Much more has yet to be done to accelerate growth and help increase investments.’
The total figures for lending by the World Bank group include loans at market rates by the International Bank for Reconstruction & Development (IBRD) and concessionary loans by the International Development Association (IDA).
Morocco received $540 million and Egypt $428 million in market-rate IBRD loans.
Yemen received $166 million in soft IDA loans and Egypt $152 million, of which $120 million will go to the Social Fund, set up to offset the effects of structural adjustment.
The bank lent $60 million to the West Bank and Gaza for job-creation projects.
The largest single portion of the new loans, just under $410 million, will go towards restructuring the financial sectors of recipient states. Another $300 million, defined as multi-sector loans, is to help with structural adjustment policies.
Abdallah Bouhabid, an adviser to Dervis, said more money had been available than usual for IDA lending, to the benefit of Egypt and Yemen. ‘Usually we don’t have more than $150 million for IDA for our region.’
He does not see any Arab states reducing their reliance on World Bank loans in the next few years, with the possible exception of Tunisia. ‘Tunisia is in good shape to get money from the commercial markets at good rates.’