A coalition of Middle East countries and multilateral institutions, including the International Monetary Fund (IMF) and the World Bank, agreed to establish an informal co-ordination group to provide needed financial support for the economic recovery of Middle East countries devastated by conflict – with a focus on Syria.
Members of the Arab Coordination Group (ACG) will combine their efforts to gather financial support and identify the institution-building priorities along with gaps in policies needed to create lasting recovery in conflict areas, it was announced on Sunday, on the sidelines of a conference for emerging market economies in AlUla held by Saudi Arabia's Finance Ministry and the IMF.
Syrian Foreign Minister Asaad Al Shibani, who was appointed to his position in December, attended a high-level meeting at the event.
“The IMF, World Bank, the Arab Coordination Group and countries of the region underscored their readiness to work together and complement each other's efforts,” a joint statement made by IMF managing director Kristalina Georgieva, and Saudi Arabian Finance Minister Mohammed Al Jadaan, said.
“They emphasised the importance of strengthening co-ordination to support the recovery of these countries as the negative spillovers would impact all,” it added.
The next level of discussions will be continued at the IMF and World Bank Spring Meetings set for April 25 to 27 in Washington.
Three-fold mission
While countries such as Saudi Arabia, the UAE, Qatar and Iran along with groups such as ACG have individually helped regional conflict countries like Syria in their economic and infrastructure rebuilding efforts, Sunday's agreement hopes to establish several parameters that will measure and deliver support that is curated to the different needs of each economically struggling nation.
The first parameter identified the need to create a continuous diagnostic, to accurately assess a country's humanitarian and reconstruction needs such as institution building priorities, gaps in policies and exact financing needs.
The second is more rapidly scaling current, but also future, IMF and World Bank capacity development required to support core functions of fiscal, monetary and banking institutions.
Gathering financial capital from the international community to fund reform programmes in areas such as infrastructure reconstruction and humanitarian aid is the third mission of the ACG.
Garnering international financial support for conflict economies could become more difficult as the US, the world's largest donor of aid – accounting for 41.8 per cent of global aid last year, according to the UN Office for the Co-ordination of Humanitarian Affairs – is changing its aid policies.
Just after US President Donald Trump's inauguration last month, his administration issued an executive order to freeze aid of its US Agency for International Development (USAID).
The government agency operates in key Middle East locations including Egypt, Iraq, Jordan, Lebanon, Syria, Gaza and the occupied West Bank. This has had a ripple effect on regional countries relying on this aid to support the functionality of their economies and to support its marginalised groups such as refugees.
USAID provided $704 million in humanitarian assistance to Egypt last year, with $135 million spent on Iraq, and almost $1 billion for the West Bank and Gaza.
This aid is expected to come to a sudden halt with the new US measures, especially as Mr Trump in early February suggested that the US would “take over” the Gaza Strip and relocate its roughly two million Palestinians living there to countries such as Egypt and Jordan.
Increasing support
Other Mena countries are also looking to support conflict-burdened economies in the region.
Egypt is seeking to lead an Islamic summit in late February to counter Mr Trump's Gaza proposal and gain support from international donors and regional stakeholders for the reconstruction of the beleaguered land, sources told The National last week. Saudi Arabia and Qatar were also involved in the gathering that is expected to take place either in the kingdom or Egypt, they added.
Saudi Arabia and the UAE are among the top 10 global funders, according to UNOCHA, contributing 3.6 per cent and 2.3 per cent of global funding respectively last year.
