Financialisation Of Development FinanceUsing: PPP Vs Arab Spring Countries

Entareyehirungu · 2013-09-03T15:34:29+00:00

How Development Banks are Using PPP To Carve up the Arab Spring Countries A new report takes a critical look at the engagement of European development banks in Egypt after the popular uprisings in the Middle East and North African region. This article appeared originally on the Counter Balance blog and has been shortened and slightly edited. Remember the Arab Spring, the wave of popular revolts that hit several Arab countries in 2011. They initially resulted in the ousting of cruel dictators and brought about impressive political changes. Following these events, the European Union decided to change its approach to the region and to channel in more resources from international financial institutions (IFIs) such as the European Investment Bank, the European Bank for Reconstruction and Development and the International Monetary Foundation. The IFIs had longstanding relationships with the Arab countries. When a new wind started blowing they were willing to change their narrative but not necessarily their methods. The positive aura of change might have left most of the Arab countries but the IFIs have not. We think that the Arab Spring is worth an evaluation of the EUs engagement in the region, and tracking the records of development banks in the Middle East should be a key priority. The role of development banks Our latest report the great Middle East beanfeast is a first attempt in that regard. Anders Lustgarten, the author of the report, investigates the role of the development banks in Egypt and how they responded to the Arab Spring. The report reads as a fierce critique to the policies of liberalisation and privatisation promoted by those institutions in Egypt and in the MENA region (Middle East and North Africa). It also targets the use of Public Private Partnerships (PPPs) and what we call the Financialisation Of Development Finance. These development banks betray the spirit of the Arab Spring by the financial mechanisms they use, Lustgarten argues. While the slogan of the Arab Spring was bread, freedom and social justice, the policies and financial mechanisms used by the development banks mainly bring about the opposite. PPPs, one of the priorities of the European Investment Bank when it is active in the region for example, are a tool to shift public assets into private hands. The list of privatisations under the Mubarak regime is impressive. It has been much contested and successfully challenged in court. Extensive recourse to private equity and the use of financial intermediaries typically benefit a small elite and subject the economy increasingly to the whims of the financial market. The increasing role of the private sector decreases the ownership of civil society and undermines the ability of the state to redistribute wealth. In brief, these were not exactly the aspirations of the Tahrir demonstrators. Before and after the Arab Spring - a different approach? Moreover, the author shows how the EIB and the World Bank were deeply entangled with the pre-Arab Spring dictatorships. The EIB has a significant track record of supporting the Mubarak regime for instance, lending nearly 4 billion to Egypt in the decade preceding the Arab Spring. In the whole MENA region, the EIB invested 15.5 billion in the same decade, twice as much as in any other region outside Europe. So when those institutions now refer to democratic development of the region, it must be remembered that they loaned more under the old dictators regimes than to any other regime, and they used the same justifications to do so than as they use now. For instance, a 2004 joint financial package for the MENA region between the EIB, World Bank and EU Commission claimed that it will be used to lend support to institutional and economic reform, human rights and democracy projects, the fight against poverty and education and training. Source: Click HERE!

Thread starter Entareyehirungu
Start date Sep 3, 2013

Entareyehirungu

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Financialisation Of Development FinanceUsing: PPP Vs Arab Spring Countries

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