Arab central bankers: countries with unrest need support

Reuters, Thursday 15 Sep 2011

Unrest-hit nations may need help from the World Bank and IMF as growth slows in the region, say governors meeting in Qatar

Arab Spring

Arab countries hit by unrest may need to turn to financial support from international institutions such as the World Bank and the International Monetary Fund as growth slows in the region, central bank governors said at a meeting on Thursday.

Turmoil across the Middle East, which has toppled the rulers of Tunisia, Egypt and Libya, has also translated into slower economic growth while forcing richer governments to hand out billions in an effort to create jobs and counter rising living costs.

"They (Arab central bank governors) expressed their fears from an expected drop in growth rates this year," they said after meeting in Qatar's capital.

Yemen's central bank governor, who attended the meeting, said that the impoverished country's political crisis may cause the economy to shrink this year after eight months of popular unrest against President Ali Abdullah Saleh's 33-year rule.

"I don't know how much, we don't have such data from the real sectors so we can't assume, but it could be negative. It is difficult to tell without having such data for that," Central Bank Governor Mohamed Bin Humam told Reuters.

The International Monetary Fund forecast in April economic growth in Yemen, where some 40 percent of its 23 million people live on less than $2 per day, to slow to 3.4 percent in 2011.

The central bank governors also said they would offer support to each other.

"The governors expressed their support to all central banks in Arab countries that are witnessing political developments and transformations," they said.

Egypt's military rulers turned down an offer of $3 billion from the IMF in June, but is close to securing loan agreements with Saudi Arabia and the United Arab Emirates worth several billions of dollars. Another $500 million for Egypt is expected to come from the Arab Monetary Fund.

The IMF said this week it was ready to provide external financing to Libya or Egypt.

Arab finance ministers meeting in Abu Dhabi last week said their economies could withstand political upheaval and a global slowdown thanks to ample cash reserves and mutual support.  

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