Earmarked for the Arab Spring: Middle East turmoil takes priority for fund (Photo: Reuters)
The Arab Monetary Fund is unlikely to offer any funding assistance to the Eurozone because providing loans to unrest-hit countries across the Arab world has priority, Director General Jassim al-Mannai said on Sunday.
"There is a big need in Arab countries, a constant need, taking into account the Arab Spring," he told reporters on the sidelines of a meeting of regional bankers in the United Arab Emirates' capital.
"Also, oil prices may drop because of weak economic growth...I cannot see Arab countries could help Europe."
European Union leaders agreed at a summit in Brussels on Friday that euro zone states and other nations should provide up to 200 billion euros (US$270 billion) in bilateral loans to the International Monetary Fund to help it tackle the zone's debt crisis. They envisaged 50 billion euros of the total coming from non-euro countries, but it is not clear which nations would be willing to provide the money.
The 22-member AMF provided loans worth around $548 million to Jordan, Morocco and Yemen in 2010, the highest level of annual lending in the last 22 years, its annual report shows.
Egypt said last month it would receive financing worth $470 million from the AMF this year after its budget deficit ballooned in the wake of the February uprising that unseated president Hosni Mubarak.
The total value of loans extended by the AMF reached $6.1 billion at the end of 2010, while total assets stood at 3.1 billion Arab Accounting Dinars, or $14.5 billion.
In addition to going through the AMF, wealthy Gulf governments often extend international aid on a bilateral basis and could potentially do so to help Europe. But the governments have not so far pledged any fresh money to the IMF or euro zone.
Mannai also said the AMF did not expect any negative impact on trade between Arab countries and Europe due to the Eurozone debt crisis.
"Trade is going on. We cannot see a strong linkage of sovereign debt and trade between Europe and the Arab world. We should not expect any implications on trade," he said.
Although Europe is a big trading partner of the Arab world, many Arab countries have diversified their trade to other regions, he said.
Some 27 per cent of imports to Saudi Arabia, the largest Arab economy, came from the European Union in October, while the EU was the destination for 10 per cent of the kingdom's non-oil exports, official Saudi data show.