The head of the African Development Bank has issued a tough demand to rich countries to open up their markets to support beleaguered Arab Spring nations amid growing doubts over the G8’s commitment to helping North Africa.
AfDB president Donald Kaberuka said that the international community must step up its efforts to help the region through a “combination of instruments” including increased European market access to North African goods.
His call follows pledges by G8 leading industrial nations of more than $20 billion in aid to Tunisia and Egypt at their May summit in Deauville, France.
“They could accelerate opening markets in Europe for privileged treatment [of North African goods] - it’s absolutely important,” Kaberuka told Emerging Markets.
“As one leader put it ‘it is maybe better to take the goods than to take the people.’ So I think trade opportunities, direct support and help with what is North Africa’s most important problem – to stimulate growth which creates jobs.”
His comments come a week after the Africa Progress Panel, a panel of experts and former statesman chaired by ex-UN secretary-general Kofi Annan, called for “concrete action” on regional and global trade integration. “The G8 can and must work to build momentum.”
G8 nations are struggling with large public debts, calling into question their ability to disburse large sums in foreign aid. Emerging Markets understands that countries led by the UK pushed for greater access to EU agricultural markets to farming exporters in Tunisia and Morocco.
However diplomats said the move was blocked by France and Italy who feared negative impacts on their domestic farming industry and implications for the large agriculture subsidies their farmers enjoy.
“Europe needs a big offer to support the Arab revolutions, but there is no consensus,” a senior north European diplomat in the region said on condition of anonymity.
“France and others are blocking an opening on agriculture, but the southerners mostly don’t want to spend big to underwrite southern Mediterranean economies – even if they are shouting about what a hot issue migration has become and how we need to do something.
“The bottom line is that there is no EU policy, only soundbites on funding commitments.”
One British official added: “The UK is foursquare behind access to markets”. Last night the UK Foreign Office reissued comments by Foreign Secretary William Hague made before Deauville that the EU “must respond by opening our markets”.
At Deauville G8 leaders pledged to “stand ready” to offer additional support through, inter alia, improved mutual market access opportunities to encourage integration into the global economy through increased trade and inward investment in the region
Kaberuka acknowledged scepticism about whether the G8’s pledges would be fulfilled, especially in light of the group’s failure to make good on its 2005 Gleneagles commitments. Despite an overall increase in the total volume of aid delivered to Africa, only 62% of its pledges six years ago have been delivered.
“It is important that we support reforms in North Africa. Unsuccessful transitions [to democracy] in North Africa are no good for Europe and clearly unmanageable migrant flows could be a problem [for Europe],” he said.
“It is good for the African region, good for the Arab region and it is certainly good for Europe. It’s in Europe’s own interests to ensure that there is prosperity and a return to rapid growth in North Africa.”
He said successful transition would require input “not simply from the G8” but from “a combination of special efforts from friends of North Africa” including Gulf nations and multilateral development banks.
The bank last week approved a $500 million emergency loan to support Tunisia’s interim government. The funding is part of $1.4 billion in support for Tunis provided by the World Bank, the European Union and the French Development Agency.
Kaberuka added that the bank was in discussions with Egypt over a similar support package.