Jacques brinon, Associated Press
PARIS — Arab uprisings are pushing aside deficits and austerity as the biggest worry of the leaders of the Group of Eight industrialized nations this year.
President Barack Obama and the other leaders will seek to marshal their combined economic might behind the grass-roots democracy movements that have swept the Arab world — and driven away tourists and investors.
Egypt and Tunisia, where popular revolts this year overthrew authoritarian regimes, want to show G-8 leaders and international financiers that they are still sound investment destinations — which might be a tall order as the future shape and policies of their governments remains unclear.
The discussions starting Thursday in the chic Normandy resort of Deauville will see the host, French President Nicolas Sarkozy, bring together the heads of wealthy nations for what one of Sarkozy's top advisers describes as "the founding moment" of a partnership between the G-8 and the Arab countries.
That partnership may be strained, however, by tensions over how to handle Libya's rebel movement and entrenched leader Moammar Gadhafi. NATO appears to have no exit strategy, and efforts to oust Gadhafi remain elusive.
The leaders of the U.S., Canada, Britain, Germany, France, Japan, Italy and Russia will greet counterparts from Tunisia, Egypt and the head of the Arab League to hash out details of what some are calling a new "Marshall Plan" for these countries, similar to the massive U.S. aid to Europe after World War II that helped the continent rebuild and stave off communism.
The historic parallel is fitting, as Deauville is just a short drive along the English Channel from the D-Day landing beaches where the U.S. and its allies began to roll back the Third Reich in 1944.
A top Sarkozy official drew another historical analogy, saying the aid and investment to be promised to the Arab nations would resemble that which the G-8 offered to Eastern and Central European nations after the collapse of communism in 1989.
Last week President Barack Obama said the U.S. has asked the World Bank and the International Monetary Fund to present a plan at the G-8 summit that sets a path to stabilize and modernize the economies of Tunisia and Egypt.
The U.S. will forgive up to $1 billion in Egyptian debt and guarantee another $1 billion to finance infrastructure and new jobs. Obama said he will ask Congress to finance enterprise funds that will provide money for investment in both countries — a request that comes as Congress seeks to cut spending.
Tunisia, followed by Egypt, kicked off change around the Arab world, as broad-based popular movements took to the streets demanding greater rights and political representation from their authoritarian governments.
But the street demonstrations in Cairo and Tunis that thrilled and inspired the Arab world also drove away the tourists and investors on which these economies are heavily dependent.
"The first thing they will be looking for is direct financial aid," said Said Hirsh, a Middle East economist with Capital Economics consultancy in London. "Both countries need quite a lot of money considering the hit to their economies and their revenues."
While U.S. officials say G-8 countries will discuss their role in the process, they say it is too soon to reach a deal on dollar amounts for assistance.
The European Bank for Reconstruction and Development, a London-based institution set up in 1991 to foster transition to market economies in post-communist Europe, could be "repurposed" to focus its expertise on the southern Mediterranean region, a top official in Sarkozy's office said, speaking on condition of anonymity because of protocol.
- Poll: Two-thirds of US would struggle to...
- Egypt army says plane wreckage found near...
- Trump to wary Republicans: Trust me. Really.
- India records its hottest temperature ever...
- Stocks move higher, led by technology and banks
- Nigeria: 2nd Chibok girl rescued was not...
- New Taiwan president omits one-China...
- Pregnant women in US with Zika spikes on new...