LIMA, October 10, 2015— The Secretary General of the United Nations and the Presidents of the World Bank Group and the Islamic Development Bank Group announced today a joint initiative to scale-up financing in the Middle East and North Africa to help countries hosting significant refugee populations, countries impacted by conflict, as well as countries that have significant investment needs to achieve economic recovery.
“The world today is witness to higher levels of conflict than a decade ago, and the highest level of forced displacement since the Second World War,” said United Nations Secretary-General Ban Ki-moon. “The drivers of violence and instability are more complex and more intractable than ever. Nothing emphasizes this reality more than the conflicts in the Middle East and North Africa. To address the scale and the nature of the conflicts, we need new approaches. It is important that the World Bank, as a close partner to the UN, and other international financial institutions, mainstream and actively invest in conflict-affected states.”
The proposed financing initiative consists of two distinct mechanisms to support countries impacted by conflict and economic slowdown, as well as those affected by large numbers of refugees and internally displaced persons:
- Under the first mechanism, guarantees from donor countries would be leveraged in order to issue special bonds, including sukuk or Islamic bonds, to finance economic recovery and reconstruction projects;
- In the second mechanism, grants from donor countries would be used to provide concessional finance to middle income countries of the region hosting the bulk of refugees.
“Strong global partnerships and innovative financing are essential to meet the scale of the need in these hard-hit countries,” said World Bank Group President Jim Yong Kim. “Concerted action by the international community is vital – otherwise, violence and conflict will continue to corrode the economies, societies, and lives of millions of people. It is our collective responsibility to support the Middle East and North Africa region at this critical time, and this requires significant resources -- more than any one country or organization is able to provide on its own.”
The financing initiative was presented at an international ministerial roundtable on the sidelines of the Annual Meetings of the World Bank Group and International Monetary Fund. A broad range of governments and international organizations agreed on the urgent need to mobilize additional financing for the Middle East and North Africa.
Over 15 million people in the Middle East and North Africa have been forced from their homes over the past four years due to conflict and instability, taking an enormous humanitarian and economic toll on the region. Beyond the human suffering, immense pressures have been placed on the resources of host countries that were already facing significant economic challenges. In addition to the immediate costs, estimates to rebuild the war-torn areas are in the hundreds of billions of dollars. Even countries not directly affected by conflict have seen their economies slow down and youth unemployment increase; as a result, those countries have significant needs to restore economic growth
"History has taught us that it is never too early to plan for post-conflict recovery and reconstruction,” added Islamic Development Bank Group President Ahmad Mohamed Ali Al-Madani. “The impact of unrest and conflict across the region, including the growing number of refugees and internally displaced persons, is taking us outside our comfort zone and is clearly challenging us to act differently and innovatively, but more importantly, to act collectively and decisively.”
Meeting participants expressed support for the World Bank Group’s new strategy for the Middle East and North Africa, which promotes economic and social inclusion in order to help reinforce peace and stability in the region. In addition, an agreement was reached for the formation of a working group to be co-chaired by the United Nations, the World Bank Group, and the Islamic Development Bank Group. The working group was asked to finalize the details of the financing mechanisms and develop an implementation roadmap by February 2016.