President Obama to Tell Arab World US Eager to Help Them Realize Economic and Political Dreams

By MichaelJames

May 18, 2011 9:00pm

On Thursday, President Obama will try to convince the Arab World that the U.S. wants to shift its engagement in the region from a military one to a political and economic engagement that will help the people of the region realize their dreams.

“Having wound down the Iraq war and continuing to do so, and having taken out Osama bin Laden, we are beginning to turn the page to a more positive and hopeful future for U.S. policy in the region,” a senior administration official told reporters today, previewing the speech.

Sources said President Obama will discuss Syria as a place where the Arab Spring has not been allowed to flourish, though he will not call for President Bashar al-Assad to step down – though he will mention the sanctions the U.S. imposed on him today.

Officials said the president sees the speech as way to step back and assess the historic changes in the region and to take the opportunity to explain to the world how his administration will support the democratic aspirations of the people in the region while focusing on four core principles: 

  • nonviolence,
  • support for human rights,
  • support for political reform, and
  • support for economic reform.

Reporters were briefed on this last point today, on how the U.S. can promote economic development and change:

“All of these countries share untapped potential of its people,” a senior administration official said. “The majority of the population is under 30. Four million people [are] entering the labor force every year. In Egypt alone, unemployment was estimated to be 30 percent. And so there’s a great deal to be done to ensure that the benefits of economic reform are widely shared and bringing people into the work force to create jobs and opportunities.”

Said a senior official: “You have very large populations of young people, too many of whom cannot find a job.  You have a history not just of political rights being restricted but of economic corruption that has also frustrated opportunity. So we think it’s important to note that some of the protests in the region are deeply rooted in a lack of individual opportunity and economic growth, as well as a suppression of political rights.  We also know from our study of the past that a successful transition to democracy depends, in part, on strong foundations for prosperity, and that reinforcing economic growth is an important way of reinforcing a democratic transition.”

The president will propose series of initiatives focused on Tunisia and Egypt, which have already “begun their transitions” to democracy. The hope is that other countries will see Egypt and Tunisia go through these changes and thrive economically with international support and opt to embrace those reforms, as well.

The initiatives will include, according to officials:

  1. Better economic management  – using a number of programs “to support NGO’s, universities, think tanks and others who can help contribute to economic policy-making in the region”;
  2. Economic stability – As part of the upheaval there have been a series of economic dislocations, the official said, with growth forecasts revised downward, international reserves decreased, budget deficits widening. “The international community will have to come together to take steps in the context of reform to ensure financial stability across the region.”
  3. Economic modernization and reform – “The key to the future of this region is the development of a strong private sector, an entrepreneurial sector that can create jobs.”
  4. A framework for trade integration and investment  -  “The countries are not terribly integrated with each other nor are they terribly well integrated into the global economy. And we’ll be taking a number of step-by-step initiatives to facilitate more robust trade in the region.”

President Obama will push to galvanize support from the international community, reorienting the European Bank for Reconstruction and Development to support the transitions unfolding in the Middle East and North Africa.

“The EBRD has as specific democracy mandate and so it will create strong incentives for countries in the region to implement reform that provide the economic underpinning for political freedom and strong democracies,” an official said.

For Egypt, the U.S. is developing a new mechanism that can essentially channel resources by cancelling debts from the past to provide investment for the future. And that will essentially address a duel objective: It will reduce Egypt’s external debt burden and provide important cash flow relief in a period during which that is particularly important. Secondly, it will channel additional resources to address Egypt’s medium-term development needs.”

The U.S. will also help Egypt regain access to global capital markets, guaranteeing up to $1 billion in borrowing to finance infrastructure, and support job creation through our Overseas Private Investment Corporation. The White House will also support efforts to authorize the establishment of an Egyptian American Enterprise Fund to stimulate private sector investments and promoting projects to generate jobs.

Details about the exact price tag was not forthcoming, though the officials suggested the relief of debt and investment would cost roughly $1 billion over a few years. The loan guarantees would support roughly an additional billion.

-Jake Tapper and Sunlen Miller

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