Editor’s note: The following information was released by the
White House on Wednesday evening this week:

A Libyan watches a television broadcast of a speech by U.S. President Barack Obama in U.S., at a shop in Benghazi May 19, 2011. REUTERS/Mohammed Salem

The revolutions in the Middle East and North Africa (MENA)
provide an historic opportunity to meet the aspirations of a people long denied
political freedom and economic opportunity. Economic modernization is key to
building a stronger foundation for prosperity and showing people the fruits of
democratic change.  The people of
the region will choose their own paths to democracy and prosperity, with
policies and programs that suit their circumstances.  That process may take years, as was the case in the
transitions of Central and Eastern Europe.  From the beginning of this process and along the way, the
United States will offer its support for economic modernization and development
to those making the transition to democracy.

The countries of the Middle East and North Africa are
diverse societies with diverse characteristics and economies.  The region of over 400 million people
contains a group of countries that export 18 million barrels a day of oil as
well as a group that is dependent on oil imports from their neighbors.  Saudi Arabia’s $440 billion economy is
more than 14 times that of Yemen. 
What these countries share is untapped potential, that if unlocked could
provide broader economic opportunities for their people.

Oil and gas revenues have enriched several countries and
enabled them to fund ambitious infrastructure programs.  Some of the non-oil exporters attracted
more foreign direct investment and achieved an acceleration of economic
growth.  The pace of economic
reform in the region, however, has been uneven and corruption has been a
widespread challenge.  Despite an
abundance of natural resources and impressive potential human capital, economic
growth in the region has not been as rapid as in the fast-growing emerging
market world, nor have its benefits been widely distributed.

With the majority of the population under the age of 30, and
more than 4 million people entering the labor force annually, the demographics
of the Middle East and North Africa pose challenges. Unemployment rates are
high across the region, particularly among the burgeoning youth population. In
Egypt, youth unemployment is estimated at over 30 percent.  The ability to address the growing
demand for jobs – which was one of the drivers behind the revolution – will
require significant structural changes and economic reform.

 From the
beginning of the transitions, representatives of the U.S. government have
consulted with the people of the region to better understand the significant
challenges they are facing.  Given
the nature of change in the region – the nature of our support is also
evolving.   The President
outlined a new economic vision to support nations that commit to transition to
democracy, and announced a series of initiatives that are geared toward
supporting a broadening of economic opportunity.

These initiatives are designed to meet short term economic
stabilization requirements as well as longer term economic modernization
needs.  These two objectives are
not mutually exclusive – The U.S. will direct support now to help meet the
needs of future generations.  Our
approach is based around four key pillars – support for better economic
management, support for economic stability, support for economic modernization,
and the development of a framework for trade integration and investment.

 Support for
better economic management. We will offer concrete support to foster improved
economic policy formulation and management.  We will do so alongside our democratization efforts.  We will focus not only on promoting
economic fundamentals, but also transparency and the prevention of
corruption.  We will use our
bilateral programs to support economic reform preparations, including outreach
and technical assistance from our governments, universities, and think tanks to
regional governments that have embraced reform, individuals and NGOs.  We will mobilize the knowledge and
expertise of international financial institutions to support home grown reforms
that increase accountability.

 Support for
economic stability. Egypt and Tunisia have begun their transitions.  Their economic outlooks were positive
before recent events, but they are now facing a series of economic
dislocations.  Growth forecasts
have been revised downward to 1 percent or less.  International reserves have decreased and budget deficits
are widening.  The tourism sector,
which is an important employer and source of revenue, has been idled and
foreign direct investment will significantly decrease this year. Egypt is
projecting a fiscal gap of 10 percent of GDP over the next 12 months, and
Tunisia is projecting a deficit of 5 percent of GDP.  If we implement the right initiatives to offer stabilization
support, the long term outlook for these countries can be positive.  Absent action, we run the risk of
allowing economic instability to undermine the political transition.

The United States has designed initiatives to support the
stabilization process and to lay the foundation for longer term
prosperity.  We are galvanizing
financial support from international financial institutions and Egypt and
Tunisia’s neighbors to help meet near term financial needs.  We strongly welcome Egypt and Tunisia’s
engagement with the IMF and are looking forward to seeing the joint action plan
that multilateral development banks are working on for the G8 summit.

 We will also
help bilaterally.  In response to
numerous requests from the Egyptian government and the Egyptian people, the
United States will relieve Egypt of up to $1 billion in debt by designing a
debt swap arrangement, and swap it in a way that allows Egypt to invest these
resources in creating jobs and fostering entrepreneurship.  As another part of our effort to help
Egypt invest in its people and regain access to global capital markets, we will
lend or guarantee up to $1 billion in borrowing needed to finance
infrastructure and support job creation. 
We will do this via our Overseas Private Investment Corporation (OPIC).

 Support for
economic modernization.  We realize
that the modernization of the MENA economies will require a stronger private
sector.  To address that, we are
committed to working with our international counterparts to support a
reorientation of the European Bank for Reconstruction and Development to
support countries in the region. 
That Bank played a crucial role in the democratization and economic
transition in Central and Eastern Europe and can make a great contribution in
MENA as well.  The International
Financial Corporation will scale up its investments to strengthen the private
sector in transition countries.  We
also seek to establish Egyptian-American and Tunisian-American Enterprise Funds
to stimulate private sector investment, to promote projects and procedures that
support competitive markets, and to encourage public/private partnerships.  And as Secretary Clinton announced in
Cairo, the Overseas Private Investment Corporation will provide up to $2
billion dollars in financial support for private sectors throughout the MENA
region.

 Develop a
framework for trade integration and investment.   If you take out oil exports, the MENA region of nearly
400 million people exports about the same amount of goods as does Switzerland,
with less than 8 million people. 
Moreover, regional trade structures are poorly integrated, as MENA
sourced just 13 percent of their imports from other countries in the region.  Developing Asian countries, in
contrast, sourced over 25 percent of their imports from regional partners. The
United States will launch a comprehensive Trade and Investment Partnership
Initiative in the Middle East and North Africa. We will work with the European
Union as we launch step-by-step initiatives that will facilitate more robust
trade within the region, build on existing agreements to promote greater
integration with U.S. and European markets, and open the door for those
countries who adopt high standards of reform and trade liberalization to
construct a regional trade arrangement.