Middle East: Economic Situation

Mr. Jim Cunningham
To ask the Secretary of State for International Development what steps his Department is taking to improve economic conditions in the Middle East.

Hilary Benn
DFID is helping to improve the economic conditions in the Middle East in a number of ways:

We are supporting the Iraqi Government in their economic reform efforts through a £13 million programme, providing technical advice on fiscal (including budget management and public financial management) and macroeconomic policy.

We are providing £15 million to the Temporary International Mechanism (TIM) in the Occupied Palestinian Territories. The TIM and other international assistance has helped to slow economic decline. The World Bank has highlighted the restrictions on movement and access of Palestinians as the biggest economic constraint, and the UK Government have made our concerns clear to the Israeli Government on this.

As part of our Yemen programme of £12 million this year, we are investigating various ways in which we can support growth and jobs for poor people. We also focus on improving the efficiency of Government. We are supporting the Ministry of Finance to implement National Public Financial Management Reform. This includes support to budget development and management, procurement reform and auditing. Currently we have £1.1 million committed (2006-08) to this multi-donor Government programme, and are looking to expand over 2008-11 if opportunities to build on progress exist. At community level, the Social Fund for Development (SFD) is supporting small and micro enterprise development throughout the country to which DFID is providing approximately £800,000. DFID has over the past couple of years worked with the Government and other donors to harmonize donor assistance in Yemen in order to make it as effective as possible.

At regional level, DFID supports economic reform across the Middle East and North Africa (MENA) region through contributions to the EC European Neighbourhood and Partnership Instrument (ENPI) which will provide €5.6 billion (approximately £3.8 billion) for 17 MENA and eastern European countries from 2007-10. Approximately €1 billion (approximately £0.6 billion) of this will come from DFID’s budget. The ENPI is designed to promote good governance and equitable social and economic development.

DFID also directly supports the Facility for Euro-Mediterranean Investment and partnership (FEMIP) which has loaned €2 billion (approximately £1.4 billion) to MENA countries to help them meet the challenges of economic and social modernisation and improve regional integration. DFID has provided €3 million (approximately £2 million) in grants to a technical trust fund which helps to ensure the FEMIP lending is effective.