North Africa’s hefty external financing requirements, coupled with turmoil in the global financial markets, have increased the risk that the region could be hit by a balance of payments crisis. Against this backdrop, Egypt’s decision to recommence funding negotiations with the IMF is a welcome move. What’s more, the conditions set by the IMF are likely to act as an anchor for reforms. Indeed, with the IMF’s ‘Arab Spring’ package now expanded to include Morocco, Tunisia and Jordan, we are increasingly hopeful that the resource-poor Arab states may be incentivised to implement much-needed reforms.
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