Mid-East Finance Corporation to provide loans to private businesses
Regional-USA, Politics, 10/9/2003

US Deputy Assistant Secretary of State for Near Eastern Affairs Elizabeth Cheney announced the establishment of the Middle East Finance Corporation, which will loan capital to small and medium sized business owners in the region as part of the larger Middle East Partnership Initiative (MEPI).

Cheney, speaking in Detroit September 30 at the U.S.-Arab Economic Forum, said the initiative was specifically "aimed at supporting micro-entrepreneurs." Economic reform, one of the main "pillars" of MEPI, is extremely urgent, she said, because Middle Eastern economies are not growing quickly enough to provide sufficient job opportunities for their expanding workforces. Cheney said that over 50 percent of Middle Easterners are below the age of 20, and "time is not on our side" to provide them with opportunities to earn a living.

The small and medium sized business sectors targeted by the new MEPI initiative "have been the true engines for economic growth, and business leaders in those categories are the ones who are most likely to be able to generate the kind of job creation that is necessary," said Cheney.

She said the Middle East Finance Corporation will be launched with $20 million for the current fiscal year and a planned funding increase to $30 million in 2004.

During her lunchtime address in Detroit, Cheney outlined the four major areas targeted by MEPI -- political reform, economic reform, educational reform, and the empowerment of women. She said the specific needs and priorities of the program had been identified through the 2002 United Nations Arab Human Development Report.

She said the $129 million program represents "a significant shift in U.S. foreign policy towards the Middle East" since never before had the U.S. government focused upon issues of economic and political freedom in the region as part of its national security strategy.

"[W]e firmly believe and recognize that the opening up of economic and political systems, the improvement of schools, and the empowerment of women across the countries of the Middle East is critical for the future and critical to our national security and critical to the security of the people in the region," said Cheney.

To help implement the plan, the Bush administration is seeking ways of funding or otherwise supporting citizen and non-profit activities working on those four issues, while recognizing that from country to country, "the solutions will be different and the ways that we can provide support will be different," she said.

MEPI will work with entrepreneurs by giving micro-loans to help the establishment or expansion of smaller sized businesses. Cheney said MEPI will also seek to reform school systems and curricula which are "failing the young people" who are graduating unprepared for the global marketplace. Both the economic and educational reform programs will also specifically target women in an effort to empower them and give them greater opportunities to participate in their societies.

Cheney said the encouragement of political change is not an effort to impose an American-style democracy on the region. However, findings outlined in the 2002 Arab Human Development Report and supported by the World Bank, have sent the message that Middle Eastern societies have to "open up," she said. "People have to have a voice." Cheney said this meant having a free press, an independent judiciary, free and fair elections, and civil society and non-governmental organizations "that will give people a voice so that their cause can be heard and so that they can have an impact on their government."

"The kinds of things that I just laid out, the kinds of freedoms that we're talking about -- the freedom to know that you're going to be able to have a job and feed your children, the freedom to go to school so that you can get a job, the freedom to choose your government, the freedom to have a say in how you're governed -- these are universal. They're not [necessarily] American values," said Cheney.

Cheney acknowledged a need to build U.S. credibility in the region, amid skepticism and mistrust over its intentions. She invited her mostly Arab-American audience to "watch us." "You'll see that this is a ... long-term commitment for us," she said.

However, MEPI's success is also dependent upon leadership in the Arab world from the government, civil society and business sectors, she said.

She called upon her audience to recognize that "the countries of the Middle East deserve not to fall further and further behind, and that critical change is necessary for countries across the Arab world in particular to take advantage of human capital, of human capacity, of the global economy."

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  MEPI To Create "Free and Dynamic Economies" in the Arab World   (6/27/2003)
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