Brace yourself for more structural adjustment

"The Middle East and North Africa region has become the fastest-growing area for investments from the World Bank's private sector arm, the International Finance Corporation (IFC), which surpassed one billion dollars for the first time last year, according to the Bank Information Centre, a Washington-based research group on international public lenders.

Egypt, the most populous Arab country, received most of the loans (283 million dollars) over the past five years, followed by Oman, Algeria and Iraq.

The report's authors say that the IFC is also taking advantage of new investment opportunities created by accelerated trade liberalisation and privatisation reforms in the region, which are often tied to the World Bank and International Monetary Fund (IMF) programmes.

Of all loans from multilateral financial institutions, including the African Development Bank, nearly a quarter again went to Egypt, which has implemented a rigorous World Bank-sponsored liberalisation programme.

Lending to Iraq is also forecast to grow in coming years. The World Bank has approved emergency loans worth around 400 million dollars to the country through its Iraq Trust Fund, while the IFC has committed over 100 million dollars in private sector operations.

The study notes that in 2001, the World Bank provided 507 million dollars to MENA -- only 2.9 percent of the total Bank lending that year. But in 2006, it gave out 1.7 billion dollars, more than half which went for finance and energy projects after several years of relatively minimal allocations to these sectors.

Lending projects in the water and sanitation, health and agricultural sectors dropped off almost entirely, it says.

In the last five years, Egypt has borrowed more from the World Bank than any other country, receiving over 1.2 billion dollars, followed closely by Iran, which has received 1.1 billion dollars from the Bank over the same period.

The study found that the Bank went into the region with the same ideology it imposes elsewhere in developing nations. It says its focus has been on instituting "comprehensive structural reform" to facilitate greater liberalisation measures such as the elimination of trade barriers to open up the region to increased private investment and economic integration. The authors of the report cite many of the Bank's own studies, which have revealed that income inequality in MENA is on the rise, despite increased economic growth and investment. "

The jury is still out about the significance of increased IFI investment in MENA for the region's people. The impacts of the influx of public financing on poverty, inequality, unemployment and the environment in MENA remain to be seen," the authors of the report said.

"Investment is not an unambiguous good, as it is often portrayed to be, nor is investment itself tantamount to development"."

In a nutshell: There out to get Iraq in financial chains, if it has a slight chance of ever becoming a country again, privatization will boom in the region, neo-lib policies will be fostered, trade will be unbridled, the rich will become richer, and they've already got Iran by the balls.