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Supporting Peace, Prosperity, and Democracy in the Middle East and North Africa
February 13, 2012

U.S. Department of Treasury Official Blog
February 9, 2012

Blog Post by Neal Wolin, U.S. deputy secretary of the TreasuryThis item was originally published on the U.S. Department of Treasury’s official blog on February 9 and is in the public domain. There are no republication restrictions.

Two years ago, President Obama announced that the United States would broaden its engagement in the Middle East and North Africa, and the Administration has intensified this effort as historic political changes have swept through the region. Recently, I traveled to Israel, the West Bank, Tunisia, and Libya with Deputy Secretary of State Thomas R. Nides to reaffirm that economic cooperation and assistance are critical aspects of our country’s diplomatic efforts in this part of the world.First, we traveled to Israel – a vital partner and ally of the United States – where we reiterated our continued commitment to Israel’s political and economic security in meetings with Deputy Foreign Minister Daniel Ayalon, Bank of Israel Governor Stanley Fischer, National Economic Council Director Eugene Kandel, National Security Adviser Yaakov Amidror, and other government officials.As part of this commitment, we emphasized that the Obama Administration will work with Congress regarding Israel’s request to extend U.S. loan guarantees that have been in place since 2003. Deputy Secretary Nides and I also stressed to our Israeli counterparts that a strong, functioning Palestinian economy is essential to Israel’s security and the success of the peace process. We emphasized that Israeli cooperation, including the uninterrupted transfer of customs and other tax revenues, is essential to Palestinian economic stability and growth.

During our time in the West Bank, in meetings with Prime Minister Fayyad, Palestine Monetary Authority Governor al-Wazir, and representatives from the Palestinian private sector, we strongly encouraged the Palestinian Authority to continue pursuing reforms that promote private sector growth and build effective institutions of governance. These efforts are critical to meeting the aspirations of the Palestinian people and maintaining peace and security. The United States has offered its support through assistance programs, including $200 million in budget support to the Palestinian Authority in the last fiscal year.

Next, we visited Tunisia, where protests against the Ben Ali regime sparked a wave of political change, now known as the “Arab Spring,” throughout the region. The transition currently underway in Tunisia is not only political but also economic. The new government is working to promote more broadly-based economic growth, so more of its citizens benefit from opportunities that previously were limited to a narrow elite. While there, we met with the leaders of the new government, including President Moncef Marzouki and Prime Minister Hamadi Jebali, as well as representatives of business and civil society.

The U.S. is committed to helping Tunisia prevail against short-term economic headwinds, including a shortfall in government revenues and increased near-term spending needs. We will provide the new government with loan guarantees so that it can borrow from international markets at affordable rates, and continue to undertake necessary reforms during this crucial transitional period. In addition, the U.S. is also chairing a multilateral initiative – the Deauville Partnership, a new coalition of G-8 countries, international financial institutions, and regional partners – to support the political and economic transitions in Tunisia and other countries in the region.

Libya was our final stop. In February 2011, while the Qadhafi regime was still in power, the United States and other UN members imposed sanctions on Libya to prevent the diversion of more than $100 billion in worldwide assets that belong to the Libyan people. In December, after Qadhafi was overthrown by the Libyan people with the support of the U.S. and NATO allies, the United States unfroze most protected assets, which the new Libyan government is using to finance post-war reconstruction.

In Treasury’s first meetings with the interim government and other officials – including Prime Minister Abdurrahem al-Keeb, Deputy Prime Minister Mustafa Abu Shaghour, Finance Minister Hassan Ziglam, and Central Bank Governor Saddek ElKabeer – we stressed the need for Libya’s leadership to stand by its commitment to manage these financial assets and natural resources transparently and responsibly. We also discussed the need to begin work on economic reforms that promote private sector-led growth and diversify Libya’s economy into areas beyond the energy sector.

Everywhere we went – Israel, the West Bank, Tunisia, and Libya – we met with leaders and citizens facing long-standing challenges, but also new opportunities for progress. The U.S. is committed to helping our partners take advantage of these opportunities to achieve peace, political freedom, and economic opportunity.

[Neal S. Wolin is Deputy Secretary of the Treasury.]