WASHINGTON: Middle East political turmoil needs to be closely watched lest it throw the global economic recovery off track, the World Bank and International Monetary Fund said Saturday. “A worsening of conditions in the Middle East and North Africa could derail global growth,” the World Bank said as the two institutions held their annual spring meetings in Washington. “If oil prices were to rise sharply and durably — either because of increased uncertainty or due to a significant disruption to oil supply — global growth could slow by between 0.3 and 1.2 percentage points in 2011 and 2012, respectively.” Meanwhile the IMF, in a statement from its main policy body, stressed the need to generate jobs as countries recover from the financial crisis to ensure the revival is sustained. “Against this background, the immediate economic impact of the tragic events in Japan and of developments in some Middle Eastern and North African countries also warrant close attention,” it said in a statement. IMF Managing Director Dominique Strauss-Kahn said the problem of a jobless recovery to economic growth was worrying many countries, but was more acute as turbulence spreads across the Arab world — where unemployment for youth is particularly high. “The example of the Middle East and North Africa (highlights) this question that, you may have good figures at the growth level without having the sustainability of growth, just because of the political problems behind it.” “We stand ready to help” with technical and financial assistance, he added. French Finance Minister Christine Lagarde, who chaired a Group of 20 finance chiefs meeting on the sidelines of the World Bank-IMF meetings, called for strong support for the North African countries from governments and multilateral agencies Saturday. She said international financial institutions need to begin assessments “in particular of those countries that have initiated a transition towards democracy.” Lael Brainard, US Treasury under-secretary for international affairs, said that the World Bank, International Finance Corp and African Development Bank together could potentially muster $4 billion for Egypt and Tunisia in the next year, to help them restart their economies.
