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Ottawa won't open wallet further for North African democracy building

Prime Minister Stephen Harper and Foreign Affairs Minister John Baird take part in the first working session of the G8 Summit in Deauville, France, on May 26, 2011.


With the G8 preparing a new package of financial supports for North African countries that have ousted dictators, Canadian officials are signalling that Ottawa is not preparing to unveil any major new package of bilateral assistance.

Prime Minister Stephen Harper is now attending sessions with other G8 leaders in Deauville, France. And on the sidelines, he met separately this morning with Japanese Prime Minister Naoto Kan.

Later today, he will meet with British Prime Minister David Cameron, European Commission President José Manuel Barroso, and U.S. President Barack Obama - with whom he will briefly discuss negotiations on a Canada-U.S. security perimeter to speed up flows of traffic and trade across the border.

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But a centrepiece of the summit is expected to be a pledge leaders of major industrialized countries to marshal political and economic support to aid Egypt and Tunisia in a transition to democracy.

Much of the money will come from international financial institutions like the World Bank and the International Monetary Fund, but the United States and European Union have also announced initiatives to fund development in the two counties.

On Wednesday, U.S. Secretary of State Hillary Clinton and Treasury Secretary Timothy Geithner sent a letter to G8 nations asking them to join U.S. financial-assistance efforts that would allow Egypt to swap debts for investments in job creation.

Canadian officials, however, stressed that the efforts to help Egypt and Tunisia should be handled through international financial institutions, and that Canada has in recent years contributed additional capital to help them lend more. Those development banks can respond to needs by speeding up a focus in North Africa, they said.

"What we're saying is we have provided our share of recapitalization of multi-lateral institutions. Others may not [have]and that may be part of it," said a senior Canadian official, who spoke to reporters on condition he not be named.

"But because of that recapitalization, we think that they do have the wherewithal to provide assistance. And if they front-load that, that ought to respond to significant needs of those two countries that we're talking about first, Egypt and Tunisia."

Mr. Harper's government has favoured injections of Canadian capital into development banks to help developing nations weather financial storms.

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In 2009, Ottawa provided a $2.6-billion loan guarantee to allow the African Development Bank - one of the financial institutions expected to help Egypt and Tunisia cope with economic slowdown. And last year, it agreed to increase its capital in the European Bank for Reconstruction and Development, which is considering expanding its operations to Egypt and Tunisia.

But the U.S. letter also asked G8 nations to consider measures to ease trade to countries in North Africa and the Middle East, as well as allowing Egypt to swap debt so that payments can be used for job-creation projects. "The United States is committed to a debt swap for Egypt and we are asking our partners to join us in this initiative," Ms. Clinton and Mr. Geithner said in the letter.

Canadian officials noted that members of the Group of Eight - Canada, the United States, Russia, Britain, France, Germany, Italy, Japan, and Russia - have not been asked to pledge sums to a G8 fund for Egypt and Tunisia, but rather to lead an international marshalling of assistance, which they said must come from mainly from institutions like the IMF.

Mr. Harper's spokesman, Dimitri Soudas, said Canadian support for the Arab Spring movements has gone beyond mere words, noting that Ottawa has imposed sanctions on recalcitrant regimes in Syria and Libya that have cracked down on protestors.

"Canada has participated in a quite an important fashion in the UN Security Council mandated mission in Libya, so it's gone beyond goodwill. It's obviously translated to actions," he said.

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About the Author
Chief political writer

Campbell Clark has been a political writer in The Globe and Mail’s Ottawa bureau since 2000. Before that he worked for The Montreal Gazette and the National Post. He writes about Canadian politics and foreign policy. More

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