Econostrum | Economic News in the Mediterranean

Supporting the economy in Syria's neighbours

Written by Caroline Garcia, MARSEILLE on Friday, May 13th 2016 à 11:44 | Read 723 times

International financiers in Lebanon, Jordan and Turkey need to cope with the emergency while preparing for the future.

The future hospital at Gaziantep on Turkey's border with Syria will help provide healthcare for Syrian refugees (photo : Kayi)
The future hospital at Gaziantep on Turkey's border with Syria will help provide healthcare for Syrian refugees (photo : Kayi)
With €15bn in loans expected to be granted over the next five years, the European Investment Bank is set to become the "largest international finance institution active in the Mediterranean Basin and Middle East". Since the start of the war in Syria, in 2011, it has loaned €13bn to neighbouring countries providing for the refugees.
Most of this funding has nothing to with the conflict or the humanitarian and economic crisis it has created in Lebanon, Jordan and Turkey. In the latter, which has accounted for almost €11bn of the €13bn in loans, the funds have mainly gone towards support measures for SMEs (€5.1bn) and the development of transport infrastructure (€1.7bn) and the energy sector (€1bn) for projects drawn up for the most part before the war began. But for the EIB, these projects are vital for the area's stability.

As a Bank's spokesperson points out, "Economic stability can obviously help bring political stability, the two being inextricably linked. By providing financial assistance in the form of loans for infrastructure and for the financing of SMEs, plus technical expertise for setting up financing facilities, we offer hope and contribute to job creation."

Coping with the emergency

This medium to long-term ambition is associated with short-term projects aimed at addressing the emergency situation, such as financing the construction of a hospital at Gaziantep, on Turkey's border with Syria. "The extra pressure created by the 350,000 to 500,000 refugees in Gaziantep will remain for the next five to ten years," says the EIB in presenting the project. North of Amman, in Jordan, the Bank is participating in financing the building of a water treatment facility. Here again, although the project is a response to local needs, its realisation will enable the massive influx of Syrian refugees to be catered for. Funds have also been allocated in Jordan to encourage entrepreneurship among the refugee population.

The EIB is relieving pressure on local services and is upgrading the infrastructure required to deliver basic services such as access to drinking water, health and schooling. Over the next five years, the EIB could lend another €2bn to Turkey, Jordan, Egypt and Lebanon. "By partnering with the World Bank, national development banks, financiers and international organisations, as well as with private sector stakeholders and NGOs, we can ensure the funding is as efficient as possible," concludes the Bank's spokesperson.

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