Growth rates in Arab countries are expected to slump in the wake of a wave of pro-democracy protests, the chairman of the Arab Monetary Fund told a meeting in Doha. Countries hit by protests which toppled autocratic leaders in Tunisia and Egypt earlier this year "will see a slump if not a contraction in growth rates," Jassim Al-Mannai said at a meeting of governors of Arab central banks. "The reluctance of foreign investment and continued pressure on reserves and currencies combined with the possibility of increased unemployment... will increase the financial burdens on these countries," he warned. The economic instability has emerged in the wake of popular uprisings that began in Tunisia and toppled its strongman leader before spreading to Egypt, Yemen, Libya, and Syria. Governors of Arab central banks "emphasized the importance... of providing short-term financial support by international institutions to contribute to the overall financial stability in Arab countries affected by the recent events," in a statement after the meeting. The governors also "expressed their confidence in the future of the Tunisian and Egyptian economies and the banking sector in both countries," and hoped that "Libya's central bank will return to play its role," said the statement. On Saturday, G8 nations and institutions including the World Bank, the IMF, regional banks and the Arab Monetary Fund pledged nearly $80 billion in aid and loans over the next two years for Arab states who have ousted their dictators, doubling the amount promised earlier this year. Saudi Arabia's central bank governor Wednesday said "everyone" was concerned over the fragile state of the US economy and Europe's ongoing sovereign debt crisis. "Everyone is concerned," Muhammad Al-Jasser said on the eve of an Arab central bank governors' meeting in Doha. "The US and Europe are also concerned." Saudi Arabia and four other Gulf Cooperation Council states -Bahrain, the United Arab Emirates, Qatar and Oman--peg their currencies to the US dollar. The sixth GCC state, Kuwait, has pegged its dinar exchange rate to an undisclosed basket of currencies, including the US dollar, since 2007. With the greenback under renewed pressure since Standard and Poor's historic debt downgrade of the world's largest economy early last month, speculation has grown over whether some Gulf states might revalue their currency. Al-Jasser said the world's largest oil exporter had no plans to revalue its currency, the riyal, or to buy European debt - a move that International Monetary Fund chief Christine Lagarde urged emerging countries to do in Washington Tuesday.
