Obama's G-8 focus: Saving vulnerable economies

U.S. President Barack Obama meets with Russia's President Dmitry Medvedev on the sidelines of the G8 summit in Deauville, France, Thursday, May 26, 2011. AP Photo/Charles Dharapak

U.S. President Barack Obama meets with Russia's President Dmitry Medvedev on the sidelines of the G8 summit in Deauville, France, Thursday, May 26, 2011.
AP Photo/Charles Dharapak

DEAUVILLE, FRANCE - Last year's G-8 summit focused on digging out of the deepest global economic downturn since the 1930s. This year with a halting economic recovery underway, the G-8 is working on a hodge-podge of issues - from Libya, to missile defense, to keeping the recovery going.

But President Obama is putting a lot of his focus on an issue that didn't even exist last year -- saving the economies of Egypt and Tunisia before their transitions to democracy unravel.

As at past summits, the other leaders all seem to gravitate toward President Obama. A group of locals behind a fence in this heavily fortified resort city went wild when they saw him walking down the street with Russian President Medvedev and French President Sarkozy. Those two stood to the side while President Obama shook dozens of hands, beaming that big smile, and repeating "bonjour!" and "merci!" He's using that clout as "Most Popular Leader" to lobby other leaders to join him in putting together an aid package for Egypt and Tunisia.

He set the stage last Thursday in his speech at the State Department on the Arab Spring: "(W)e do not want a democratic Egypt to be saddled by the debts of its past," the president said. "So we will relieve a democratic Egypt of up to $1 billion in debt." He also proposed a billion dollar in loan guarantees for job creating infrastructure projects. The goal, he said, is to "help them recover from the disruptions of their democratic upheaval."

That upheaval and the joyous celebrations that followed obscured an essential fact of bloody uprisings: they send tourists and foreign investors scurrying to safer places. And in Egypt and Tunisia they have yet to return. Now, with unemployment soaring, anger is mounting in both countries. And if their economies falter, the White House believes it's unlikely their nascent democracy movements can survive.

Shortly after the Arab Spring uprisings began, the National Security Council began compiling extensive research on the history of such protest movements, including those in Eastern Europe. They concluded that an essential element of success is a strong, or at least workable, economy. The President hopes a financial infusion from the international community - including billions from the IMF and other development banks -- will give Egypt and Tunisia a fighting chance.

But it's not just about those two nations. The White House says helping them will also send a signal to other nations in the region with fledgling democracy movements. As White House spokesman Ben Rhodes put it today at a briefing in Deauville:

"(I)t's a program of support for Egypt and Tunisia, but it's also a message to the broader region that 'democracy delivers' -- and if you pursue that path, there's going to be support on the other end."

  • Chip Reid

    Chip Reid is CBS News' national correspondent.

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