by Stephen Collinson

WASHINGTON (AFP) – President Barack Obama will Thursday unveil a multi-billion dollar economic plan to spur and reward democratic change in the Arab world, modeled on the evolution of post-Soviet eastern Europe.
The comprehensive US scheme, initially targeting Egypt and Tunisia, will serve as an incentive for other states currently rocked by "Arab Spring" turmoil, to embrace people power and turn towards democracy, officials said.
Obama will lay out the initiative in a long-awaited major speech sketching Washington's response to the historic wave of change sweeping across the Middle East and North Africa, at the State Department at 1540 GMT Thursday.

A senior official said the administration had asked: "how do we take some of the successful efforts in Eastern Europe and apply them in countries that are transitioning to democracy in the Middle East and North Africa?"
"It is the beginning of a long term effort. These transitions will play out over a period of years -- Egypt and Tunisia are at the forefront because they have already taken these steps.

"It is our hope that there are other transitions to democracy that follow in the years to come," the official said on condition of anonymity, perhaps referring to states like Syria that has launched a crackdown on protests.
Specifically, the plan will seek to reorient the European Bank for Reconstruction and Development, which helped rebuild market economies in post-communist Europe, to play a similar role in the Middle East.
To help Egypt meet critical development following the fall of president Hosni Mubarak, Washington will develop a new mechanism to cancel debt to provide cash and investment funds, a program worth a billion dollars..

It will also guarantee up to a billion dollars in borrowing to finance infrastructure development and to support job creation through the US Overseas Private Investment Corporation (OPIC).
The White House, which already sends billions of dollars of aid, including military support to Egypt's way, will also seek authorization from Congress to establish a US-Egyptian enterprise fund.
The United States will also work with the World Bank, the International Monetary Fund and the African Development Bank to unlock more funding and financing guarantees to encourage democratic reform in the Arab world, officials said.

The plan was unveiled following calls for an initiative similar to the Marshall Plan, which rebuilt shattered Europe after World War II and checked the spread of communism.
The rationale of Obama's Arab plan appears to be an attempt to tackle the economic deprivation and miserable prospects of vast swathes of Arab population, which, along with repression of basic rights, triggered a wildfire of protests.

US officials said they would also seek to support better economic management in transitioning nations, try to improve economic stability by easing deficits and spurring growth and would support economic modernization and reform.
Trade will also be used as a lever, in an attempt to help nations help themselves.
"If you take out oil exports, (in) the countries of this region, 400 million people export about the same amount of goods as Switzerland does, with eight million people," another senior official said.
"The countries are not terribly well integrated with each other nor are they terribly well integrated with the global economy."

Obama will seek Thursday to sketch a plausible policy response to the sudden, complex and often contradictory demands thrown up by revolts that started in Tunisia, and spread to nations including Egypt, Syria, Yemen.
But it was unclear whether the president would use the speech to relaunch his stalled drive for Israeli-Palestinian peace.
The breathtaking speed, historical scope and complexity of change sweeping the region caught Washington, like the leaders it challenged, unawares.

For many Americans, the most significant foreign event of the year is the US killing of Osama bin Laden in Pakistan, a fact pointing to a key domestic audience for Thursday's speech.
The president is also expected to have harsh words for US foes Syria and Iran.
On Wednesday, Obama imposed direct sanctions on President Bashar al-Assad and six top aides over Syria's deadly crackdown on protests, telling Assad to move to democracy or step down.
"It is up to Assad to lead a political transition or to leave," a document accompanying the sanctions declaration said.