x Abu Dhabi, UAEThursday 20 July 2017

Brown waves IMF carrot for GCC cure

Countries that help alleviate the international financial crisis deserve a greater role in the governance of the IMF.

An image of Gordon Brown is displayed on a television monitor as he speaks at the ADIPEC 2008: Abu Dhabi International Petroleum Exhibition & Conference inside the Abu Dhabi National Exhibition Centre, on Nov 3 2008.
An image of Gordon Brown is displayed on a television monitor as he speaks at the ADIPEC 2008: Abu Dhabi International Petroleum Exhibition & Conference inside the Abu Dhabi National Exhibition Centre, on Nov 3 2008.

Countries that help alleviate the international financial crisis deserve a greater role in the governance of the International Monetary Fund (IMF), Gordon Brown, the British prime minister, said in a speech in Abu Dhabi yesterday. GCC countries' healthy monetary reserves should be part of the short-term cure for the economic crisis that was the result of poor regulation. "To stop the spread of contagion to neighbouring countries, we must build agreement for a new facility for the International Monetary Fund, and I very much hope the Gulf states will be able to contribute to these efforts," he said. "It's in all our interest to stop the contagion that is happening and to rebuild confidence in the world financial system." Offering a carrot to GCC states, he added: "I very much accept the argument that countries that contribute in this way should have a greater say in the governance of the IMF." The British leader is touring the region in an effort to urge governments to use their reserves to shore up the IMF. He visited Saudi Arabia and Qatar on Saturday and Sunday, and met Sheikh Khalifa bin Zayed, President of the UAE and Ruler of Abu Dhabi, and Sheikh Mohammed bin Zayed, Crown Prince of Abu Dhabi, later yesterday. Lord Peter Mandelson, the British business secretary, who is accompanying Mr Brown, said countries they had visited had expressed a desire to play their part in limiting the extent of the global financial crisis. "My view is that the Gulf states want to be real partners in what the rest of the world has got to do about a global financial recession that started in the US," he told The National. "They want to live up to their share of responsibility. I've been impressed by the way the Gulf states we have met have wanted to commit to shouldering their share of the burden. There's a willingness to play their part in the IMF." During the meeting with Sheikh Khalifa, the leaders reviewed co-operation agreements between the two countries and discussed ways to deal with the global economic situation, the state news agency, WAM, reported. Sheikh Khalifa welcomed the efforts by Mr Brown to boost international co-operation to overcome the current financial crisis and enable financial institutions and global funds to play a role in assisting the affected countries. Mr Brown also announced Britain would sign an agreement with the Abu Dhabi Future Energy Company, or Masdar, to co-operate on developing low-carbon technology as part of the answer to the energy crisis. Addressing an audience of oil executives and government officials at a petroleum conference, he said the world was suffering a crisis of high and volatile prices for commodities, including oil. He argued that this summer's record prices for crude were the result of a shortage of supply, in contrast to Opec, which said the high prices were caused by factors unrelated to market fundamentals. But Mr Brown - himself a frequent critic of Opec - said energy producers and consumers would need to move beyond recurring arguments over prices. "Clearly we need a way forward in our energy policies that moves beyond the traditional zero-sum game that assumes the question of oil commodity producers versus oil commodity consumers. "That approach has too often had producers unable to plan or invest with confidence for the future, consumers subject to volatile prices, our planet damaged by absence of stable plans for a low-carbon future." The future for energy, he said, lay in developing low-carbon alternatives, including nuclear power and projects to capture carbon dioxide emissions and store them underground. Mr Brown said Britain and Masdar would "develop and deploy low-carbon technologies, for example in on-and-offshore windpower, carbon capture and storage, solar and marine generation, electricity networks and their application in the development of sustainable cities". The agreement comes several weeks after Masdar announced it would form a joint venture with Eon, a German utility, to invest in an offshore wind project in Britain. Mr Brown urged all oil producers to follow Abu Dhabi's lead in investing in alternatives as part of a "shared interest in a more diversified range of energy sources". "In turn, oil-consuming countries should, as we in Britain have done, offer openness and partnership for energy investments." Mr Brown suggested Abu Dhabi would benefit from a new round of globalisation, which would require more co-operation "with American leadership essential for its success". "Those countries that invest in the future, with value-added products and resources to sell to the world, will benefit from the next stage of this global economy," he said. Mr Brown also visited Abu Dhabi Men's College, where he learnt about the Tawteen programme, which promotes Emiratisation in the private sector. Mr Brown was particularly interested in the scheme's efforts to encourage women into fields in which they have not had a traditional presence. "They're going to be engineers, that's very good," Mr Brown said after learning about some of the programme's initiatives. "That's changing the whole culture." Today, Mr Brown is in Dubai to meet Sheikh Mohammed bin Rashid, Vice President of the UAE and Ruler of Dubai. A delegation of British businessmen, including the chief operating officer of HSBC Holdings and Lord Peter Levene, the chairman of Lloyd's of London, will also meet senior Emiratis representing most of the major companies and organisations in Dubai. Mr Brown will also attend. The business event, which will be held at the Dubai International Finance Centre, is expected to include a discussion on the effects of the global credit crunch in the region. The prime minister will go on to attend a meeting hosted by the Young Arab Leaders organisation, which is holding an international summit at the London Business School next year. The delegation is due to fly back to Britain this evening, after a four-day tour that has included visits to Saudi Arabia, Qatar and the UAE. cstanton@thenational.ae * With additional reporting by Daniel Bardsley