x Abu Dhabi, UAEWednesday 26 July 2017

Brown confident of Saudi funds

The British prime minister, during the first stop of a Gulf tour, said he expected Saudi to contribute to the IMF's bailout reserves.

The British prime minister Gordon Brown, centre, walks with Saudi officials on his arrival at King Saud university in Riyadh today.
The British prime minister Gordon Brown, centre, walks with Saudi officials on his arrival at King Saud university in Riyadh today.

RIYADH // The British prime minister Gordon Brown said today he expected Saudi Arabia to contribute to the International Monetary Fund's bailout reserves after he promised business leaders in the Gulf they would have a say in any future new world economic order. Mr Brown, who will stop in Qatar today and Abu Dhabi and Dubai on tomorrow and Tuesday respectively, is seeking additional funds to buttress the International Monetary Fund amid the worsening world financial crisis, which has struck the economies of Eastern Europe especially hard.

He is leading calls for oil-rich Middle Eastern countries to be among the biggest donors to the IMF's coffers, which at US$250 billion have already been depleted by emergency cash calls from Iceland, Hungary and the Ukraine totalling $30 billion. "The Saudis will, I think, contribute so we can have a bigger fund worldwide," he said after a meeting with Saudi Arabia's King Abdullah and making a direct plea for Gulf state support when speaking with business leaders early today. When asked about whether other Gulf countries would contribute to an IMF fund: "Yes, I think people want to invest in helping the world through this very difficult period of time."

Analysts have argued that Gulf states will feel little impetus to bolster the IMF fund, given its domination by the United States and the G7 industrialised nations. Kuwait's finance minister, Mostafa al-Shimali, told Al Anbaa daily in comments published today that Kuwait was prepared to listen to what Mr Brown had to offer. "The matter of supporting world markets depends on investment opportunities on offer and their possible returns," he said.

Any funds from Gulf states are unlikely to be pledged before a meeting of G-20 nations to hammer out potential reform of the global financial system to prevent a repeat of the current crisis, scheduled for Nov 15 in Washington DC, which will also be attended by King Abdullah. "I believe that your country has a crucial role to play and your voice must be heard," Mr Brown earlier told business leaders in a breakfast address on the first stop of a tour of the Gulf.

The business secretary Peter Mandelson, who is travelling with Mr Brown and a delegation of more than 20 senior British executives, said that the British prime minister's 20-minute one-on-one chat with King Abdullah stressed the importance of the situation. "They are getting each other on to the same page of analysis and the agreed response and Saudi Arabia's active participation in getting the world through this first financial crisis of the global age," said Mr Mandelson.

"But that is a process, not an event." Mr Brown said that the Middle East "will want to invest both in helping the world get through this very difficult period of time but I also think people want to work with us so we are less dependent on oil and have more stability in oil prices." Mr Brown, who has drawn ire from some oil producing states for criticising a recent decision by Opec to cut production to lift prices, told business leaders here that it was in everyone's interest to have a stable crude price. He said that the meeting of oil producers and consumers led by King Abdullah in Jeddah in July "broke new ground in recognising ... that we have common interests as producers and consumers in more stable energy prices and the need for a sustainable transition to a more low carbon emissions economy for the longer-term."

Opec last month cut oil production by 1.5 billion barrels per day to lift the oil price, warning that investment in key production was under threat because of the sharp drop in the price from a high of $147 at the time of the Jeddah summit in July to less than $70 currently. *AP/Reuters