IMF in desperate need of funds
Sunday, 9 November 2008
From Fazle Rashid
NEW YORK, Nov 8: The International Monetary Fund (IMF) has too many famished mouths to feed. It has too little grains to do so. It has already distributed $30 billion to Hungary, Iceland and Ukraine and another $100 billion will go to economically healthy countries having problem borrowing as a result of the turmoil. The IMF's present reserve is $200 billion.
The IMF needs to refurbish its resources as quickly as possible to play its role to rescue nations in trouble. The usual donors like the USA, Britain and other European nations are in deep soup themselves. But the IMF needs fund desperately.
The Arab nations and China, former flushed with oil money and the later with biggest reserve of the hard currency could salvage the tottering IMF.
The irony of the fact that both Arab nations and China have been villified by the west. The west has frequently accused the Arab nations of providing financial assistance to the Islamic 'Jihadists' and China for flouting human rights and refusing to bow down to the dictates of the west in shaping its economic and defence policies. It was once said that the Arab nations had deliberately conspired to raise the price of oil to help the Islamic 'Jihadists' with the surplus money.
Now in a dramatic reversal of the stand, the west is urging Arab nations and China to beef up IMF's resources so that it can assist the nations in distress. Several top ranking politicians from Germany and England flew to the Middle-East to seek assistance for the IMF. The first to travel to Saudi Arabia was the German foreign minister and it was followed by a visit to the kingdom by British prime minister Gordon Brown. Both had the same mission. Robert Kimmitt, US deputy treasury secretary also visited the area in a bid to promote investment in the US economy.
The trips illustrate the rising prominence of the Arab Gulf which includes big oil producers and important western allies. Brown said Saudis will contribute to the IMF so that we can have a bigger fund worldwide. The oil producing countries of the region have generated more than $1000 billion ( repeat 1000 billion ) from higher oil prices in recent years. The British prime minister has been trying to use the coming summit of the G20 to reform the workings of the IMF and boost its funding. Saudi Arabia is the only country of the region who is a member of G20. The kingdom has a hard currency reserve of $500 billion.
The countries of the region like Abu Dhabi and Qatar have provided huge doses of cash infusion to countries and financial institutions in trouble. Barclays bank, for instead, refused to take from the government bailout fund and instead took money from Qatar. The shareholders of the Barclay bank resented the move that the bank was taking investors from Muslim nations.
The Arab nations the UAE, Saudi Arabia, Kuwait, Qatar, Oman and Bahrain would support international financial system and had asked Saudi Arabia to reflect their views in the coming G20 summit. The nations will demand a greater role in the international financial order.
NEW YORK, Nov 8: The International Monetary Fund (IMF) has too many famished mouths to feed. It has too little grains to do so. It has already distributed $30 billion to Hungary, Iceland and Ukraine and another $100 billion will go to economically healthy countries having problem borrowing as a result of the turmoil. The IMF's present reserve is $200 billion.
The IMF needs to refurbish its resources as quickly as possible to play its role to rescue nations in trouble. The usual donors like the USA, Britain and other European nations are in deep soup themselves. But the IMF needs fund desperately.
The Arab nations and China, former flushed with oil money and the later with biggest reserve of the hard currency could salvage the tottering IMF.
The irony of the fact that both Arab nations and China have been villified by the west. The west has frequently accused the Arab nations of providing financial assistance to the Islamic 'Jihadists' and China for flouting human rights and refusing to bow down to the dictates of the west in shaping its economic and defence policies. It was once said that the Arab nations had deliberately conspired to raise the price of oil to help the Islamic 'Jihadists' with the surplus money.
Now in a dramatic reversal of the stand, the west is urging Arab nations and China to beef up IMF's resources so that it can assist the nations in distress. Several top ranking politicians from Germany and England flew to the Middle-East to seek assistance for the IMF. The first to travel to Saudi Arabia was the German foreign minister and it was followed by a visit to the kingdom by British prime minister Gordon Brown. Both had the same mission. Robert Kimmitt, US deputy treasury secretary also visited the area in a bid to promote investment in the US economy.
The trips illustrate the rising prominence of the Arab Gulf which includes big oil producers and important western allies. Brown said Saudis will contribute to the IMF so that we can have a bigger fund worldwide. The oil producing countries of the region have generated more than $1000 billion ( repeat 1000 billion ) from higher oil prices in recent years. The British prime minister has been trying to use the coming summit of the G20 to reform the workings of the IMF and boost its funding. Saudi Arabia is the only country of the region who is a member of G20. The kingdom has a hard currency reserve of $500 billion.
The countries of the region like Abu Dhabi and Qatar have provided huge doses of cash infusion to countries and financial institutions in trouble. Barclays bank, for instead, refused to take from the government bailout fund and instead took money from Qatar. The shareholders of the Barclay bank resented the move that the bank was taking investors from Muslim nations.
The Arab nations the UAE, Saudi Arabia, Kuwait, Qatar, Oman and Bahrain would support international financial system and had asked Saudi Arabia to reflect their views in the coming G20 summit. The nations will demand a greater role in the international financial order.