2023-11-25 07:19:48
At the last annual meeting of the International Monetary Fund (IMF) and the World Bank, which hosted ministers and economic leaders from around the world in Marrakech in October, representatives of the Gulf countries took center stage . At the round table devoted to Qatar, the Minister of Finance, Ali Bin Ahmed Al Kuwari, recalled that his country was committed to global financial stability and that it had also helped Argentina to respect its commitments to -vis the IMF.
As for the Saudi Finance Minister, Mohammed Al-Jadaan, he was invited to give his opinion on the debt crisis of poor countries alongside Kristalina Georgieva and Ajay Banga, the heads of the IMF and the World Bank. Riyadh, the capital of Saudi Arabia, will soon host the first IMF office in the region, following an agreement signed in October 2022.
The Gulf countries are also strengthening their commitments to the institution through financial contributions to funds such as the Resilience and Sustainability Facility or the “food shocks” window intended to help low-income countries. “The region is increasingly channeling its international aid through the IMF, at the same time as it wants to be more visible and present on major international issues,” recognizes Jihad Azour, head of the institution for Central Asia and the Middle East.
A new strategy formulated in January by Mohammed Al-Jadaan during the Davos Economic Forum (Switzerland): “While we were providing grants and loans with no strings attached, we are changing policy by now working with multilateral institutions and telling recipient countries that we want reforms. »
Crucial financial assistance
The only region in the world to generate budget surpluses thanks to oil revenues, its financial aid is crucial, while half of low-income countries are threatened by debt. Saudi Arabia, for example, spent 1.01% and 0.74% of its gross national income on development assistance in 2021 and 2022, compared to an average of 0.33% and 0.36% in the countries of the Organization for Economic Co-operation and Development.
“Bilateral aid provides a lot of visibility to the donor country, but it is most effective through the IMF because it draws on its expertise and comes with recommendations on economic policy,” underlines Tim Callen, researcher at the American think tank Arab Gulf States Institute in Washington. The Gulf countries have provided billions of dollars to help Egypt, Pakistan and Jordan. “They undoubtedly understand that financing a country without a reform program is ineffective,” estimates Clemence Landers, researcher at the American think tank Center for Global Development.
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