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Coming with a cap in hand?
Will Britain’s Prime Minister Gordon Brown manage to extract some of the oil wealth from the Middle East during his visit here?
November 3, 2008 11:06 by kippreport
Gordon Brown arrives in Abu Dhabi today, hoping to persuade the region to pump money into the cash-starved IMF. While the ostensible approach seems to be for the greater good of the world, the Prime Minister may have more than just the global economy in mind.
The Times quotes Brown’s spokesman confirming that the sovereign wealth funds (SWF) in the region were an important target for British trade. The paper also says that to avoid taking money from its Treasury, the Prime Minister is bringing 27 senior business leaders to attract further Gulf investment in British companies.
But will Brown’s trip be successful? Will he mange to keep his country’s treasury intact by reducing the coffers in the Middle East?
Major companies in the Gulf, like Dubai World, insist that their coffers are still quite full, and that the region won’t be affected by the global crisis. But not all are convinced.
“Middle East investors are facing their biggest challenge in six years as the world’s worst financial crisis since the 1930s threatens to engulf the oil producing nations and slow booming economic growth,” declares a Reuters report. ‘Brown will get nothing, apart from a smile’, the article quotes a market analyst as saying.
But the recent $9.5bn cash injection into Barclays by funds in Abu Dhabi and Qatar hints very strongly that Brown could convince the region to pump more funds into his country’s businesses.
While contributing money to the IMF will possibly win the Middle East a lot of good will from the rest of the world, it is certainly not a monitory investment. Reports say that Brown has been promising the Arab states a “seat at the table” on international bodies. But is that enough to tempt Saudi and the rest of the Gulf to share its vast cash reserves with the rest of the world?