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That’s what many international agencies have been telling oil-rich Gulf nations for months. But does the region have funds to spare?
December 1, 2008 10:45 by kippreport
The Gulf Arab states should give more development aid to poor nations and raise transparency if they want a bigger voice on the world stage, Salil Shetty, director of the UN’s Millennium Campaign told Reuters in Doha on Sunday.
“If Gulf States are serious, let’s have some cash down,” Shetty said. “I think they need to step up a lot more than they have and they need to become part of the global process because right now they’re kind of isolated. They’re not part of the mainstream discourse and they need to get there,” he added. The UN’s Millennium Campaign aims to halve extreme poverty and boost life expectancy by 2015.
Since the financial crisis began affecting markets around the world, several countries have begun to look at the oil-rich Middle East as a possible savior. Recent events have only strengthened the belief that the region is awash with wealth. These include the $20 million bash at Atlantis, The Palm hotel in Dubai’s Palm Jumeirah in November; the creation of a new mortgage lender in Abu Dhabi; and the strong reassurances by Saudi’s King Abdullah that the kingdom’s economy is in good condition. All helped to assure the world that the Gulf is relatively unaffected by the meltdown.
However, not all is as rosy as it looks. Nakheel, the Dubai developer responsible for the Palm and the World islands, has just stalled some of its projects and laid off 500 of its employees. Other developers including Damac, Omniyat and Better Homes have also cut jobs.
Reports in The Times, a UK-based newspaper said that Dubai was already looking towards its neighbor, Abu Dhabi for a cash injection.
Kuwait and Qatar have also been affected by the meltdown, because of their heavy investments in Europe and US.
While Saudi Arabia has perhaps been the least affected, the country’s stock market, Tadawul, has also fallen considerably. And in spite of Tadawul’s poor performance, officials in the kingdom have said that the country has been a generous contributor to international institutions.
“We have been playing our role responsibly and we will continue to play our role, but we are not going to finance the institutions just because we have large reserves,” Finance Minister Ibrahim al-Assaf told Reuters earlier this month. “These reserves are for the development of the kingdom of Saudi Arabia,” he added.
Some rulers have even hinted that nations who have asked for funds have over-stepped boundaries:
“Sometimes we have a feeling that there are some attempts to put the whole burden of development on the oil-producing countries and in this logic we see some prejudice and disavowal,” said Qatar’s ruler, Sheikh Hamad bin Khalifa al-Thani said last week.
There is no doubt the region will continue to face pressure to provide more funds to economies around the world. But is it being asked for too much?- AN