Saudi ex-envoy to IMF: No Honey. No Money.
Saudi Arabia's request is pretty clear cut. More financial contribution should mean more influence. But will the ego of the 'super power' countries get in the way?
January 24, 2012 4:52 by Precious de Leon
Toward the end of the debatably successful Global Competitiveness Forum (GCF) in Saudi Arabia this week, Prince Turki Al-Faisal laid down the Kingdom’s terms when it came to extending a hand to the International Monetary Fund.
“What we can be certain of is that large developing nations will not agree to provide additional funds without a greater say in the IMF’s affairs, and this applies to all global economic governance organisations,” the former intelligence chief and envoy to the US and the UK, told the event delegates on Monday.
Well, this puts IMF in a bit of a pickle doesn’t it? And a pickle that nobody should have a problem swallowing, really. Except we suspect IMF is going to have to do a fair amount of ego-stroking before even considering this proposal.
Tough and undignified the activities that entail ego-stroking may be (we won’t venture illustrative examples today), they’ll need to do it if they want to get some grease for their planned increase in lending capacity by more than $649 billion—most of which will likely go to the aid of the sovereign debt crisis in Europe.
“The financial crisis and great recession were born in the West, developed in the West yet hit hard throughout the world,” Al-Faisal was quoted in ArabNews.
Simply put Al-Faisal is saying “If we have to clean up your mess then we’ve got to have a say in the way our money is going to be handled from now on.”
Understandably, the Kingdom wants to get as much value out of its contribution, especially when they’ve got their own domestic issues to take care of—unemployment, developing infrastructure and improving education, to name a few.
But regardless of where else they could be putting that money, it may not be the folks at IMF who’d really have a say in the matter. It could be hinged on the opinions of the biggest contributor—and the country with the most influence in the funding—which is the US, and how they perceive the impact of Saudi Arabia’s potentially increased influence.
Another school of thought is that that the current contribution of the Kingdom is still comparatively small that it may not really be much of a concern to the super egos right now. According to a report from The National, Saudi Arabia is contributing only 2.94 percent, compared to the US’ whopping 17.7 percent.
Whatever the result of this public request, this is only the tip of the iceberg. The tipping point of economic power is now well and fully heading towards the East and the Middle East. There’s no denying the West can’t simply take the money and run. Dare we say a New World Order? No we won’t, at least not for a while.