- Special Pages
DOHA: Many countries in the Middle East need International Monetary Fund’s (IMF) support to avoid the high unemployment rate and the region’s sluggish growth scenario.
Concerted efforts are needed to boost confidence and reduce uncertainty in the region, Obaid Humaid Al Tayer, Minister for Financial Affairs of the United Arab Emirates (UAE) said while addressing the International Monetary and Financial Committee’s 26th meeting in Tokyo yesterday.
Speaking on behalf of over a dozen countries, including Qatar, the United Arab Emirates (UAE), Bahrain, Kuwait, Oman, Egypt, Iraq, Jordan, Lebanon, Libya, Maldives, Syria and Yemen, the UAE Minister said the Middle East was facing risks from continued difficulties in the global economy as well as from regional tensions.
“While continued high oil prices have positively impacted the economic performance of oil exporters, these countries may need to adjust polices in response to a significant decline in oil prices. These countries would welcome Fund supporting further developing their financial infrastructure as part of measures to support growth’, he said.
In many oil importing countries, increased spending on fuel and food subsidies, along with pressures to raise wages and pensions, is straining public finances. Better targeting of subsidies will ease these strains, the UAE minister said.
However, these reforms will need time to design and implement, and due consideration of social and political factors need to be taken into account in devising them to ensure that public finances are on a sustainable footing, the UAE minister added.
Al Tayer noted uncertainty has more detrimental effects on economic performance in emerging economies than in advanced economies.
Therefore, concerted efforts are needed to boost confidence and reduce uncertainty, he said.
“The Fund should further strengthen its analytical work in areas relevant to the region, including the challenge of high unemployment and the social impact of subsidy reforms. Fund-supported programmes
should demonstrate better understanding of the political economy constraints facing countries and pay due regard to domestic priorities. Substantial Fund financial and technical assistance
should be provided to assist the countries in transition to meet their economic challenges and support restoring growth”.
The UAE Minister said IMF has successfully mobilised resources to address risks to global economic and financial stability.
However, while it is important for the Fund to maintain sufficient reserves, we went along with the majority in supporting the use of the remaining windfall profits from gold sales to subsidise lending to low income countries.
The Fund analysis needs to take into account employment issues and the social aspects of policy measures in programme design, he said.