IMF boss sees rosy future

Ahead of September’s IMF and World Bank annual conference in Dubai, Horst Köhler, the IMF’s managing director has underlined the importance of increased economic cooperation between GCC nations.

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By  John Irish Published  June 8, 2003

Just two months prior to the IMF and World Bank annual conference scheduled for September 23-24 in Dubai, Horst Köhler, general manager of the IMF stressed that a successful economic future for the GCC would depend on greater economic diversification as well as boosting growth through increased foreign investment.

Speaking during a mini tour to Qatar and Dubai to meet GCC finance ministers and central bank governors, Köhler indicated that despite the recent regional uncertainty, he was optimistic that the evolving status quo would open up new challenges and opportunities for reinvigorating growth.

“The authorities [in the GCC] appreciate that strengthening of economic cooperation under sound macroeconomic and structural policies will foster sound and sustainable economic development,” he said.

Despite the conflict in Iraq he highlighted that the region’s economic and social transformation over the last 30 years would stand it in good stead, forecasting that growth could recover to about 4-5% in 2003.

“Large official foreign assets have been accumulated, relatively low external debt levels have been maintained, and infrastructure has been significantly modernized. These are achievements that reflect positively on management of oil wealth, and show the fruits of opening borders to trade, capital, and labor.”

Köhler added that he was hopeful Iraq’s reconstruction would benefit the Middle East in general, but that the GCC nations in particular needed to develop non-oil sectors to address increased unemployment and create a system to alleviate the problems associated with volatile oil export receipts.

“For the Middle East region overall, strengthening institutions, adapting the role of the state to the needs of a modern market-based economy, and creating appropriate incentives for private sector initiative through more liberalized trade and financial regimes, will go a long way toward strengthening economic performance.”

He concluded that the IMF was ready to assist the region in its development process, explaining that the Middle East was an integral part of the world’s economy and a key player in the process of global cooperation.

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