The G20 Summit Update

The mood at the ExCel Conference Center seems to be swinging between optimism and fear that things might collapse at the last second. The uncertainty is the result of the rift between American-British calls for more spending and French-German demands for more regulation. French President Nicolas Sarkozy called for a “global regulator” and said tougher regulation is “nonnegotiable.”

It seems that there are three camps now. First, you have the US, UK, and Japan who are pushing for greater fiscal spending to stimulate their economies. Then you have Germany, France, and probably the Czech Republic, who are pushing in the opposite direction. And finally you have countries like China, Russia, India, and Saudi Arabia, who will consider joining the first or the second camp, depending on where their interests are.

It is expected, though, that these difference will be played down and the final communique will come out in a language that each party can interpret differently.

Now when it comes to reforming the IMF, it is agreed that the need to reform the institution is urgent. However, G20 countries have yet to reach an agreement over the contributions every country will make to help the IMF fight the financial crisis. Thanks to a cushion of reserves Saudi Arabia built during six years of soaring oil price, the country was not hit very hard by the financial crisis, and that’s why the US and UK asked Saudi Arabia to increase its contribution to the IMF.

Rumors circulated last week that Saudi Arabia was considering increasing its IMF contribution in exchange for higher quotas. Finance Minister Ibrahim al-Assaf denied these reports, adding: “What is on the table now is for support from all the major member states of the fund.” Saudi Arabia is expected to contribute $100bn, but some sources suggest that the government prefers to decrease its contribution to $90bn.

Some Saudis think that the government should not listen to these demands. Fawaz al-Alami says it is time for big countries to realize that globalization rules do not give them the right to exploit the resources of the developing countries to fix their failed economic policies.

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21 thoughts on “The G20 Summit Update

  1. Hi Ahmad, wish you all the best…& enjoying your reports so far.
    I just can’t help but wonder what is the point of choosing a Saudi/Arab blogger to be part of this “G20 blogging Voices” idea if he will not be blogging in his native language? I realize that Arab blog readers do read in languages other than Arabic but, this just doesn’t seem to be logical to me. Just a thought.

    I hope you can get a chance to reach some of the protesters and report on the event from their view.

    Enjoy & be safe :-)

  2. I believe and no one will listen that the smaller countries can have a big say over those idiots that took us into this abyss. People what is going on is not a dive in the red sea, it is more like the Titanic sinking. When are we going to learn not to follow so blindly? Time to grow your own food gardens I say.

  3. It’s intriguing how humans themselves initiated the crisis (by many factors which i’m too lazy to write), and now they’re gathering to overcome it.
    Creatures that love drama, believe in karma, no wonder god preferred this race, they’re interesting.

  4. I would welcome thoughts on the utility of a document [the final communique] when “the final communique will come out in a language that each party can interpret differently.”

    This raises the issue of the utility of this discussion.

    Ahmed, do you think the value of this meeting lies in the documents agreed to?

    Or, perhaps the value of this lies in the opportunities for discussion by leaders, even if no written agreement is achieved?

    Of, perhaps there is value elsewhere?

  5. Why in the world would Saudi Arabia contribute 100 billion dollars to IMF??!! would not much money is better spent at home….just doesn’t make any sense to me….

  6. g20 is nothing but a waste of time money and airtime on news channels. It solves none of the world problems and nothing just a photo shoot of rich leaders.

  7. 90 b…. I do not now much about economy but we need that money urgently nowadays in Saudi. The country is growing and in a building phase. Plus why did not the country invest that money instead of just lending it ….. oh Saudi is not going to develop … It has had the money before Malaysia now look at the difference between the two countries…..

  8. Linguist:

    If you comparison is between our country and Malaysia, I would agree that the differences are indeed stark and profound.

    A key portion of that, I would assert, is the incomparably greater level of intellectual and creative freedom that exists in Malaysia.

    In Kuala Lumpur, there exists a far, far greater degree of every form of personal liberty.

    One can see that on a global stage Malaysian literature or art exists and is respected, although it is still small.

    Our country does not enjoy similar levels of achievement.

    Of course, the very liberties that exist in Malaysia would be deeply opposed by our clerical establishment.

    Malaysia treats its people as adults capable of making decisions for their own lives.

    Our clerical establishment, in contrast, believes that we are children to be denied intellectual freedoms, lest we err.

  9. salam alikom Ahmed ,
    welcome back ,hope u was doing great coverage there ,they said tht world Economy may be improved by year 2010 , in fact, i dunno if world reach 2 tht peak point or there’s still a time >

  10. Anon,
    Saudi Arabia should contribute to the IMF because they have the money to. Saudi contributing to it also means they can have a greater say in how it’s run, stopping it from being so Western-centric.

    Andrew,
    From what I can see, only one of the three targets have been achieved – raising more money for the IMF. There hasn’t been any agreement on fiscal stimuli and there hasn’t been any agreement on the regulation of banking.

  11. Shafiq:

    Your point raises the important question: does the IMF actually require more money?

    Absent any other agreements, what was the utility of this meeting?

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