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.

The G20 Summit

We are finally at the media center for the G20 Summit. I’m sitting on a long table with the rest of the G20Voice bloggers, and we are expecting a big day here. Everybody is talking about how World leaders are going to fix the global financial system through more regulation and transparency. Also big on the agenda is reforming the IMF and other financial institutions. More updates from here as news starts to emerge from behind the closed doors.

Dubai: Saudis and Britons

I was surprised when I read earlier this week that there are 5,000 Saudis living in Dubai. I’m not sure if this number is big or small, but I don’t think there is a larger Saudi community living abroad anywhere else. I can understand why, though. Beside the booming economy and the glitz, it is a place where they can lead a more normal life compared to the stifling, restrictive one back home. It is also just next door in case they needed to visit or return.

Many people in the Gulf feel that their countries are trying to catch up with Dubai, but not everyone is keen on remaking the Dubai story. A Saudi columnist recently wrote that we should not compare ourselves to Dubai because it is “too open” and we simply cannot — and should not — do the same.

However, many Saudis who live in the rapidly growing emirate quickly responded to him, passionately defending their new home and saying it could be true that Dubai is welcoming the world with wide open arms, but it is also offering choices their own country did not give them; better opportunities and much, much more freedom: no one would force you to live your life according to their whims and wishes.

The Daily Mail ran a long piece yesterday on the bad behavior of British expats in Dubai and how it could cause a backlash and a rise of religious extremism, suggesting that an act of violence would burst the D-bubble. So between the Saudis who want to enjoy a normal life and the Britons who move there to go wild, how can this city keeps its leadership in the region, economically and socially, and how its rulers will deal with the pains of growth?

Doing Business in Saudi Arabia is Easier

The World Bank has recognized Saudi Arabia as one of the top reformers in its most recent ‘Ease of Doing Business‘ report, ranking it at 23rd position jumping from its 38th last year, and making it the best place to do business in the entire Middle East. “Saudi Arabia eliminated layers of bureaucracy that had previously made it one of toughest places in the world to start a business,” the report said.

Great work by Amr Al Dabbagh and the people at SAGIA. I have to admit that I was very skeptic when I first heard him talking about making the Kingdom one of the top 10 most competitive countries in the world by 2010, but now it is obvious we are on the right track here.

Congratulations to all the people who worked on this. Keep up the good work!