Last rant on the G20 Summit

Apologies for the hiatus. I was planning to write a long wrap-up post about the G20 Summit, but the week after my London trip was hectic and it’s too late now. Instead, I will link to some of what my fellow bloggers wrote.

The only thing that I want to add here is regarding the Saudi contribution to the IMF. I attended the press conference of British PM Gordon Brown where BBC Arabic asked him about this and he totally ignored the question. Later on the same day, I had a chance to ask the same question to Michael Froman, deputy assistant to Obama and deputy national security adviser for international economic affairs. He said Saudi Arabia did not publicly announce how much they plan to contribute to the IMF.

Read more from G20Voice bloggers:

Overall, attending the G20 Summit in London was a great experience, and the G20Voice bloggers were awesome. The best part was probably attending the Obama press conference. We had to stand in line for 90 minutes to get in, but it was worth it. Here’s my favourite moment from the event:

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.