Arab economy safe, 'ready to bear any shock'
Abu Dhabi, September 8, 2011
Arab finance ministers have shrugged off any threat to their economies from political upheaval and a global slowdown, saying ample cash reserves and mutual support would ensure they withstand new shocks.
The 22 ministers promised to help each other out. 'This is a clear expression of the intention and tendency of Arab countries to help their brothers,' said Obaid Humaid Al Tayer, Finance Minister for the UAE, which hosted the meeting.
Egypt, where the economy was hurt by the uprising that toppled Hosni Mubarak earlier this year, is negotiating aid from other Arab countries.
Finance Minister Hazem El Beblawi said Egypt was close to striking a deal with the UAE, Saudi Arabia and the Arab Monetary Fund for several billion dollars in loans.
In June, Egypt rejected a $3 billion loan offer from the International Monetary Fund and World Bank but Beblawi said IMF assistance was still an option.
'The main problem is for stability to return, which will reassure investors from the inside and outside - basically a return to normalcy, which we are getting close to rapidly,' Beblawi said.
Arab governments have handed out billions in an effort to create jobs, counter rising living costs and foster stability among their citizens.
Some economies have gone into deficit, however, and the key for oil-producing Arab states is whether the global slowdown will hamper demand, sending oil prices lower.
Saudi Arabia plans to spend more than $130 billion in handouts.
Finance Minister Ibrahim Alassaf said there were risks to its exports should the financial crisis in Europe lead to slower economic growth, but it could also present opportunities for investors.
The UAE, which suffered from the 2008-2009 global crisis, forcing investment conglomerate Dubai World to seek a debt standstill, said it was in a comfortable position.
'We're confident of the resilience of our banking sector,' the UAE finance minister said after the meeting.
'We always remain vigilant,' Tayer said, adding the country would always act to ensure confidence and liquidity in the UAE banking system.-Reuters