Jordan hosts economic crisis talks

Leaders gather to discuss implications of global slowdown on the region.

    Dubai, the region's boomtown, has suffered from the global economic slowdown [GALLO/GETTY] 

    Oil price reached record highs of $147 per barrel in mid-2008, strengthening the Middle East's oil-rich Gulf states cash reserves.

    But oil revenues have fallen sharply amid the downturn and Gulf countries are reaching into their huge cash reserves to sustain spending.

    Regional slowdown

    Despite a slight rebound, oil prices remain about 60 per cent below last year's record and the fall has limited GCC country's generous entitlement programmes at home and their investments abroad.

    "In a way they [the Gulf states] are in a better shape than other economies in other parts of the world," Dusek said.

    "But even they have had to take certain measures in terms of business models - on the company level as well as on the indusry level, especially in the financial services industy as well as in the energy industry."

    Multi-billion-dollar mega-projects around the region are stalling, with Dubai, one of the seven emirates that make up the UAE, heavily in debt.

    Even regional powerhouse Saudi Arabia is looking at a major slowdown, heading towards the kingdom's first deficit in years due to increased infrastructure spending.

    Iraq, which needs the money for reconstruction, is also suffering from the fall in oil prices.

    Falling oil revenues

    Overall, the International Monetary Fund has said that growth in Middle East oil exporting countries is likely to slow to 2.3 per cent this year, down from 5.4 per cent last year.

    Among the six-member Gulf Co-operation Council (GCC), of which Qatar is a member, the IMF predicts growth will drop to 1.3 per cent in 2009 from about 3.5 per cent the previous year.

    Sovereign wealth funds from GCC countries, which made headlines last year buying stakes in Western financial institutions such as Citigroup and Merrill Lynch, have seen their investments shrivel in value as global markets slumped.

    Political concerns

    Egypt, the Arab world's most populous nation, is expected to see its economy's growth rate fall to three per cent this year, down from an average of seven per cent over the past three years.

    Egyptian officials are still optimistic, but political analysts have warned about the knock-on effect of civil unrest linked to poverty.

    Delegates are expected to discuss issues such as the volatile oil markets [Reuters]
    In Amman, the Jordanian capital, on Thursday dozens of people gathered for a trade union-backed demonstration against the World Economic Forum meetings.

    A statement issued at the end of the protest urged the government to cancel the meetings because: "They open the door for the Zionist hegemony over the region and impose economic policies contradictory to the rights of the poor."

    Jordan's "professional associations", which represent more than 120-thousand unionists, advised the government "to spend the money allocated for such meetings on the needy citizens".

    Leaders attending the World Economic Conference include Asif Ali Zardari, the Pakistani President, and Shimon Peres, Israel's president. Others include delegates from the US, Iran, Iraq, Morocco, Qatar and Kazakhstan.

    Aside from oil market volatility, the talks are likely to focus on global and corporate governance, the shortage of low-cost housing, the media and the low numbers of women in business in the region.

    SOURCE: Al Jazeera and agencies


    Visualising every Saudi coalition air raid on Yemen

    Visualising every Saudi coalition air raid on Yemen

    Since March 2015, Saudi Arabia and a coalition of Arab states have launched more than 19,278 air raids across Yemen.

    Lost childhoods: Nigeria's fear of 'witchcraft' ruins young lives

    Lost childhoods: Nigeria's fear of 'witchcraft' ruins young lives

    Many Pentecostal churches in the Niger Delta offer to deliver people from witchcraft and possession - albeit for a fee.

    Why did Bush go to war in Iraq?

    Why did Bush go to war in Iraq?

    No, it wasn't because of WMDs, democracy or Iraqi oil. The real reason is much more sinister than that.