British PM Gordon Brown Expects Saudi Contribution To IMF

Monday, November 3, 2008 at 5:59 pm

British PM Gordon Brown Expects Saudi Contribution To IMF RIYADH: British Prime Minister Gordon Brown said he expects Saudi Arabia to give money to the International Monetary Fund (IMF) to help economies deal with a financial crisis but that it could take time.

“The Saudis, I think, will contribute so we can have a bigger fund worldwide,” Brown told reporters during a stopover in the Saudi capital Riyadh, before heading to the gas-producing Gulf Arab state of Qatar.

Brown is leading a high-level British business and ministerial delegation to Gulf Arab states to seek investment, help on oil prices and funds for the IMF.

Brown has said the IMF needs hundreds of billions of dollars and cash-rich states need to play their part. But government aides said a firm Saudi commitment was unlikely this weekend.

“That’s why the prime minister spending hours talking one on one with the king of Saudi Arabia is so important,” British business minister, Peter Mandelson, told reporters.

“They’re getting each other on to the same page of analysis and agreed response and Saudi Arabia’s active participation in getting the world through this first financial crisis of the global age – but that’s a process not an event.”

Brown held out the possibility that other Gulf states would help the IMF. “I think people want to invest in helping the world through this very difficult period of time,” he said.

Saudi Arabia, the world’s largest oil exporter, and other Gulf Arab energy producers have seen an economic boom in recent years due to high world oil prices, which nearly hit $150 a barrel earlier this year.

But oil markets have fallen due to the global credit crisis, and oil producing group OPEC has agreed to cut production to try to hold up prices, now below $70. Saudi Arabia fears this could threaten some development projects.

A senior British government source said the Saudis were reluctant to be seen as “milch cow” for the world economy.

Saudi Arabia has avoided setting up a sovereign wealth fund partly out of concern for provoking a negative reaction among its Western allies, but its central bank has substantial investments in public equity markets.

The United Arab Emirates has the largest such fund, the Abu Dhabi Investment Authority (ADIA), with assets of $500 billion to $1 trillion.