World - West seeks Gulf's petro dollars

Atul Aneja


Brown wants help to beef up IMF’s $250-billion bailout fund


DUBAI: The energy-rich Gulf countries are being flooded with visitors from the West who are seeking funds to contain the international financial crisis.

On Saturday, Saudi Arabia received British Prime Minister Gordon Brown, the latest among the string of high-profile visitors who are seeking substantial doses of petro-dollars to treat their ailing economies. Later on Sunday, Mr. Brown would be travelling to Qatar, before arriving in the United Arab Emirates on Monday.

U.S. Deputy Treasury Secretary Robert Kimmitt has already visited the region, seeking investments for the troubled U.S. economy. Ahead of his visit, Mr. Brown has been quoted as saying he was seeking funds from China and the Gulf to beef up the IMF’s $250-billion bailout fund. These visits precede the meeting in Washington on November 15 of G-20 leaders, which include Saudi Arabia’s King Abdullah. The conference will discuss a restructuring of the international financial system, including the IMF. Analysts point out that in order to succeed, Mr. Brown might have to reconcile his differences with the energy-rich countries over oil pricing.

Oil pricing


He had opposed the recent decision of the Organisation of Petroleum Exporting Countries (OPEC) to slash daily production by 1.5 million barrels to shore up falling oil prices.

Last week, OPEC’s Secretary-General Abdalla Salem El-Badri expressed his surprise that OPEC countries, which produce around 40 per cent of the world’s crude, were being asked for help by keeping prices down. OPEC members are also not convinced they should help in defusing a crisis that originated in the U.S.

Despite their reservations on donations, some of the key players in the Gulf countries are, nevertheless, scouting for good commercial bargains in the West. On Friday, it was announced that Sheikh Mansour bin Zayed Al Nahyan, who belongs to the Abu Dhabi royalty, had pitched $5.6 billion of his personal fortune into Barclays, the second largest British bank. Combined with a substantial investment by Sheikh Hamad bin Jassim Al Thani, chairman of Qatar Holding, the two have now acquired a powerful one-third stake in Barclays.

With Gulf funds in critical demand, editorials in the local media have begun to appear noting that unlike the past, Western establishments, facing a financial crisis, are no longer blocking Arab investors in their countries on security grounds. Commenting on the Barclays deal, the Saudi daily Arab News said: “It is so very different to the situation a couple of years ago when a public outcry in the U.S, largely whipped up by the Congress, forced Dubai Port World to sell the six American ports it had bought from British-based P&O because of security concerns about Arab ownership of ports in the U.S.”