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BRITISH Prime Minister Gordon Brown has claimed success in his attempt to persuade Saudi Arabia to help stricken economies by pumping more into the International Monetary Fund.
"The Saudis will, I think, contribute so we can have a bigger fund worldwide," Mr Brown said following a weekend visit to the oil-rich capital. But he has been warned not to treat Saudi Arabia as a "cash cow", because it has its own plans to spend the billions generated by the oil price surge. Mr Brown did not disclose the scale of the Saudi pledge, saying the figures would be revealed at the summit in Washington in the middle of this month. British officials have been urged by the Saudis not to make too large a claim on the windfall profits made during the period of exceptionally high oil prices. Mr Brown previously called for hundreds of billions to be made available by the Gulf states for countries whose economies are in peril. Privately, Saudi officials have said that in recent decades the kingdom has failed to invest in the country's infrastructure and public services, and now wants to rectify this. They intend to invest in education and skills, as well as improve the living conditions of ordinary families. The domestic priorities of Saudi Arabia could well come before helping Western economies that have been put at risk by the global economic turmoil. "Saudi Arabia does not want to be seen as a milch cow," a senior British government figure said. At a three-hour meeting with King Abdullah on Saturday, Mr Brown secured his agreement to attend the summit on November 15 to discuss reform of the international financial system. The pair dined, then talked at length through an interpreter. Peter Mandelson, the newly appointed British Secretary of State for Business, who was also at the dinner at the royal palace, said Mr Brown wanted to ensure the Saudi king was "on the same page" over the causes of the global financial problems and the solutions. "We are seeking buy-in from Saudi Arabia and other Gulf states to the necessary response that we all need to make to the turmoil of the international financial system. If we don't get that money, we will fail," Mr Mandelson said. The economic downturn has made the West more dependent on the Gulf states because of the huge reserves of money they hold in sovereign wealth funds. The visit comes days after Barclay's Bank announced pound stg. 3.5billion ($8.3 billion) of investment from Abu Dhabi's ruling family and pound stg. 2.3 billion from Qatar, where Mr Brown arrived on Sunday. He is accompanied by 27 British business leaders from banking, energy and construction, who are looking to invest in the region. The Times November 04, 2008
Sam Coates, Riyadh
Source: The Australian
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