WEF Mideast chief ponders Trump, Saudi Arabia and corruption at historic Davos

Mirek Dusek, the head of Middle East and North Africa affairs for the World Economic Forum expects this week’s Davos gathering to be “historic.” (Photo courtesy of WEF)
Updated 22 January 2018
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WEF Mideast chief ponders Trump, Saudi Arabia and corruption at historic Davos

DUBAI: Mirek Dusek, the head of Middle East and North Africa affairs for the World Economic Forum, is anticipating a “historic” annual meeting in Davos this week — and not just because of the presence of President Donald Trump and his big US entourage.
The president’s late and surprising decision to attend the January gathering of the global elite has added extra spice to this year’s event, but Dusek, the epitome of the Davos diplomat, does not want to prejudge the reaction the WEF will give to his “America First” agenda.
“It is a global event, and I’m very happy he is coming. It is important for the international community to learn the views of the president first-hand. But I don’t want to speculate on what kind of reception he’ll get,” Dusek said in an exclusive interview with Arab News.
The American delegation is the most heavyweight since President Clinton was the last White House incumbent to make the snowy trip to Davos in 2000. In addition to Trump himself, virtually the entire US Cabinet is in attendance, including his senior adviser Jared Kushner who has taken an active interest in Middle East affairs.
Dusek did not know whether Kushner’s wife, the president’s daughter and occasional adviser, Ivanka, would be at Davos. Trump is among 70 heads of state or government attending the meeting, which will welcome the biggest ever involvement by politicians at Davos — some 340 political delegates among the 2,500 or so business leaders, economists, academics, intellectuals and media that attend the event.
That reflects the WEF’s recent relabelling as an “international organization for public-private cooperation,” Dusek explained. “It means we are paying even more attention to working with decision-makers across the world. We are living in an evolving global environment, and if you want to make a dent in the big issues, you have got to have a multi-stakeholder model. We’re building our capacity to work with governments and political leaders,” he said.
Does that mean the 47-year-old organization, which began as an Alpine forum for accountants who also liked to ski, is morphing into the World Political Forum? “We are fulfilling our mandate for public and private cooperation and beefing up the political aspect,” Dusek said.
His role is to handle the MENA region within WEF’s global agenda. An Arabist, he worked for a time at the US Embassy in Baghdad before he joined the WEF in 2007. Reflecting the increasing interest by the WEF in the Middle East’s complex affairs, he now sits on the WEF executive committee.
Davos 2018 will be historic in another aspect too, he said. “We are really seeing engagement deepen from the economies and countries of the Middle East. There is an even stronger delegation this year from Saudi Arabia,” he explained, reeling off a list of ministers, ambassadors and business leaders from the Kingdom.
That is not surprising, given the momentous events that have been taking place in Saudi Arabia under the Vision 2030 strategy, which is in the process of transforming economic, social and cultural life there.
“The WEF is here to support the reform program in Saudi Arabia. We believe we can help improve the Kingdom’s global economy competitiveness, especially in view of the changes underway in the ‘fourth industrial revolution’ (4IR — the WEF’s shorthand for the economic changes brought about by the digital and communications industries).
“We also support the strategy of closing the gender gap, which is an issue we’ve been involved with at WEF for many years. It’s a core issue for the Kingdom, which will require a lot of thought in implementation,” he added.
The anti-corruption campaign underway in the Kingdom, aimed at driving out graft and fraud that costs the economy billions of dollars, will also feature at the Davos meeting. The WEF has for several years been running its own anti-corruption campaign called PACI (Partnering Against Corruption Initiative) to encourage transparency in business and the public sector, especially in emerging markets.
The Saudi finance minister, Mohammed Al-Jadaan, will attend one of the PACI sessions, Dusek said. “We are looking at how we can be helpful to the anti-corruption efforts by Saudi Arabia, as we have been with other corruption cases around the world,” he added.
The WEF is keen to expend its involvement in the region as a whole, and with the Kingdom in particular. “We’ve made many consultations with our partners in Saudi Arabia, and we believe it would be an excellent milestone in our relationship if we were to help stage an event there. We would be very open to the idea of an impactful or high-level summit in Saudi Arabia.
One possibility would be a satellite office for the 4IR hub the WEF recently launched in San Francisco, California. Several global centers are being considered as offshoot offices for 4IR — in Bahrain, India, Japan and Rwanda among others. The Kingdom’s new project to create a fully automated mega-city, Neom, would appear to make it a natural site for one of them. “I would not discount that,” Dusek said.
Given the region’s critical role in world affairs, the Davos meeting is also an opportunity to discuss the foreign policy of Saudi Arabia and the rest of the region. The Kingdom’s foreign minister, Adel Al-Jubeir, is expected to attend, as is the Saudi Arabian ambassador to the US, Khalid bin Salman. “It is important to have a view from Saudi Arabia on how they see the world,” Dusek said.
Regional partners, and rivals, will also be represented at Davos. The UAE is sending a big delegation under Mohammad Al-Gergawi, minister for Cabinet affairs and the future, and Minister of State for Foreign Affairs Anwar Gargash, and there will be in total eight heads of state from regional governments, including King Abdullah II of Jordan.
A delegation from Qatar — still in deadlock with some of its Gulf neighbors over allegations of terrorism funding — will be led by senior ministerial figures, while Dusek said it was “unclear” who would be attending from Iran, also at loggerheads with Saudi Arabia and other Gulf countries over foreign policy.
The WEF has in the past attempted to help conflicting parties to find common ground in foreign disputes, most notably in Libya and Palestine. Dusek said there were a number of sessions relating to the international relations of the region, but nothing officially in the week-long program that amounts to a “peace conference” for Gulf rivals.
“It is important for the WEF to act as a platform to talk about important issues and help decision-makers with their diplomatic efforts. It is a goal and a duty of WEF to facilitate them in decreasing tensions on the political front,” he said.


Pakistani central bank lifts interest rate as inflation bites

Updated 20 May 2019
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Pakistani central bank lifts interest rate as inflation bites

ISLAMABAD: Pakistan’s central bank raised its key interest rate to 12.25% on Monday, warning that already soaring inflation risked further rises on the back of higher oil prices and reforms required for a bailout from the International Monetary Fund.
The 150 basis points increase follows a preliminary agreement last week with the IMF for a $6 billion loan that is expected to come with tough conditions, including raising more tax revenues and putting up gas and power prices. It was the eighth time the central bank has increased its main policy rate since the start of last year.
With economic growth set to slow to 2.9% this year from 5.2% last year, according to IMF forecasts, the rate rise adds to pressure on Prime Minister Imran Khan, who came to power last year facing a balance of payments crisis that has now forced his government to turn to the IMF.
Higher prices for basic essentials including food and energy has already stirred public anger but the central bank suggested there was little prospect of any immediate improvement.
Noting average headline inflation rose to 7% in the July-April period from 3.8 percent a year earlier, the central bank said recent rises in domestic oil prices and the cost of food suggested that “inflationary pressures are likely to continue for some time.”

 

It said it expected headline inflation to average between 6.5% and 7.5% for the financial year to the end of June and was expected to be “considerably higher” in the coming year. Expected tax measures in next month’s budget as well as higher gas and power prices and volatility in international oil prices could push inflation up further, it said.
It said the fiscal deficit, which the IMF expects to reach 7.2% of gross domestic product (GDP) this year, was likely to have been “considerably higher” during the July-March period than in the same period a year earlier due to shortfalls in revenue collection, higher interest payments and security costs.
Despite some improvements, financing the current account deficit remained “challenging” and foreign exchange reserves of $8.8 billion were below standard adequacy levels at less than the equivalent of three months of imports.
The central bank said it was watching foreign exchange markets closely and was prepared to take action to curb “unwarranted” volatility, after the sharp fall in the rupee over recent days that saw the currency touch a record low of 150 against the US dollar.
Details of what Pakistan will be required to do under the IMF agreement, which must still be approved by the Fund’s board, have not been announced but already opposition parties are planning protests.
As well as higher energy prices that will hit households hard, there are also expectations of new taxes and spending cuts in next month’s budget to reach a primary budget deficit — excluding interest payments — of 0.6% of GDP.
With the IMF forecasting a primary deficit of 2.2% for the coming financial year, that implies squeezing roughly $5 billion in extra revenues from Pakistan’s $315 billion economy, which has long suffered from problems raising tax revenue.

FACTOID

Pakistan’s economic growth is set to slow to 2.9% this year.