LONDON — Dubai is basking in the glory of hosting the annual meetings of the World Bank/International Monetary Fund (IMF) Group. On Saturday, finance ministers of the Group of Seven countries (G-7) prior to the annual meetings of the board of the IMF and World Bank, had their own meeting — a tradition which sets the tone for the rest of the events.
Hardly had the air of frustration and disappointment cleared from the failed Cancun Round of meetings of the World Trade Organization (WTO) two weeks ago, and already the G-7 is ganging up against East Asian countries ostensibly against their tight foreign exchange policies and not allowing the market to set the rates. Why because the current policies are deemed to make US and European exports too expensive. Japan’s economic and financial policies have been wracked by mismanagement and corruption as successive governments continue to serve entrenched political and corporate interests. Japan’s economic interests are not going to be served by forcing Tokyo to liberalize the yen to suit the needs of American farmers and factories in the Midwest.
John Snow, US Treasury secretary and Gordon Brown, the UK chancellor of exchequer, and their European and Canadian colleagues, should know better. The hypocrisy of their agricultural and industrial policies, underpinned by billions of dollars of illegal subsidies, is not only worsening the poverty in many developing countries and driving small farmers to despair and in many cases off the land; but also conveniently ignores the market mechanism. Never the mind the sheer immorality of paying American and European farmers bribes not to work their lands; and others for creating butter and other mountains, which are subsequently destroyed; and others still huge subsidies to keep prices artificially high.
No doubt a cornucopia of issues will emerge over the next few days from the main meetings; the side meetings; briefings; and the motley of conferences that are organized. But what does the host country, Dubai get out of all this, apart from the momentary revenue boost from the 16,000 or so delegates projected to be participating; and the prestige of hosting such an occasion?
The last host of the World Bank/IMF meetings outside the US was Prague in the Czech Republic, an emerging East European democracy headed by the urbane and respected President Havel, a dissident, poet and playwright of international repute during the country’s erstwhile communist era. I remember ministers from both the West and the developing world virtually queueing up to pay their respects to the Czech president in his famous Prague Castle in the old part of the city.
The prestigious Dubai International Financial Center and its associated realty project is a year away from launch - the first phase which will house the DIFC headquarters The Gate, a golden marketing opportunity lost had The Gate been scheduled to be completed in time for the World Bank/IMF meetings when all the major ministers, bankers, corporates, and officials are virtually a captive audience in the emirate.
It will be interesting to see what new strategies “Dubai - a Future Without Oil” produces. Dubai lacks the vision of a Malaysia Inc., especially in terms of human resources development, education, industrial strategy and financial system restructuring. In a post-9/11 environment Dubai should capitalize on issues which directly affect the Arab and Muslim world, apart from the bigger picture of economic management and political representation.
These are the plight of the Palestinians and the so-called “Financial War on Terrorism.” The G-7 countries have already pledged more than $1.2 billion of aid to the Palestinians but this depends on the political strings attached.
Yes, various governments in the Gulf have adopted new anti-money laundering laws. But monitoring and enforcement still lacks organizational and operational conviction and implementation. Not because of government policy but because of serious bottlenecks in qualified human resources and expertise.
Dubai should also be an opportunity to leverage the Islamic banking movement and practice, especially given the fact that Dubai Islamic Bank (DIB), set up in 1976, is the oldest commercial Islamic bank in the world, and that Islamic banking has come under serious but unproven criticism and scrutiny for being alleged conduits for terrorist financing. Whether the General Council of Islamic Banks and Financial Institutions, which is organizing the only Islamic banking conference during the World Bank/IMF meetings, makes any impact remains a moot point. The organizational experience, capacities, and vision of the council, according to several bankers, are seriously deficient.
The meeting of Islamic Financial Services Board (IFSB) on the other hand is technical and targeted, and is bound to influence those participating technocrats at the IMF, World Bank, G-7, and the member countries of the Islamic Development Bank.
— Arab News Business 22 September 2003
