AMMAN: Chairman of the Arab Monetary Fund (AMF) Jassem Mannai told a gathering of Arab finance ministers, central bank governors and heads of Pan-Arab lending agencies that the impact of the world economic crisis on the Arab world was “limited” compared with other countries and regions of the world.
“Economic indicators show that the effect of the crisis on the Arab world has been limited, the worst is over and we are recovering,” Mannai said at the meeting which concluded yesterday at the Dead Sea resort.
However, the AMF chief said that the “situation differs from one country to another as it is impossible to generalize and say that Arab states suffer from deficits...some of the Arab countries still enjoy good financial surpluses.”
He said that Arab states were “adapting” to the new situation and they will overcome the crisis quickly thanks to the prudent fiscal and monetary policies and the supervision exercised by the central banks. Furthermore, Arab countries reacted swiftly to the global crisis by increasing public expenditure, which was expected to ensure the continuation of positive economic growth rates in the Arab region.
“Such policies helped to protect banks from falling into the problems other banks in the world faced. Todate no Arab bank has gone bankrupt like other banks in the United States and other countries,” Mannai said.
Abdullatif Hamad, board chairman of the Kuwait-based Arab Fund for Economic and Social Development (AFESD) said that extensive Arab cooperation was imperative for dealing with the offshoots of the crisis which he said had led to the shrinkage of oil earnings and reduced the flow of investments in the region.
He believed that the volume of investment portfolios of Arab sovereign funds and financial reserves had dropped by 30-50 percent as a result of the crisis.
