G-20: Saudi Arabia’s focus on economic policy
There has begun to be an increasing realization among many countries in the group that economic issues must supersede political considerations
The ninth summit of the G-20 heads of government to be held in the Australian city of Brisbane on Nov. 15 and Nov. 16 is different from the crisis meeting held in 2008 to save the world economy from falling into the abyss. But it is of no less importance considering the myriad challenges of tackling widening global inequality, poverty, unemployment and stuttering growth.
Saudi Arabia, the only Arab country in the G-20, and the rest of the group’s member states were able to fulfill their target of supporting measures that placed the world on a more balanced footing. It is a role increasingly valued by economists and decision makers across the world since the Asian financial crisis of 1999.
While the world economy is doing better, there is much to be done, particularly with the tough task of growing the G-20 economies 2 percent by 2018 and creating jobs for the many millions languishing on the fringes of their societies.
There has begun to be an increasing realization among many countries in the group that economic issues must supersede political considerations. Unfortunately, in several parts of North Africa and the Middle East this is not the case. Many leaders have not come to an understanding that a focus on bread-and-butter issues will bring about political stability.
In this context, it therefore comes as no surprise that G-20 leaders will be looking to find ways for the further restructuring of the global economy and refine their roles in achieving this. The issues on the table include financial regulatory policies. The Euro crisis has revealed, yet again, the interconnectedness of the planet’s economies. It is not true anymore that if America sneezes then the rest of the world catches a cold. It is now the case that a meltdown in any one country can cause irreparable harm to the global economy.
Leaders of the G-20 nations must be mindful of this overlap between their economies. Capital markets are so large and fluid that there is a need for greater and tighter overarching regulations, despite the protestations of those who believe in the dogma of completely unfettered markets. Bank licenses, for example, fall under the authority of each state but must still abide by international obligations enshrined in the Basel regulations, in terms of providing loans and dealing in various financial products.
It has become increasingly clear that everyone is in the same boat and that there needs to be collective effort at rowing and steering through the choppy waters ahead. In addition, the added incentive for many is that sanctions and boycotts loom if they decide to go against the flow.
It has become increasingly clear that everyone is in the same boat and that there needs to be collective effort at rowing and steering through the choppy waters ahead.Mohammed Fahad al-Harthi
Every country must realize that they have a role to play in shaping this new world order, if they choose to do so. The kingdom has already shown that it means to do so, as it did in many of the financial crises over the past few years. Crown Prince Salman, the deputy premier and minister of defense, is leading the high-ranking delegation this year.
Saudi Arabia’s role has recently been recognized by the International Monetary Fund, which gave the country a Certificate of Appreciation for being one of the three best-performing economies in the G-20. Studies have shown that the kingdom is one of the world’s leading nations in carrying out the financial decisions of the group.
With the world in such a state of flux, some countries will perform better than others in adapting to change. For those who fail to do so the future looks bleak, with internal divisions and negative growth. It is vital under these circumstances to remind those that lag behind that prosperity and stability lie in sound economic policies.
This article was first published in Arab News on November 12, 2014.
Mohammed Fahad al-Harthi is the editor-in-chief of Sayidaty and al-Jamila magazines. A prominent journalist who worked with Asharq al-Awsat in London and Arab News in KSA, al-Harthi later moved on to establish al-Eqtisadiah newspaper in KSA, in which he rose the position of Editorial Manager. He was appointed editor-in-chief for Arajol magazine in 1997. He won the Gulf Excellence award in 1992. You can follow him on Twitter here: @mfalharthi