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Financial crisis to top AGCC summit agenda

MUSCAT — The global financial crisis will be at the top of the agenda of the 29th Arab Gulf Cooperation Council (AGCC) Summit, to be held here on December 29 and 30.

The AGCC states are currently striving to create a unified stance vis-a-vis the global financial crisis that would curb its impact on them and would be part of the topics to be discussed at the summit, according to Kuwaiti Deputy Prime Minister and Foreign Minister Sheikh Mohammed Al Sabah.

On the international credit crisis, Sheikh Mohammed said it has been a blow to those who believe adamantly in market forces and unfettered competition and voracious consumerism.

Citing the fact that the crisis started with the US real estate mortgage market and then suddenly morhped into an international debacle, he bemoaned the inability of central banks in the advanced nations to stem the tide of the crisis and its ripple effects in world markets. Infusing the latter with liquidity and sharply reducing interest rates could not avert some well-heeled global financial organisations from going under, he pointed out.

One of the untoward repercussions of this crisis would be, he felt, leading major international investors declining to invest in nascent markets or those of the developing countries for fear that these markets might default on loans advanced to them by these investors. Furthermore, he expected a flight of capital in 2009 from developing countries to the advanced ones, despite the fact that the former had nothing to do with the global financial crisis.

He cited world economic experts and pundits to point out that the poor in developing nations would bear the brunt of the crisis. It is estimated that 160 million of them will be hurled into being classified poor, and about one billion will suffer from hunger, according to the UN organisation FAO.

Addressing the opening ceremony of a seminar on Gulf common market and food security in Muscat last month, AGCC Secretary-General Abdulrahman Al Attiyah said food security in the region would be given top priority at the AGCC summit.