São Paulo – The director of the Middle East and Central Asia department at the International Monetary Fund (IMF), Masood Ahmed, said on Sunday (8), in Dubai, United Arab Emirates, that the continued decentralisation of investment by the oil exporters is soothing the impacts of the international crisis on the region.
"For the oil exporters, the decline in oil prices and OPEC (Organisation of Petroleum Exporting Countries) production cuts are projected to reduce oil export receipts by almost 50 percent in 2009. This implies a loss of government revenue to the tune of US$300 billion compared to 2008," said Ahmed, in a press release disclosed by the IMF. "Nevertheless, most governments—especially those in the GCC—have so far indicated that they will maintain their spending and investment plans," he added.
The Gulf Cooperation Council (GCC) includes Saudi Arabia, Bahrain, Qatar, the United Arab Emirates, Kuwait and Oman. The IMF estimates that the economies of the countries that export oil in the Middle East and North Africa should grow on average 3.6% this year, against 5.6% in 2008.
Ahmed pointed out that despite the visible deceleration in growth, it is being minimised by the specific conditions of the region, specially the great volumes of foreign currency reserves accumulated in recent years by the great exporters of oil. Apart form the nations of the GCC, the group of exporters also includes Algeria, Yemen, Iran, Iraq, Libya and Sudan.
The director of the Fund stated that maintenance of expense policies and investment should result in a current account deficit of US$ 30 billion for the oil exporters this year, against a surplus of US$ 400 billion in 2008. He added, however, that for most of these nations, the situation may be comfortably sustained by the great volume of existing reserves.
"Thus, by continuing to spend, oil-exporting countries are contributing substantially to supporting global demand and are acting as stabilizers during the global downturn," he added.
This policy of maintained investment should also help other countries in the region that are great exporters of oil, but that have strong economic ties with the producers, like Egypt, Jordan, Lebanon, Tunisia, Syria, Morocco, Mauritania and Djibouti. The IMF estimates that the average growth of these economies should also be 3.6% this year, against 6.3% in 2008, despite the reduction in export revenues, tourism, money transfers by expatriates and higher credit cost.
*Translated by Mark Ament
