Thursday, March 26, 2009

World bank steps in to solve the crisis...some insights from the Lead Economist of World Bank, MENA Region


Dr Auguste Tano Kouamé Says Crisis Offers Opportunity to Revisit Policies and Map Out Inherent Competencies

Self-reliance, confidence in times of stress, and concerted planning and development by governments and the private sector are key points to be adhered to while riding out the current economic crisis, according to Dr. Auguste Tano Kouame, the World Bank's lead economist for the Middle East and North Africa (MENA).

Dr Kouame’s remarks came today at a talk hosted by the Dubai School of Government on the impact of the financial crisis on Arab capital markets.

Addressing senior government officials and policy makers from the region, Dr. Kouame outlined a number of solutions to help the economies of the Middle East and North Africa region shield themselves from further impact. He also proposed action plans that can be adopted by the government and private sector to reduce the negative impacts of the crisis, calling for a good understanding of the potential weaknesses in the financial sector.

Dr. Kouame said: “The global financial crisis that started in the US came on the heels of very high food and fuel prices that were already impacting many developing countries. The financial crisis has now become an economic crisis. Many developed countries are already in recession, and every country in the world is being affected. While many countries in the MENA region were able to avoid a large impact from the first round of the crisis, other countries in the region experienced its impact in quite a significant wave, due to the fact that their financial systems are more integrated globally.

“Going forward, the second round of impact — on the real economy and people — is likely to be significant for all MENA countries. Countries throughout the region and their development partners can respond with policies and expenditure programs that mitigate the impact of the financial and economic crisis while building the foundations for future economic growth in a sustained and inclusive fashion.”

He pointed out that while Sovereign Wealth Funds and petrodollars from the oil and gas industries have shielded many Middle Eastern economies, the global meltdown will continue to challenge heads of state and administrators with fundamental economic issues such as employment and food supply.
Dr. Kouame added that the crisis is particularly crucial in its impact on ordinary people, especially those living below the poverty line, adding that the World Bank can use its capital to help small- and medium-scale enterprises in the developing economies through the usage of its financial assistance programs in partnership with the IMF

Hafed Al Ghwell, Director of External Affairs and Communication, Dubai School of Government, said: “We are delighted to welcome Dr Kouame here today whose views are highly regarded and will prove invaluable for us in the region. Key insights such as his are even more imperative at a time when the world is going through this very serious phase of economic re-structuring that challenges all our previous assumptions of economic development as well as growth models. We are confident Dr Kouame’s key recommendations will help policy makers and governments explore innovative solutions for paving the way to economic recovery in the short term. The credibility and depth of the knowledge base of the World Bank Group is an important tool for the region's policy makers now more than ever .