Sign in Register
Posted On: 24 November 2008 08:36 am
Updated On: 12 November 2020 02:09 pm

Defer all important fiscal decisions, urges expert

Paper Boy
Paper Boy
Discuss here!
Start a discussion
DO NOT make any major financial decision for at least six months to a year and strictly avoid investing in global institutions weakened by the financial crisis. This is the advice Prof Ibrahim Oweiss would give if GCC governments asked him for an opinion. The distinguished academician and visiting Georgetown University Qatar professor was participating in a policy discussion-event organised by the Brookings Doha Centre yesterday. “There is a crack in the world economy that is so wide … no amount of money can fill it. The $700bn and similar amounts in euros couldn’t do it while these Sovereign Wealth Funds (SWFs) held by GCC governments are simply miniscule,” said Prof Oweiss, who has taught at the Georgetown University, Washington DC since 1967. “Investing in global financial institutions thinking they have hit the rock bottom is not wise at all. No one knows the full extent of this recession,” he added. The discussion was entitled ‘The Global Financial Crisis and the GCC’ and Oweiss was joined on the panel by Al Jazeera Network’s business anchor Nadim al-Mallah. Brookings Doha Centre director Hady Amr moderated. With oil prices expected to slide further down, the situation in Kuwait and Dubai having already blown out, Oweiss believes that a realistic approach across the GCC would be to “hold on to whatever you have”. Quoting former US Federal Reserve chairman Alan Greenspan, who said “this coming depression will make the great depression of 1920 miniscule”, Oweiss noted that for now every one can see the tip of the iceberg only. Earlier, he dealt with how the planet came to this bleak situation and signalled-out “wrong policies of US President George W Bush”, but stood firm with capitalism. “The current financial crises and I call it crises with an ‘e’ was the result of Bush’s policies; where the US entered a war in 2003 after inheriting a surplus; where Bush chose to reduce government revenues by reducing taxes, while expenditure was on the rise. This led to enormous public debt,” he explained. The public debt in the US is now estimated to be around $14tn. “In the name of unbridled individualism and capitalism, many institutions were left without regulations, causing what we have today. “However, capitalism will remain because it essentially means that every one has the right to own capital. It also remains compatible with all religions,” Prof Oweiss said. The only thing to be changed, he said, was “the American brand of capitalism”. Prof Oweiss also hoped that US president-elect Barack Obama play the same role that Theodore Roosevelt played in the 1930s – that is to create demand for manpower. Over the weekend, Obama announced plans to try to create 2.5mn jobs over the next two years. “That is needed to create opportunity for the manpower. His government will have to play that greater role,” Prof Oweiss added. Al-Mallah later highlighted the insufficient number of specialised people in the economic media, needed in the region. He also said very little space and time is dedicated to the economy in Arab news. “The lack of disclosure and transparency in the Arab region makes it difficult for media to report. So far no one in the GCC has come out with their reports on future outlook,” al-Mallah said.