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Saudi Economists Accuse IMF of Being Biased against States Owning SWFs

Saudi economists described the International Monetary Fund’s (IMF) announcement to issue the first Global Charter to regulate the worldwide investments of Sovereign Wealth Funds (SWFs), as a new “restriction” on the investments of developing countries.

They said that the developing nations, and the Gulf States in particular, are working towards the establishment of economic blocs, to impose items within the Charter to guarantee the fulfillment of their desired interests in launching the SWFs. They accused the IMF of seeking to achieve US and European interests at the expense of developing nations.

According to IMF official data, SWFs are achieving remarkable growth, with assets currently amounting to nearly $3 trillion, an amount which is expected to reach about $10 trillion during the next five years.

Saudi Arabia is first among the countries with the largest sovereign funds, together with countries such as the UAE, Norway, China, Kuwait, Russia and Singapore.

Osama Filali, Professor of Economics at King Abdulaziz University, described the SWFs as a suitable solution for the protection of developing countries during crises; he said: “Kuwait benefited from these funds during the Iraqi invasion of its territory in 1990”. In most of its decisions the IMF seeks to support the interests of developed countries, such as the United States and a number of European countries, he added.

Abdul Rahman Al Mutawa’, a writer and economic analyst, thinks that the world’s major financial countries are asserting pressure on developing countries, including oil producing countries, to limit the movement of funds into the major industrialized countries.

al-Hayat, London, March 12, 2008

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