Avoiding the New Mediocre:The IMF,Doha and the New Multilateralism

Madame Christine Lagarde,Managing Director of the International Monetary Fund,addressed the Atlantic Council in Washington on 9 April.She spoke about the "new mediocre" she feels the global economy is falling into for reasons including aging populations and falling productivity growth.Reversing that decline in developed markets takes improving access to finances for SMEs,small and medium-sized enterprises,which represent most of the employment.The same applies to China.In Japan and the euro area,there are too many tax disincentives for them.
In too many countries,legal inequities still exist preventing access by women to the labour market.There are potentially huge global gains to be had by trade reform and integration.Completion of the Doha Round could give an economic boost of a trillion dollars.
The Doha Round is a series of trade negotiations among the World Trade Organization membership.It aims to achieve major reform of the international trading system through the introduction of lower trade barriers and revised international trade rules.The negotiations were named after the WTO's Fourth Ministerial Conference in Doha,Qatar,where they officially began in November 2001.The Doha Ministerial Declaration that came out of the Conference set forth the mandate for the negotiations,including on agriculture,services and an intellectual property topic,which had already begun.
The ministers at the Fourth Ministerial Conference also agreed on how to address the problems developing countries face when implementing the current WTO agreements.A fundamental objective of the Doha Round is to improve the trading prospects of developing countries.
How to dispel this new mediocre that is lurking on the horizon? We can only win by working together,Madame Lagarde insisted.The challenge for policy makers is to combine the policies that create growth with those that boost tomorrow's prospects.If countries strengthen their banks,it will reinforce the global financial system.If they implement climate-friendly policies,it will benefit their people and lower the global level of emissions.There is simply no alternative to the new multilateralism.The emerging markets and developing countries must have a seat at the table.Virtually our entire membership agrees,and they all await ratification by the United States Congress-if only to assert US leadership to a major institution for global financial stability,enhancing cooperation with new institutions in Asia and other places,the integration of dynamic emerging markets into the global economy through:
1.Financing for development.
2.New,sustainable development goals.
3.Addressing climate change.
They all interlink in many ways.How can we contribute on the IMF's three core deliverables?
1.Financing:we recently gave 390 million euros to the Ebola-affected countries from a catastrophe and containment relief trust that was set up.
2.Policy advice and analysis such as on domestic resource mobilisation;the role of inequality;energy subsidy reforms;carbon taxation-the time is right to price it right.
3.Technical assistance and training,such as our Massive Online Open Courses,which range from debt sustainability analysis to removing energy subsidies.Success will require a recommitment to international cooperation.In conclusion,Madame Lagarde quoted Winston Churchill,"I never worry about action;only inaction."

Emirates Chooses Boeing Jets

Emirates Air has ordered 50 more 777 airliners from Boeing for a record 18 billion dollars.The deal includes an option for 20 more 777s,which would bring the total cost up to 26 billion.At the same time,Oman has ordered six Boeing 787 Dreamliners.
Jeff Johnson,President of Boeing Middle East,says Emirates Air aims for global aviation domination.We're sold out for years to come.They want the technology.The Middle East sets the standard for wanting this technology.
The Middle East also hungers for military aircraft.There are big air bases in Qatar,Kuwait and Bahrain.These countries want interoperability with the U.S. military.A 60 billion dollar U.S. arms deal with Saudi Arabia is influenced by the fear of Iran,Mr.Johnson noted.
Boeing(BA)

Finance and Foreign Affairs:The View From Qatar

A leading figure in Gulf states finance and foreign affairs has been reflecting on the recent turmoil in the region.We are thinking the Libyan people didn't deserve this,says Sheikh Hamad bin Jassim bin Jabr Al-Thani,Prime Minister and Foreign Minister of Qatar,who also helps oversee Qatar's sovereign wealth.Most of the problem in the Middle East is the economy.Gadaffi should go,leave the people of Libya decide what they want to do.
We see a lot of movement in Qatar.Some of the big companies are moving into Qatar from Egypt.
Between 5 and 7 years we will finish the Qatar infrastructure.Seventy billion is already allocated for that.The challenge is what to do after that to keep the growth 5-8%.We don't want the growth to collapse in 3-4 years when the work is finished.
Last year we invested more than 20 billion.This year we must invest 35 billion if we have the opportunity.We invested in Washington property,as it is a city that is not affected a lot by real estate problems because it is the capital.We think it's the right time to invest in U.S. commercial real estate.We are also looking at retail and energy in the U.S.
We have to be realistic about the supply and demand for energy.The supply is there,but there is anxiety about the Middle East events.In Asia,we sell our gas 3-4 times what we sell it for in the U.S.;Asia is our natural market,frankly speaking.
With regard to censorship of the Internet,to shut down any technology,I think this is stupid,the British-educated Sheikh Hamad believes.
Through its Delta Two fund,which is headed by Sheikh Hamad bin Jassim and managed by Paul Taylor,the Qatari government has increased its stake in British retailer Sainsbury to just over 25%.This is being seen as another step in a possible takeover of the department store chain.

Qatar Jubilant Over World Cup

Qatar will host the first major sporting event in the Arab world as the 2022 World Cup makes its way to the Gulf state.A joyous crowd greeted the news in Doha,the Qatari capital last week.It was apparently a surprise to all,while Russia had been expected to win its bid to host the 2018 World Cup.
Qatar got a 66 out of 100 points by the technical evaluators,while the U.S. received a perfect score.Frankly,Qatar was considered a high-risk choice.Still,its plan to dismantle the stadiums after the event and rebuild them in less affluent nations could only have enhanced Qatar's appeal.Generosity went a long way,and the world's wealthiest nation in terms of per capita income took the great honor of hosting the world-entrancing football matches.
Credit Suisse estimates Qatar's income to be 109,000 dollars per capita.
Because it is classified as an Asian nation,Qatar's win means China cannot host the World Cup now until 2030 at the earliest.Qatar is located between Bahrain and the United Arab Emirates on the Persian Gulf,with Saudi Arabia to the west.
Credit Suisse(CS)

WTO Director Sees Progress

Pascal Lami,Director of the World Trade Organization,noted progress at the G8 summit in Italy last week:1.solid impetus,solid commitment to push back protectionist tendencies;2.commitment to finish the Doha round of negotiations;3.commitment to keep pushing on open trade,which is what developing nations need.As compared to last year,the U.S. and India have expressed the political will together.There remains a bit of compromising to be done,but their commitment to Doha 2010 is something new,Mr.Lami observed.
The G20 group of developed and key developing nations are to meet in Pittsburgh,Pennsylvania in September.The G8 summit may be considered to have been preparation for what many believe to be the more significant meeting.

Qatar To Aid Banks

Qatar is buying the investment portfolios of seven of the nation's banks,in order to bolster confidence in the resource-rich nation.According to the Doha Securities Market,the portfolios will be purchased with the assistance of Qatar Central Bank by the end of March.To date,Qatar has avoided debt and political strife from the financial crisis,unlike some of its Gulf neighbors.Its economy is regarded as sound.Qatar should continue to experience growth through the downturn.In response to the bank news,the Qatar stock market shot up about 9%.

Looking Ahead From Qatar

We are looking at various banks in the U.S.,Europe and Asia,Sheikh Hamad Al-Thani revealed.Within two or three years,such an investment will get you in the right shape.We are looking at three or four blue chip companies.We are looking at the right time for entry.Dividend is one of the subjects;balance sheets are very important for us.In Qatar,I think we will be O.K. and there will be substantial growth,Sheikh Hamad believes.

Sheikh Manages Sovereign Wealth

Sheikh Hamad Al-Thani manages Qatar's sovereign wealth fund.We are affected by the financial crisis,the sheikh said,but the banking system is still strong;the economy is still strong,thank God.For us in Qatar,our acquisitions are not bad.No doubt there is a tough road.We have two or three quarters to watch it very carefully,the sheikh cautioned.

Gas Cartel Takes Shape

Qatar,Russia and Iran are well on the way to forming a natural gas cartel.Meeting in Iran recently,the countries intend to consolidate the largest gas reserves in the world as well as their general strategic interests,and cooperate on three-party projects.Two more meetings,to be held in Qatar and Russia,will finalize the agreement.The three nations own 60% of the world's natural gas reserves.The European Union is concerned about the cartel,since higher gas prices could result.As oil reserves dwindle,the cartel's natural gas reserves will increase in importance.