Saudi World Bank representative calls for global financial reform
June 29, 2009
Saudi Representative to the World Bank Abdulrahman Al-Mofadhi called for the reform of international financial markets and institutions in order to reverse the decline in global trade and investment and to revive credit markets.
Addressing a high-level United Nations meeting last Thursday convened to discuss the financial crisis, Al-Mofhadi recommended a strengthened regulatory environment drawing on “international best practices, including the risk-reducing safeguards offered by the Islamic financing model.” He blamed the current economic downturn on “excessive leverage and risk-taking in a lax and inadequate regulatory environment.” Al-Mofadhi noted that the need to reform the Breton Woods economic system and to create a more equitable arrangement is “recognized now more than ever.”
Al-Mofadhi praised the actions taken by the Group of 20 (G-20) nations during their last two summit meetings, but insisted that more must be done. “For its part, Saudi Arabia has approved a five-year $400 billion stimulus to boost the Kingdom’s economic capacity and shield it from the crisis,” he said.
Furthermore, Al-Mofadhi expressed concern over the threat that the financial crisis poses to developing nations and called for wealthier countries to provide assistance. “Saudi Arabia has long acted on the principle that successful economic and social development is in the collective self-interest of the international community,” he stated. “Saudi Arabia regards itself a developing country and its development assistance continues to demonstrate solidarity with other developing countries.”