A veteran economist expected the Arab region to be key player in a solution to redress the widening public debts and budget deficits in the US and Europe Talal Abu Ghazaleh, chairman and chief executive officer of Talal Abu-Ghazaleh Organisation, said Saturday that debt woes of advanced countries will send the global economy into another yet deeper recession.
He stressed that policymakers in the Arab world should be prepared well not only to weather the storm but also to turn challenges into opportunities as the region is a major market for advanced economies and Arab countries are suppliers of capital and investments.
Arabs should know how and what sectors to invest in, in order to avoid losses they encountered during the 2008 global financial crisis, Abu Ghazaleh emphasised. He indicated that Arab countries should work with other emerging economies to protect their investments and capitals and to transfer the challenges into opportunities.
Late last month, heads of the International Monetary Fund (IMF) and the World Bank warned that the global economy is entering a danger zone, urging world leaders to work on courageous solutions. At separate press conferences at the IMF headquarters in Washington DC, the chiefs of the international financial institutions called on Europe, the US and Japan to address their debt woes before they become bigger problems for the rest of the world.
When the global financial crisis hit the world in 2008, I expected the global economy to head to a deeper economic crisis and then to a more dangerous social crisis, Abu Ghazaleh said. He predicted public movements to sweep the West calling for changing the current international economic system.
Currently, countries with debt ratios that have exceeded safe levels have two options: To reduce debt levels and budget deficits by cutting down on services to citizens or to go bankrupt by maintaining high spending in a bid to protect the luxury of their citizens, the economist explained.
Stating that more loans to indebted European countries will not solve their economic and financial problems, the economist insisted that the unified currency of eurozone will not survive unless pegged to the US dollar. He said serious economic reforms are desperately needed in Jordan particularly as the Kingdom has adopted political reforms.
Jordan is rich with qualified human resources and experts and does not need the technical assistance from abroad to solve its economic problems, he concluded.