Friday, Feb 03, 2012
By Summer Said
Of ZAWYA DOW JONES
RIYADH (Dow Jones)--Saudi officials told International Monetary Fund Managing Director Christine Lagarde that they want a greater share of voting rights at the Fund in exchange for providing financial help, an official from the kingdom familiar with the matter said Friday.
Lagarde told Saudi officials earlier Friday that it was for the greater good of the global economy that fund members contribute to the IMF's $500 billion fund to fight the European debt crisis, a Saudi official said.
"The Saudis said they are willing to contribute if there is a guarantee for more voting rights," he said, adding that nothing will be decided until the meeting of finance ministers and central bankers from the Group of 20 leading industrial and developing nations in Mexico City later this month.
The official Saudi Press Agency reported earlier Friday that Lagarde met with King Abdullah, the Saudi finance minister and the central bank governor and discussed the "world economy."
The agency reported that they reviewed "IMF action and developments in the world economy," but did not elaborate on what was discussed.
Last month, a senior Saudi official said that the kingdom, a member of the G-20, is happy to contribute to the fund "but nothing is for free ... we want more say in the fund."
The IMF has said it is seeking $500 billion in new lending capacity in order to help cope with the effects of Europe's debt crisis. Members of the euro zone have said they will contribute about $200 billion, and the IMF is hoping for contributions from China, Brazil, India and other large emerging nations.
Saudi Arabia, with the world's third-largest foreign reserves, certainly has the cash to spare for the IMF's proposed bailout fund--with wealthier emerging-market countries like the kingdom seen supplying much of the money--to help stabilize the shakier economies of Europe.
Lagarde told Saudi daily Asharq Al-Awsat in an interview published Friday that the IMF will count on its main member states to provide funding.
"The financial crisis is a global problem, considering its effects on all nations," she said. "It is therefore in the interests of everyone to commit to a track that will ensure an exit to this crisis," Lagarde added.
The Saudi government hasn't officially commented on its view of the IMF bailout fund though Prince Turki al Faisal, a former Saudi ambassador to the U.S., said earlier this week in Riyadh that Saudi Arabia and other prosperous emerging nations will want greater influence in the affairs of the IMF in exchange for any contribution.
Other rich emerging economies, such as China, have suggested that they would need either more power at the IMF--perhaps through increased shares at the Fund--or trade concessions from Europe to give money to help the euro zone.
That could complicate any IMF fundraising effort because the leading IMF shareholders, including large European nations, have resisted any suggestion of giving up their power in exchange for more money. The U.S., which has said it won't provide any funds, is the IMF's largest shareholder and can block many major IMF changes.
In an interview in Davos, Switzerland, in January, Saudi finance minister Ibrahim al-Assaf said that any help for European nations would not come directly but via the IMF.
Al-Assaf, who was not available for comment Friday, said last June that the kingdom would like the IMF presidency not to be limited to a certain region and it would support "the best candidate" it sees.
-By Summer Said, Dow Jones Newswires; +966-546-842373; summer.said@dowjones.com
(END) Dow Jones Newswires
03-02-12 1932GMT
