British Prime Minister Gordon Brown said yesterday he expected Saudi Arabia to pump money into the International Monetary Fund, the latest salvo in an ongoing effort to contain the global financial crisis that is also expected to bring a new round of rate cuts this week.
The worst financial crisis in 80 years, which started when a US housing market boom turned sour, has raised fears of recession that one bank official said would spread across the globe, hurting even fast-growing economies in Asia and South America. China was the latest country to fear it might be hit by the downturn, saying it must maintain a fast pace of growth or risk heightening "factors damaging social stability."
Governments have cut interest rates, propped up banks and stepped up state spending to try to spur their economies, but some countries have been forced to turn to the International Monetary Fund (IMF) and other global lenders for help. Mr Brown toured the Gulf ahead of an event-packed week that could see Britain, the euro zone and Australia join a global easing cycle by cutting interest rates and which will be capped by a meeting of the finance chiefs from Group of 20 key economies in Brazil.
Mr Brown urged countries with large financial resources, such as oil-producing Gulf states, to contribute to a new IMF facility and said he expected Saudi Arabia to contribute - after some time.
"The Saudis, I think, will contribute so we can have a bigger fund worldwide," Mr Brown, who was also seeking investment and help on oil prices, told reporters in the Saudi capital, Riyadh.
"The oil-producing countries, who have generated over $1 trillion from higher oil prices in recent years, are in a position to contribute."
He later got a positive reception in Qatar, where Prime Minister Sheikh Hamad bin Jassim al-Thani said the cash-rich state was willing to help tackle the financial crisis.
Earlier in Kuwait, the finance minister said the government would base any decision to support international markets on potential returns and investment opportunities. The IMF, which had $201 billion in loanable funds as of August 28, has offered money to Iceland, Ukraine, Hungary and Belarus to help protect their economies against the crisis. Several other countries are in talks to secure funding. Officials have said funds could run very low if many more countries requested help.
Mr Brown said cooperation on getting the world economy through the crisis could create a new global order - "fairer, more stable and offering greater prosperity for all."
He will meet other world leaders at a summit in Washington on November 15 to press for reform of the financial system.
The summit was called by outgoing US President George W. Bush, whose successor will be chosen next Tuesday, bringing an end to a hard-fought contest between Democrat Barack Obama and Republican John McCain, which appeared to be tilting toward Mr Obama.