Media Contact:
Lamia Bahy -2291-3509
Dina Al-Gharabally 2291-3508
In Washington, DC
Merrell Tuck +1 202 415-1775 KuwaitCity, February 3, 2009— Under the patronage of the Kuwait Bankers Association (KBA) and in cooperation with the World Bank Country Office in Kuwait, a symposium entitled, “The Global Financial Crisis and its Aftermath” was held Tuesday, February 3 at the Kuwait Chamber of Commerce. Speaking at the symposium was the World Bank’s Senior Vice President and Chief Economist, Mr. Justin Lin, who was in Kuwait attending the Global Development Network Conference. While addressing distinguished members of the banking community and other professionals from the financial industry, Mr. Lin discussed the need for a global effort in dealing with the crisis and the importance of avoiding protectionism, which he says would have detrimental effects on the already suffering global economy. Mr. Lin further stated that lessons learned from past economic crises, such as the Great Depression and the 1990s Japanese financial crisis can help in the effort to avoid further or future collapse, but that it is important to remember that each crisis had its own unique set of characteristics, making a single formula hard to apply across the board. Mr. Lin also addressed the issue of rising unemployment and the vital role governments can and should play in curtailing it. He stressed the need for governments to launch a coordinated effort that results in a global stimulus package, calling upon high income countries to set aside a small part of their stimulus packages in a Vulnerability Fund that would help finance stimulus packages in lower income countries with no fiscal space. "Low income countries have more bottlenecks than high income ones. If these bottlenecks are addressed today, the growth potential of lower income countries can be much increased once the crisis is over,” he said. Mr. Lin then argued that when high income countries invest in addressing these bottlenecks, they can generate high returns for themselves in the long run. Elaborating on another initiative proposed by the World Bank Group President, Mr. Lin called on Kuwait to invest one percent of its sovereign fund’s assets in infrastructure projects in African countries. Such investment could generate stable returns for the sovereign fund in the long term while generating employment and removing constraints to growth for the host country. Noting that Kuwait has been a generous contributor to development assistance in the past, Mr. Lin said that Kuwait can plan a leadership role in supporting the above initiatives. Mr. Lin reiterated the need for governments to restore confidence in the financial system and to contain the rising unemployment rates, as the alternative may result in not only economic, but social and political instability as well. He urged governments to "take up leadership positions in responding to these challenges, otherwise the world will suffer from a long-term global recession that potentially could have been short lived." Moderating the session was Mr. Abdulmajeed Al-Shatti, Chairman of the Kuwait Bankers Association and main organizer of the event.
| 
RSS