At Dubai summit, IMF chief warns Britain on Brexit challenge
DUBAI, United Arab Emirates (AP) — Pakistan’s Prime Minister Imran Khan said Sunday his nation needed “painful” economic reforms to cut back on its massive debt, just after meeting the head of the International Monetary Fund, signaling the former cricketer may be willing to slash government spending for a bailout.
Khan made the comments at the World Government Summit in Dubai, which also saw Lebanese Prime Minister Saad Hariri make his own investment pitch for his small country, now struggling through a major economic crisis as one of the world’s most-indebted nations.
Khan made a point in a sometimes-rambling address to repeatedly hit on the need for economic reforms as IMF chief Christine Lagarde looked on from the audience.
“I repeat the reforms are painful. . It’s like a surgery. When you conduct surgery for a while the patient suffers but that improves,” Khan said. “The worst thing that can happen for society is that you keep postponing reforms because of the fear that you would have opposition, the vested interests stand up and you don’t do reforms.”
That Khan is in the Gulf is not surprising, as he’s gone to Saudi Arabia and the United Arab Emirates for financial support. He also repeatedly praised China in his speech, another source of funding.
Before taking the stage, Khan met with Lagarde. Pakistan has been seeking an $8 billion bailout from the IMF. Pakistan has around $100 billion in external debts and liabilities, according to the State Bank of Pakistan.
A statement from Lagarde called the meeting “good and constructive.”
“I reiterated that the IMF stands ready to support Pakistan,” Lagarde said. “I also highlighted that decisive policies and a strong package of economic reforms would enable Pakistan to restore the resilience of its economy and lay the foundations for stronger and more inclusive growth.”
The annual World Government Summit sees global leaders and sheikhs cross paths at a luxury hotel near Dubai’s iconic, sail-shaped Burj al-Arab hotel. While typically an upbeat celebration of business buzzwords and self-help talks, this year’s summit comes amid a worldwide turn toward populism and anti-elitism.
Lagarde in her public remarks at the summit didn’t hesitate to criticize Britain’s upcoming departure from the EU, known as “Brexit.” Britain is due to leave the European Union on March 29. U.K. businesses fear a possible “no-deal” Brexit with the EU will cause economic chaos by imposing tariffs, customs and other barriers between Britain and mainland Europe.
“I’m certain of one thing, is that it’s not going to be as good as if they had not been Brexit, that is for sure,” Lagarde said. “Whether it ends well, whether there is a smooth exit given by customs unions as predicated by some, or whether it’s as a result of a brutal . exit on March 29 without extension of notice, it’s not going to be as good as it is now.”
She urged all parties to “get ready for it” as it will upend how trade is now conducted with Britain.
For his part, Hariri sought to attract investment from Gulf Arab states, which long have been a major benefactor of Lebanon. His nation now faces soaring public debt of $84 billion, or 150 percent of the gross domestic product, making it one of the most-indebted nations in the world. Lebanese unemployment is believed to be around 36 percent.
Political paralysis has exacerbated the crisis. Lebanon formed a government last week after nine months of deadlock.
“We took the decision to bring together all the political powers because is this is the only way to save Lebanon,” Hariri said. “Today in Lebanon, we don’t have the time or the luxury of politics because our economy could completely collapse unless we surgically remove (politics) quickly, seriously and collectively.”
Gulf nations like Saudi Arabia are increasingly suspicious of Lebanon’ government because of the influence of Hezbollah, the Iranian-backed Shiite political party and militant group. Hezbollah has three ministers in the new government.
A moderator gave Hariri a $100 bill and said he could keep it if he pitched him on investing in the country. After his pitch, Hariri returned the bill and said that he wished he had $115 to offer back.
Making a surprise visit to the summit was U.S. Energy Secretary Rick Perry, who took the stage to announce a robotics competition would be held in the United Arab Emirates later this year. Perry, a former governor of Texas who twice ran for president unsuccessfully, has tended to avoid the spotlight in President Donald Trump’s administration.
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Associated Press writer Kathy Gannon in Islamabad contributed to this report.
The Western Journal has not reviewed this Associated Press story prior to publication. Therefore, it may contain editorial bias or may in some other way not meet our normal editorial standards. It is provided to our readers as a service from The Western Journal.
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