Mideast leaders need to push ahead with reforms - panel

INTEREST RATES: One of a number of weapons that can be used to help weather the global economic crisis. (Getty Images)

Business and government leaders from the Middle East have identified pushing ahead with reforms as key to weathering the global economic crisis.

"This is not about a rescue package," Rachid M Rachid, Egypt's Minister of Trade and Industry, told a panel session at the World Economic Forum in Jordan.

"The real big story is reform, change and managing the transition. What we have been doing in the past (few) years is seriously driving a reform programme and making clear that, unless successful, we will not be able to meet the challenges of the world.

He also told leaders at the meeting, reported by news agency WAM, that had reforms not taken place ''We would have been in a terrible situation today".

"Our plans for education, job creation and the reform programme are the most important things that need rescuing," said Sheikh Ahmed Mohammed Al Khalifa, Bahrain's Minister of Finance.

"The challenge is not to address the immediate challenges like shortness of liquidity, the challenge is to look at going forward in terms of job creation, economic growth and which models are sustainable."

Jordan is pursuing the same strategy, according to its Minister of Finance, Basem Al Salem - the focus being on what happens after the crisis ends with the emphasis being placed on new tax laws, as well as a new custom tariff structure and investment strategy to make Jordan a more competitive place to invest in.

Arif M Naqvi, founder and Group CEO of Dubai-based Abraaj Capital meanwhile stressed the need for educational reforms to continue, saying "the critical element of reform is education, and it might take us 10 years but it will make us competitive."

The private sector representatives on the panel cautioned policy-makers against using the crisis to "interfere in business".

"My worry is we're going to get back to the norms where government says it knows better. We need to be clear that government doesn't take the opportunity and take over," said Khalid Abdulla-Janahi, Chairman, Ithmaar Bank, Bahrain.

Panellists addressed other challenges facing the region's economy. Despite the impact of the economic crisis, the fundamentals of the Middle East's economy are "generally solid" according to Naqvi, but consumers need to be talked back into being confident.

Fixing the US financial institutions will help resolve market volatility, according to Minister Rachid, who also called on the private sector to work together with policy-makers to avoid protectionism.

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