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Sun 29 Mar 2009 04:15 PM

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Saudi Arabia has not made IMF aid proposal

Kingdom's finance minister asserts Saudi won't raise its contribution to IMF.

Saudi Arabia has not made any proposal to help the International Monetary Fund by increasing its contribution, Finance Minister Ibrahim Al Assaf told Reuters on Sunday ahead of a G20 crisis summit on Thursday.

"The kingdom has not put forward any proposal," Assaf said in a written reply to Reuters questions on financial aid the kingdom could give to the IMF.

Assaf, who is the kingdom's chief representative at the IMF and World Bank, added: "What is on the table now is for support from all the major member states of the fund."

The statements downplay speculation that Saudi, the world's largest oil exporter, was considering increasing its IMF contribution over and above that of other shareholders as global leaders look to fortify the fund during the crisis.

G20 political chiefs are expected to agree on additional capital for the IMF at a summit in London on April 2, but it remains unclear which states would pay more or how much more.

Saudi Arabia is the only Arab member of the G20.

Central bank governor Muhammed Al Jasser said this week that Saudi was willing to pay additional capital to the IMF in exchange for higher quotas.

Jasser's comments suggested that Saudi Arabia would only increase its payment if other countries' quotas were increased.

The US, which has indicated it is willing to give up to $100bn to the IMF, has said there should be $500 billion in new funds on top of $250bn the IMF already has.

But with advanced economies and the IMF's largest shareholders - the United States and European nations - in recession, the onus is increasingly on countries with trade surpluses such as China and Saudi Arabia to commit money.

Saudi Arabia now contributes to 3.21 percent of total IMF capital through its quota and has 3.16 percent of the total votes, according to the IMF website.

British Prime Minister Gordon Brown asked Saudi Arabia to stump up more money for the IMF during a visit to Riyadh in November, but Saudi Arabia reacted coolly to the idea.

Saudi officials say the kingdom is already doing enough to help the global economy recover by keeping planned public investments on track at a time when oil prices have fallen from a high near $150 a barrel in July to around $51 on Friday.

The kingdom is projecting spending $400 billion in the five years to 2014, a quarter of which will be in its state oil sector. This, according to Saudi officials, offers a rare window of opportunity to many global firms amid the current crisis.

While Gulf oil exporters such as Saudi Arabia have built up a cushion of reserves during six years of soaring oil prices, their revenues have been hit by the fall in crude prices.

The IMF's capital is increased through members' quotas, or subscriptions, which are usually determined by the size of a country's economy, trade and reserves, among other factors. (Reuters)