World must collaborate to tackle crisis

Dubai: Against the backdrop of the challenges facing the world, leaders assembled at the World Economic Forum in Dubai gave a call to join global collaborative efforts to come up with ideas and recommendations that would go a long way to resolving the issues.

The World Economic Forum, in partnership with the Government of Dubai, opened the inaugural Summit on the Global Agenda in Dubai on Friday and is taking place amid the global financial crisis still unravelling and a recession imminent in the US and Europe, that is expected to slow the emerging econ-omies, including those in the Middle East.

"This summit comes at a time when global challenges in the financial sector are forcing policymakers and businesses to revisit their growth strategies for the future," said Mohammad Ali Al Abbar, Chairman of Emaar Properties and Co-Chairman of the Summit on the Global Agenda.

No more is the fact evident that nations are globalised than ever as the financial crisis unravels and impacts economies around the world.

What started as a sub-prime mortgage crisis in the US has spread globally and engulfed various sectors, of which the banking and stock markets have been among the worst hit.

There have been bailouts and capital injections running into thousands of billions of dollars and interest rate cuts to stem the crisis.

The International Monetary Fund, in its latest report on the world economic outlook, has forecast negative growth for the developed economies and the emerging economies' growth is also to be challenged.

Al Abbar pointed out that the majority of crises have their origins in the developed world and then affect the developing world.

"This highlights the importance of an integrated approach, which is the mark of this gathering of the world's leading minds including over 50 intellectuals from the Middle East."

The current crisis of such breadth and magnitude makes it imperative, said the day's speakers, for the business, government and non-government leaders and academics to come and work together to put in place solutions for a lasting order.

"The challenges faced by the world today are more complex, more interrelated, more intractable than ever before," said Klaus Schwab, founder and executive chairman of the World Economic Forum.

"Confronting these global challenges requires collaborative thinking, creative solutions and, most importantly, a systematic approach to implementation. These Global Agenda Councils and their deliberations will provide a 21st century approach to dealing with issues that face us all, from systematic financial risk to climate change."

Schwab called for an entirely new global cooperation system and said that the summit could start building the foundations of that system.

Liquidity crisis

Closer to home, as elsewhere, a liquidity crisis that could derail the booming real estate sector and the banks looms, although governments have stepped in to avert a crisis.

The region is gearing up to face a reduced surplus on account of oil prices declining. However, the economic diversification of the UAE is likely to put the country in better stead to overcome the challenges.

Al Abbar said the UAE and the Gulf economies have been resilient in the face of the global turmoil and the country's focus on tourism, education and information technology could serve as a roadmap for other emerging econ-omies adjusting to the new global realities.

However, as the world grapples with the crisis in a globalising world, "globalisation," could be seen as a problem in some quarters and there is every chance that in addressing the underlying issues, there could be political pressure to go for "bad ideas," said Ernesto Zedillo, former president of Mexico and now a professor of globalisation at Yale University.

To look at globalisation as a problem and not as a solution and become inward-looking, protectionist and isolated would be a disaster," Zedillo said.