Crisis 'calls for global controls'

Dubai: Bad financial policies, and not flaws in the economy, is the reason for the current global financial crisis, His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, said on Friday.

Shaikh Mohammad was addressing the Opening Plenary of the Inaugural Summit of the World Economic Forum on the Global Agenda, being held in Dubai till Saturday.

Shaikh Mohammad said the crisis puts the focus on the need for global governmental controls to protect the interests of the larger economy and the public.

"I am not saying that we must have a protected economy but [we should] promote a process of co-operation to protect regional and international economies."

Shaikh Mohammad said that unchecked mortgages, arising from the lack of adequate checks and controls by financial institutions, led to the US subprime crisis, and eventually the larger global economic situation that we are witnessing today.

He said the solution for rectifying the current crisis is to restore the trust and confidence of the public, adding that cash is available.

He said the current crisis has proved that global economies are inter-linked and that any impact on the US economy will be felt in a country like China, and vice versa.

Likewise, the Gulf economies are also not isolated from the crisis and are affected by it, he added.

Earlier, Klaus Schwab, founder and executive chairman of the World Economic Forum, and Mohammad Ali Al Abbar, chairman, Emaar Properties and Co-Chair of the Summit on Global Agenda, reminded the audience that in an increasingly globalising world, the challenges are more complex and interrelated and these require a collaborative effort in terms of ideas and solutions and a systematic approach to implementation.