Cairo- Masood Ahmed has been the director of the Middle East and Central Asia Department at the International Monetary Fund (IMF) since 2008. Ahmed is willing to step down from his post on October, a decision that International Monetary Fund Chief Christine Lagarde commented on saying, “Masood has been a visionary leader of the department for the past eight years. I have highly valued his wise counsel, political acumen, and great strategic sense. His departure is a loss for the Fund, and he will be deeply missed by friends and colleagues alike.”
Asharq Al-Awsat Newspaper had an intriguing interview with Ahmed. Below are some selected questions and answers.
What do you think of Saudi Vision 2030?
“Saudi Vision 2030 is highly welcomed for two reasons. The first is that it is essential for a country undergoing a major transformation that demands creating more job opportunities for the Saudi youth, taking into account the oil prices. The second reason is that this is an ambitious plan, and that is how it should be, because the challenges are abundant.”
But does the vision fall in line with the IMF recommendations?
“Sure, we expect the vision to reduce Saudi Arabia’s dependency on oil in the coming five years and to enhance the economic situation via making the private sector the main sector.”
What about the timing of economic transformation?
“The timing is perfect. Some results will be quickly obtained, while others might take time and this fact stresses the importance of starting early.”
How do you view the Gulf countries’ policy in light of the falling oil prices?
“The challenges facing the Gulf are the same facing other oil exporting countries. Throughout the coming ten to 15 years, countries will better adapt with the fact that oil prices have dropped and that oil is no more the main driver of the economy.
“All oil exporter economies should do two things: rationalize governmental expenses in a way that suits the drop of oil revenues and encourage looking for jobs in the private sector. The Gulf is on the right track; this appeared clearly when revising the balances and costs. This, for sure, has an impact on inflation averages and might cause a slump in the Gulf in 2016-2017. Yet, this is a natural process and a part of the transformation.”
Can you evaluate monetary and financial policies adopted by the Middle East?
“As I said, oil exporting countries have already started to undergo transformation processes. As for oil importing countries, they now face less pressure due to low prices and they can catch their breath… Morocco and Jordan witnessed some enhancement following some tough decisions that have been taken during the past three or four past years.”
How many countries have programs with the International Monetary Fund in the Middle East and North Africa (MENA)?
“There are already ongoing programs with Tunisia, Morocco and Iraq while recent agreements have been reached with Jordan and Egypt.
“Syria, Yemen and Iraq are countries suffering a humanitarian tragedy that left its mark on the economy. Unemployment averages rose, poverty averages as well and less children are enrolling in schools. We have no extensive activity in Syria, currently, unlike Yemen, Iraq and Libya.”
How are the agreements with Jordan expected to support economy in coming years?
The main purpose of the program is to help the country move from economic stability phase to inclusive growth phase.
What about Egypt?
“The purpose of the Egyptian program is to put the country on the right track through rebalancing its economy and setting up the foundations for growth and recruitment in Egypt. The first way to activate these processes is to reduce all the deficit factors existing in the budget and public debt.”
Finally, what are your recommendations for citizens and governments in the MENA?
“In the coming years there will be two main factors driving the economy and general social image. The first is how to manage conflicts and second is how to coexist with the drop of oil prices. These are two challenges to be tackled wisely.
“The private sector should be unleashed; we should believe that dynamic competition between the public and private sectors will be the foundation of future economic progress.”