British PM seeking 'hundreds of billions' of dollars to boost IMF reserves

Source: Agencies  |   2008-11-2  |     ONLINE EDITION

BRITISH Prime Minister Gordon Brown said he is seeking "hundreds of billions of dollars" to top up the International Monetary Fund's reserves to bail out financially stricken countries as he continued a tour of the Gulf today.

Brown also stressed Britain's desire to attract investment from sovereign wealth funds in the region, just as a deal by Barclays PLC to receive up to US$11.8 billion from a trio of Middle Eastern investors -- rather than turning for help to the British government -- caused controversy in the UK.

Brown, who has taken the lead on a push to boost the IMF's US$250 billion in reserves to prevent the spread of the global economic downturn, did not specify how much of the extra funds should come from oil-rich Middle Eastern countries.

But he suggested it should be a significant amount.

"The oil producing countries, who have generated over US$1 trillion from higher oil prices in recent years are in a position to contribute," said Brown, who met with King Abdullah late yesterday.

Brown was strongly critical of OPEC's recent decision to cut the production of crude by 1.5 billion barrels a day to boost the oil price, which it says is necessary to encourage further investment.

Brown's trip to Saudi Arabia, Qatar and the United Arab Emirates comes before a meeting of world leaders, including King Abdullah, in Washington, D.C., on Nov. 15. Bolstering the resources of the IMF to help prevent the spread of the global financial crisis is expected to be high on the agenda.

The IMF has already dipped into its reserves fund to provide emergency loans to Iceland, Hungary and the Ukraine worth a total of US$30 billion. Pakistan has said it may call on the international body for another US$5 billion.

With Europe and the United States facing recession, Brown is looking to the Middle East and Asia, where countries have significant foreign exchange reserves.