Dubai (AsiaNews/Agencies) – “The force of the global recession is receding” as “global trade is just starting to expand again,” US Treasury Secretary Timothy Geithner said in his first trip to the Middle East to rebuild confidence in the US economy among local leaders. But he had to admit that “given the extent of damage to financial systems . . . it seems realistic to expect a gradual recovery, with more than the usual ups and downs and temporary reversals”.
Yesterday Geithner held talks in Saudi Arabia with King Abdullah and his top financial advisers, where he laid out a four-point strategy that he said is essential for economic recovery.
In his opinion one of the reasons for the crisis was the fact that the United States was “on an unsustainable fiscal path before this crisis”.
Today he travels to the oil-rich United Arab Emirates, who are the main financial backers of US companies and buyers of US treasury bills after China.
Washington is trying to reassure them with regards to the health of the US economy to prevent capital from moving to more lucrative markets.
This year the Gulf States have seen their revenues drop as a result of lower oil prices and the depreciation of the US dollar, something especially painful since Saudi Arabia, the UAE, Oman, Bahrain and Qatar have pegged their currency to the dollar.
Geithner, who was in London on Monday, said the Obama administration is committed to protecting the value of the dollar.
This is important because Gulf “countries have a big stake in the financial stability of the United States. They’re a big creditor,” said Nasser Saidi, chief economist at the Dubai International Financial Center.
