Saudi Finance Minister and IMF Director Collaborate for Middle East Economic Recovery

Supporting Recovery in Conflict-Affected Economies

On February 16-17, 2025, the inaugural AlUla Conference for Emerging Market Economies in Saudi Arabia provided a platform for a high-level discussion regarding the urgent recovery needs of conflict-affected economies in the Middle East, particularly Syria. Co-hosted by Saudi Arabia's Finance Ministry and the International Monetary Fund (IMF), this pivotal meeting attracted finance ministers from the region, along with high-ranking members from various international financial institutions including the World Bank and the Arab Coordination Group.

During the event, Kristalina Georgieva, the Managing Director of the IMF, and Mohammed Aljadaan, the Finance Minister of Saudi Arabia, issued a joint statement underscoring the importance of collaboration among nations and organizations to address the pressing challenges faced by conflict-stricken economies.

The representatives recognized the pivotal role of effective partnerships in delivering aid and facilitating recovery. They acknowledged the dire humanitarian needs and emphasized a focused approach to rebuilding efforts. The discussions centered on establishing a common understanding of the socio-economic landscape in conflict-affected regions, particularly the urgency surrounding Syria's recovery.

Georgieva and Aljadaan noted three core priorities identified by participants aimed at easing the economic strain on these nations:
1. Continuous Diagnostic Assessments: A thorough evaluation of the economic and social contexts for each conflict-affected country to identify their unique challenges and reconstruction needs. This diagnostic approach will help prioritize institution-building and close gaps in policies.
2. Enhanced Capacity Development: Rapid scaling up of capacity development initiatives by both the IMF and the World Bank aimed at strengthening existing institutions, while also establishing new frameworks where necessary. This is vital for enhancing key fiscal, monetary, and banking functions in these economies.
3. Mobilization of Financial Assistance: There’s a recognized necessity for enhanced financial support from the international community. Coordinated financial aid will fund robust reform programs, reconstruction projects, and humanitarian assistance across affected nations.

Discussion participants expressed strong commitment to this collaborative spirit and the urgency of the task at hand. They acknowledged that failure to support these countries equates to allowing negative spillovers across the region, reiterating the interconnectedness of socio-economic issues in today's global landscape.

The IMF, World Bank, and the Arab Coordination Group reiterated their readiness to harmonize their approaches while respecting their institutional mandates. An informal coordination group is set to be established to further facilitate these efforts, with plans to reconvene for continued discussion at the upcoming IMF/World Bank Spring Meetings scheduled for April 25-27 in Washington, D.C.

This thoughtful approach may pave the way for significant alleviation of the humanitarian crisis currently facing many in the Middle East, especially in Syria, and outlines a framework for collaborative recovery efforts moving forward. As the region seeks sustainable recovery solutions, this commitment to innovation and shared resources could mark a hopeful turning point for its economy and people.