Do you think we are past the worst of the financial and economic crisis?
The financial and economic crisis that engulfed the world economy had two distinct dimensions. First was the initial shock, which manifested itself in a liquidity and credit crunch of unprecedented proportions. Second-round effects relate to the real economy as the financial shock propagated through the system and slowed down economic activity in general. As a result of significant efforts in the form of monetary intervention and fiscal stimulus undertaken by the most-affected economies, the slide of the financial sector appears to have been checked and some positive developments are beginning to emerge. However, the deeper impact on economic activities still persists and a turnaround is likely to take some time.
Although Kuwait and Gulf economies in general were not at the centre of the shock, the experiences of the crisis have been broadly similar. Indications are that while policies undertaken have enabled us to stabilize the financial sector, the deeper impact on economic activities is very much with us.
