DOHA: The head of the International Monetary Fund said Tuesday that the global slump in oil prices was a "splendid wake-up call" for energy-producing countries to restructure their economies.
Speaking at Georgetown University in major gas producer Qatar, Christine Lagarde said those countries reliant on oil and gas revenues had to change to maintain their economic position
"I would say the current situation is a splendid wake-up call to restructure," she said. "In the face of this new situation, triggered by the price of the oil which we see as not a short-term phenomenon but a longer-term phenomenon... measures have to be taken."
Lagarde said those measure included finding new sources of revenue and tax, and keeping a tight control on spending. Although not specifically mentioning any countries, she also encouraged more private sector involvement.
"How do you welcome the private sector, how do you make the environment more business friendly so that the private sector feels welcome and encouraged and takes the baton from the public sector," she said. “So, it's a whole series of measures that need to be considered."
Lagarde delivered a similar message to ministers of the six Gulf Cooperation Council states—Bahrain, Kuwait, Oman, Saudi Arabia and the United Arab Emirates as well as Qatar, on Sunday.
The IMF projects that growth in the GCC states will fall from 3.2 percent this year to 2.7 percent in 2016. It forecasts that export revenues will be $275 billion (256 billion euros) lower this year than in 2014. The price of oil has dropped by more than half since the beginning of last year.
