The head of the International Monetary Fund warned Sunday that the British exit from the European Union means it “will never be as good as it is now” for the country’s economy.
Christine Lagarde spoke at the World Government Summit in Dubai, which also saw Lebanese Prime Minister Saad Hariri make an investment pitch for his small country, now struggling through a major economic crisis as one of the world’s most-indebted states.
The clubby annual event brings world leaders together at a luxury hotel in Dubai for motivational talks littered with business buzzwords. But this year’s summit comes amid a worldwide turn toward populism and away from globalization.
Ms. Lagarde didn’t hesitate to criticize Britain’s coming departure from the EU, known as “Brexit.” Britain is set to leave the EU on March 29. British businesses fear a possible “no-deal” Brexit with the EU will cause economic chaos by imposing tariffs, customs and other barriers between Britain and mainland Europe.
“I’m certain of one thing, is that it’s not going to be as good as if they had not been Brexit, that is for sure,” Ms. Lagarde said. “Whether it ends well, whether there is a smooth exit given by customs unions as predicated by some, or whether it’s as a result of a brutal exit on March 29 without extension of notice, it’s not going to be as good as it is now.”
She urged all parties to “get ready for it” as it will upend how trade is now conducted with Britain.
For his part, Mr. Hariri sought to attract investment from Gulf Arab states, which long have been a major benefactor of Lebanon. His country now faces soaring public debt of US$84-billion, or 150 per cent of the gross domestic product, making it one of the most-indebted states in the world. Lebanese unemployment is believed to be around 36 per cent.
Political paralysis has exacerbated the crisis. Lebanon formed a government last week after nine months of deadlock.
“We took the decision to bring together all the political powers because this is the only way to save Lebanon,” Mr. Hariri said. “Today in Lebanon, we don’t have the time or the luxury of politics because our economy could completely collapse unless we surgically remove [politics] quickly, seriously and collectively.”
Gulf countries such as Saudi Arabia are increasingly suspicious of Lebanon’s government because of the influence of Hezbollah, the Iranian-backed Shia political party and militant group. Hezbollah has three ministers in the new government.
A moderator gave Mr. Hariri a $100 bill and said he could keep it if he pitched him on investing in the country. After his pitch, Mr. Hariri returned the bill and said that he wished he had $115 to offer back.
Making a surprise visit to the summit was U.S. Energy Secretary Rick Perry, who took the stage to announce a robotics competition would be held in the United Arab Emirates later this year. Mr. Perry, a former governor of Texas who twice ran for president unsuccessfully, has tended to avoid the spotlight in U.S. President Donald Trump’s administration.