Britain prods oil producers to aid IMF

$30b offered in bailout packages

Prime Minister Gordon Brown of Britain said that oil profits put Persian Gulf nations in a position to help. (HASSAN AMMAR/ASSOCIATED PRESS)

Prime Minister Gordon Brown of Britain yesterday urged Persian Gulf nations to help bolster the International Monetary Fund's bailout capacity, as leaders around the world spent another weekend trying to extinguish the brush fires of the economic crisis.

Brown has called on China and Middle Eastern countries to take an expanded role in financing the IMF's activities as the crisis has deepened.

"The Saudis, I think, will contribute so we can have a bigger fund worldwide," Reuters quoted Brown as telling reporters in the Saudi capital, Riyadh, after weekend meetings with King Abdullah and Saudi businessmen. "The oil-producing countries, who have generated over $1 trillion from higher oil prices in recent years, are in a position to contribute."

The IMF has committed $30 billion in the last few weeks in bailout packages for Hungary, Iceland, and Ukraine. It said Wednesday that it would lend as much as $100 billion to economically healthy countries having trouble borrowing as a result of the turmoil in the global markets.

The fund, a 185-member group, has more than $200 billion in resources and can draw on additional money from its members.

"We probably will need more resources," Dominique Strauss-Kahn, the fund's managing director, said last week. "There is no way the fund can solve the problem on its own."

In Berlin, Chancellor Angela Merkel's government was working on a stimulus plan for Germany that media reports said would be worth $64 billion. In a podcast posted on the chancellor's office website, Merkel said the cabinet would approve the measures Wednesday.

She also called on banks to make use of a larger fund the government has made available for troubled lenders.

In Lisbon, the authorities said they were setting up a credit line for Portugal's banks and were moving to nationalize one of the smaller lenders in the country, Banco Portugues de Negocios.

In Russia, officials announced new measures to halt capital flight. Igor Shuvalov, a first deputy prime minister, told state television the government would limit the sale of rubles by banks that receive government aid.

That came a day after the Russian Finance Ministry said it had injected more than $6 billion from a government fund into Vnesheconombank, a state-run bank.

In Beijing, the Chinese prime minister, Wen Jiabao, warned the economic crisis was raising the risk of social unrest, and he called for more focus on domestic spending, the China News Service reported.

In Mumbai, Reserve Bank of India, the central bank, said on Saturday that it would "employ both conventional and unconventional measures" to respond to the crisis, and cut its benchmark interest rate a half-point.