Mohammed Al-Tuwaijri the ideal candidate to lead WTO
The new director general of the World Trade Organization (WTO) will be elected this month. This is easily the most important choice in the history of the WTO and its predecessor the General Agreement on Tariffs and Trade. In times of crisis, leadership matters. It also matters that the new head of the organization is equipped with the abilities required to run the organization. They are: A solid understanding of the global economy, an understanding of how governments and multilateral organizations work and interact, diplomatic acumen, and leadership skills.
On July 8, Saudi Arabia put forward its candidate in Mohammed Al-Tuwaijri. He has all the above qualities in spades. An MBA of King Saud University as well as being a former fighter pilot, he was HSBC’s deputy chairman and CEO for the Middle East, North Africa and Turkey before joining the Saudi government as minister of economy and planning. He currently holds the position of minister advising the Royal Court on international and local strategic economic matters. He is well versed on the parquet of multilateral economic diplomacy because the International Monetary Fund (IMF), World Bank and WTO are in his area of responsibility.
Why is it more important now than ever that the right person is appointed as the WTO’s director general?
The coronavirus disease (COVID-19) pandemic has sent the world economy and, with it, its trading regime into the biggest crisis since the Second World War. In June, the IMF forecast that the global economy would contract by 4.9 percent this year.
Pandemic-related lockdowns have had a great effect on trade. In April, the WTO predicted that trade could decline between 13 and 32 percent in 2020. In its August trade barometer, the WTO recorded a 14 percent drop in global merchandise value between the first quarter and the second quarter of this year. It also estimated an 18.5 percent decline in merchandise trade during the second quarter, when lockdowns were particularly severe and widespread.
Trade has, for a long time, been the motor of the global economy. How trade recovers will have a major effect on how fast the global economy can recover. For example, it was trade that allowed China’s economy to advance from 10th place to second in the global league table between 1980 and 2010. It was also trade that allowed China’s economy to grow six-fold over those 40 years. Trade has lifted hundreds of millions of people out of poverty across the world. It has also allowed innovative companies to thrive. Since the 1980s, global supply chains have grown and become ever more integrated, with a particular push at the beginning of this century.
Trade also matters to the Gulf Cooperation Council countries because the shipping of goods, integration of services and the travel associated with these trends are good for the demand of oil, which is the world’s premier transport fuel. Demand for oil grew by about 40 million barrels per day during that same time period.
The global trading regime was under strain even before the pandemic took hold of the world. US-China trade frictions and the renegotiation of other trade pacts had already put a strain on the global trading regime as we know it.
Among all the candidates, Al-Tuwaijri stands out because he is the only one who combines ministerial experience with a strong private sector background.
In this context, it will be vital that the new director general of the WTO has the experience and wherewithal to impartially negotiate with all of its 164 member countries. Given the state of play between the US and China, it is particularly important that the new WTO chief hails from a country that has cordial relations with both the largest and the second-largest economies in the world. It is also important that his country of origin has the weight to negotiate at eye level with those two titans in order to give him the necessary clout.
As we come out of the pandemic, a fair and equitable trading system will become unbelievably important. Al-Tuwaijri was clear in his statement to the WTO on July 17 that he wanted to create a system that was fit for purpose for the 21st century. This includes adjusting to the Fourth Industrial Revolution with robotics and artificial intelligence, just as it does inclusive growth and the integration of the UN’s 17 Sustainable Development Goals into the global trading agenda. Al-Tuwaijri is familiar with all of these issues from his time in the Ministry of Economy and Planning. His experience at the highest echelon of international banking also gives him the required analytical understanding of the macroeconomic complexities he will be dealing with, as well as the experience in leadership.
He will need both. Big multilateral organizations are complex and whoever runs them needs to triangulate complex and at times divergent, if not contradictory, priorities. These organizations are also notoriously difficult to manage, given the multitude of nationalities and cultures among member countries, employees and other stakeholders.
The list of candidates for the job is impressive. It includes, among others, former UK International Trade Secretary Liam Fox and ex-Nigerian Finance Minister Ngozi Okonjo-Iweala. However, among all the candidates, Al-Tuwaijri stands out because he is the only one who combines ministerial experience with a strong private sector background.
We live in complex times. And nothing is more complex than trade when the world’s two largest economies are at loggerheads and while the world is in the midst of a pandemic. Therefore, we cannot leave it to chance who runs the WTO, because he or she needs to steer the ship through rough and troubled waters into a world that will look very different from the one we currently know. I am convinced that Al-Tuwaijri is just that person.
• Cornelia Meyer is a Ph.D.-level economist with 30 years of experience in investment banking and industry. She is chairperson and CEO of business consultancy Meyer Resources. Twitter: @MeyerResources