For the West, Gulf the saviour
in this time of crisis
Nov 1 (IANS) As the world grapples with a financial crisis
and the word liquidity has entered the common man's vocabulary,
Western powers are increasingly looking to the Gulf to shore
up their economies.
countries are emerging as important contributors to the global
financial system even as top American and European economic
policymakers have started visiting this region in the wake
of the crisis.
Deputy Secretary of the Treasury Department Robert Kimmit,
who came on a whirlwind five-country tour of the Gulf this
week, said his country was looking for investments from sovereign
am taking the time to meet with sovereign wealth funds (SWFs)
and other investors looking for opportunities in the United
States to make clear we are open to investment that is done
on a commercial not political basis and that does not raise
security concerns," Kimmitt said here this week.
Eastern SWFs account for four of the top six commodity-based
SWFs in the world with a combined value of $1.74 trillion.
the major SWFs in the Gulf are the Abu Dhabi Investment Authority
and Dubai World in the United Arab Emirates (UAE), the Kuwait
Investment Authority, the Qatar Investment Authority, Saudi
Arabia Sovereign Wealth Fund and Bahrain's Mumtalakat.
also went on to add that the US was more open to foreign investment
now than before.
comments assume significance given that in 2006, Dubai-based
DP World, the world's fourth largest port operator, had to
abandon its bid to manage six ports in the US following immense
controversy made clear to US policymakers the importance of
reconfirming our commitment to open investment and of taking
proactive steps to respond to the lessons learnt," the
US treasury deputy secretary said.
he did not hold back statistics at this time of crisis to
emphasise the importance of foreign investment for the US
to Kimmitt, foreign firms employ 5.3 million US workers. These
workers generate 19 percent of American exports, 14 percent
of spending in research and development, 11 percent of capital
investment and 13 percent of corporate tax revenue.
US Secretary of Treasury Henry Paulson, in an interview to
the Oxford Business Group (OBG) for "The Report: Abu
Dhabi 2008", said that the Gulf nations, flooded with
surging oil revenues, have a historic opportunity to make
investments in foreign countries.
to him, these revenues are helping the Gulf nations to "shore
up their economic fundamentals...and make much-needed investments
in human capital - steps that should help avoid the up-and-down
cycles of the past and support significant sector-wide growth".
is this more evident than in the UAE, where a vibrant, diversified
economy is reflected through innovative construction and services
growth," Paulson said.
also assured Gulf and Middle East leaders that their will
to liberalise would be matched by an American attitude of
worry about growing protectionist sentiment in the US. My
response is the same as that expressed by President Bush -
as we seek to open new markets abroad, so the US will keep
its markets open at home to diverse foreign investment."
Foreign Affairs Minister Frank Walter Steinmeier, who was
also on a visit to the UAE this week, called on Gulf countries
and emerging economies to become more involved in reforming
that the G8 group of industrial nations could not end the
crisis on its own, he said: "We hope we can ensure the
support of the Gulf region countries. We need them if we are
to establish an international system of rules."
the Americans and the Germans, it is now the turn of the British
to come looking for funds in the Gulf.
Prime Minister Gordon Brown will be embarking Saturday on
a tour of Saudi Arabia, UAE and Qatar seeking support for
his plan to have an expanded International Monetary Fund (IMF)
as a bailout package.
countries that have got substantial reserves, the oil rich
countries and others who are going to be the biggest contributor
to the fund," he was quoted as saying in reports published
ahead of his visit.
visit should be interesting given that he had touched some
raw nerves in the Organisation of Petroleum Exporting Countries
(OPEC) after he opposed OPEC's decision to cut output from
Nov 1 as oil prices touched $60 a barrel this week.
secretary general Abdalla Salem El Badri, at a conference
in London this week, had expressed surprise that the world
was looking at Opec countries to meet this crisis.
crisis created in the (United) States must be solved within
the States," he said.
UAE's Foreign Minister Shaikh Abdullah Bin Zayed Al Nahyan
has said that the UAE was ready to come to the world's rescue
at this time of crisis.
his meeting with Steinmeier in Abu Dhabi Thursday, he said:
"The UAE will employ all means to head off the global
financial crisis, be it through bilateral cooperation with
the country's friends and allies or through international
he did not outline any bailout package, he said: "We
are part of a global system and this entails obligations...We
are also interested that the world witnesses auspicious growth
to achieve the Millennium Development Goals (set by the UN)."
added that the Gulf nations have entrusted Saudi Arabia's
King Abdullah Bin Abdulaziz to convey the region's ideas for
mitigating the crisis sparked by the credit crunch in the
Arabia is the only member from the Gulf in the Group of 20
nations, which will gather in Washington for an emergency
meeting Nov 15.