WORLD> Middle East
Expert sees Arab funds to gain prominence amid financial crisis
(Xinhua)
Updated: 2008-10-22 17:15

AMMAN -- Expert expects Arab sovereign wealth funds (SWF) to gain prominence as the financial crisis arisen from the United States is rampaging in developed countries, local daily The Jordan Times reported on Wednesday.

"Arab markets are very far from crisis," stressed Saket while acknowledging that problems exist internationally.

"The seeds (of the crisis) were sown by low interest rates for a long period, excessive lending and spending without proper security, toxic financial derivatives, uncontrolled credit rating agencies and unrestricted globalization," said Jordan Securities Commission Chairman Bassam Al Saket Tuesday at a seminar on economic media and stock exchanges.  

Western countries, led by the United States, will seek the Arab SWFs as a "savior" to extinguish the financial "fires caused by the Americans, in America," added the expert.

However, he cautioned on what role Arab funds decide to play. He described the financial mess as a test of whether Arabs choose to continue the flow of funds to risky and turbulent markets or redirect their investments into the region, noting that charity starts at home and that Arab sovereign funds were not welcomed in the US and Europe in the past.

Saket hoped, despite political factors, an evaluation of the financial crisis abroad by Arab bodies would be in favor of investment repatriation and not a repeat of same mistakes in the past.

The seminar was held in cooperation with the Abu Dhabi-based Arab Union for Securities Commissions.

The SWFs in some Arab countries, especially some Gulf countries, such as the United Arab Emirates (UAE), Saudi Arabia, Kuwait, Qatar and Oman, enjoy leading positions in the world.

According to the pan-Arabic daily Asharq al-Awsat, the Gulf countries invested $140 billion dollars overseas between 2004 and 2007, most of which are directed overseas focus on two objectives: acquisition of assets and real estate, and the purchase of shares in high quality financial and industrial firms.

The investment blitz has transformed some of the Gulf emirates into key actors on the international financial stage in a short period of time.