Dubai:  When the US coughs, the rest of the world no longer catches a cold, possibly due to the global economic power shift from the West to the East, observed participants in the Gulf Cooperation Council (GCC) Institutional Investment Summit, a ground breaking conference aimed at, among other things, analysing and evaluating the growth of sovereign wealth funds at the Dubai International Finance Centre(DIFC).

“The future of sovereign wealth funds is bright, there is a well documented migration of capital eastwards and nowhere is more pronounced than with the sovereign wealth funds and central banks of Asia and the Middle East,” said Hani Kablawi, Managing Director Middle East and North Africa (Mena), Bank of New York Mellon at the opening of the summit.

 

“This summit offers a thought-provoking dialogue as the power bases in the world’s financial landscape continues to shift, accompanying the structural change in the world’s economic geography towards the GCC countries and emerging market econ-omies,” said Dr Nasser Al Saidi, Chief Economist, DIFC Authority.

Surpluses

The two day summit was told that due to high export rates in Asia and high oil prices in the world market, Middle Eastern countries and the East have found itself with huge amounts of surpluses.

Since many of the Middle Eastern countries are small economies, it became feasible to invest the surpluses elsewhere in sovereign wealth funds, which in essence, have lately come to the rescue of the sub-prime hit American and European financial sectors.

One would think, in the light of this rescue, sovereign wealth funds would improve its image and reputation and become more popular in the West, but instead, it is making the West, especially the US extremely nervous as to the motive of these massive investments from the East to American companies.

There is a well documented migration of capital eastwards and nowhere is more pronounced than with the sovereign wealth funds and central banks of Asia and the Middle East.”

Hani Kablawi, Managing Director Mena, Bank of New York Mellon