‘Wary West could drive us to East’ - Emirates24|7

‘Wary West could drive us to East’

(SATISH KUMAR)   



Gulf state wealth managers could stop investing in developed markets if Western governments constantly questioned their motives, according to Sultan Ahmed bin Sulayem, Chairman of Dubai World, the government-owned investment firm.


He said the credit crisis had not dried up access to loans for good borrowers and was unlikely to affect his firm’s business.


Managers of sovereign wealth funds attending the World Economic Forum complained earlier on Thursday that some rich nations view the funds as political threats. Dubai World itself is not a wealth fund, as the firm finances its business through bank borrowings, but Bin Sulayem said fears surrounding the funds were unjustified.


“Sovereign funds that have money, whether they are from Kuwait, Saudi Arabia, Oman, Qatar, Bahrain or the UAE [go] to where investment is,” said Bin Sulayem.


“There is the policy of these government fund managers to go where they are welcome,” he said. “If [rich nations] say ‘we do not want your money’, fine. We will invest in China and India. They all want investment. So the West has to decide,” he said.


Dubai World itself got mired in a political row in 2006 when its port operator subsidiary, Dubai Ports (DP) World, gained control of some US ports. It had to sell the port assets later. With revenues estimated at more than $30 billion (Dh110bn), Dubai World’s businesses range from DP World, the world’s third largest port operator, to real estate projects in several countries.


Bin Sulayem said his firm had no problem borrowing even as the credit crisis has led to banks tightening lending standards. “There is a lot of liquidity in banks. But they are only lending to people they know and they are selective in their lending. We have been borrowing and we have no problem borrowing. We are paying back. We are solvent,” he said.


Bin Sulayem said the credit crisis was unlikely to lead to serious slowdown in corporate activities.


“Financial markets are taking a big hit but it is more of a psychological effect because many companies are doing well,” he said. “Some made bad decisions. People were overextending themselves. They have made some miscalculations.” (Reuters)

Comments

Comments