GCC losses put at $324 billion

Gulf oil producers could have lost in excess of $324 billion (Dh1.19 trillion) as their massive overseas assets were hit by the global financial crisis, an official said.

Although the GCC countries have not publicised the size of their assets abroad, independent estimates put them at nearly $1.8trn, said Abdul Aziz Al Owaishik, Director of the Economic Integration and Studies at the Riyadh-based GCC Secretariat.

"We do not have exact figures on the value of the GCC government investments abroad but they have been estimated at nearly $1.8trn, round 60 per cent of which are believed to be dollar-denominated," he told the London-based Arabic language daily Al Hayat. "These assets are expected to have suffered from a paper loss of around 30 per cent of their total value, or even more."

Owaishik did not specify the size of the loss but at 60 per cent, the GCC dollar-based assets stood at $1.08trn. This means their loss of more than 30 per cent exceeded $324 billion because of the global crisis.

The bulk of those assets are controlled by sovereign wealth funds (SWFs) and are concentrated in the US and other Western industrial powers. The Abu Dhabi Investment Authority controls the biggest part of those assets as its overseas investments were estimated at between $350-875bn at the end of 2007.

"The global crisis has indirectly affected project financing in the GCC as local banks have become more cautious in extending loans and international banks have halted a large number of credit lines," he said.

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