DUBAI — A unified Gulf Cooperation Council (GCC) economy will attract more foreign direct investments (FDI) and create more opportunities for investors within the GCC region, said Dr Mohammed Khalfan bin Kharbash, UAE’s Minister of State for Financial and Industrial Affairs at the Gulf Wealth Forum yesterday.
Addressing the delegates of the Gulf Wealth Forum Dr Kharbash said: “The unification of Gulf economies will create a critical market size that will open up new investment opportunities to diversify the region’s economy and reduce the dependence on oil. The UAE has long been encouraging private investments through free zones and private participation in economic activities. We are keen to cooperate with other GCC members and share our experience for the benefit of the whole region.”
The previous GCC meeting held in Abu Dhabi in last November had resolved to achieve economic integration of the region in 2008 and Monetary Union in 2010. The Gulf Wealth Forum organised under the supervision of the Ministry of Finance and Industry in cooperation with Dubai International Financial Centre discussed the new economic opportunities the unified economic bloc will offer. The Forum supported by the General Secretariat of the Gulf Cooperation Council, and UAE Central Bank has participation from a number of Gulf-based banking and financial institutions.
Speaking about the need for healthy financial markets in the region, Nasser Al Shaali, Chief Operating Officer of DIFC said: “Healthy capital markets grow to serve the real needs of the economy, especially the need for long-term financing, and they develop through serving resident and non-resident sectors. They thrive within an appropriate legal and regulatory environment and a stable economy. For the sustained development of GCC economies beyond oil revenues, it is essential that we embrace globalisation, continue to expand the investor base and attract corporations to raise capital and financial institutions to expand operations.”
GCC financial markets have witnessed active participation of the private and public sector and have witnessed huge growth in investor numbers over the last three years.
Currently GCC citizens own more than $1 trillion in assets held abroad in global financial systems. Al Shaali said it is possible to attract a bigger proportion of these assets if investors can see more examples and opportunity for value creation in the region. “I suspect that the growth we have seen thus far is going to be eclipsed in the near future as we continue to broaden and deepen our markets with increasing participation from investors, the governments and corporations.”
Six years ago, with the exception of Kuwait, most of the GCC exchanges were still in their infancy. Today, the region has flourishing stock markets in all GCC countries. “With the decision to float the Dubai Financial Market, we have taken a giant step forward in corporatising them. Allowing the private sector and resident investors to be amongst the owners of this business is a breakthrough decision in the regional environment. Not only will it create more wealth but also instill the values of corporate governance and improve disclosure,” said Al Shaali.
Speaking about the role of DIFC in the region he said, the new financial centre is much ahead of the regional financial markets in dealing with the age of globalisation. Nearly $2 trillion worth of currency now moves cross-border every day, roughly 90 per cent of which is accounted for by financial flows unrelated to trade in goods and services. “ We aim to attract direct foreign investment and transfer more financial know-how in the form of global long-term financial institutions setting up base here. With the stated GCC desire to join the WTO, we are taking the lead to attract global financial institutions sooner rather than later. And on the other hand, we are allowing local corporations to tap the huge amounts of global liquidity to bring their biggest plans to fruition.”
Source: Khaleej Times