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CAEU: Arabs should unify investments

- Mark Newton

Monday, 11 May 2009 02:51

Secretary General of the Council for Arab Economic Unity (CAEU) Ahmed Gowelli said that the council's investment development committee would hold tomorrow a meeting which would discuss a Lebanese proposal to encourage joint Arab investments.

Gowelli told the press that the meeting would last for two days and would be attended by Arab business personnel as well as economic officials.
The meeting would also focus on the economic resolutions of the last Arab summit which was held in Doha, Qatar, stated the official, citing a proposal to establish an Arab council for investment.

Other items of the meeting would include the nature privileges to be given to Arab states joint the Arab council for investment, said Gowelli who indicated that embarking on such projects would need total Arab cooperation on that matter.

Gowelli revealed that a suggestion to initiate an identification card for Arab business personnel would be on the discussion table of tomorrow's meeting, adding that such card would enable Arab businessmen to free travel in the Arab region.

CAEU was established by Egypt, Iraq, Jordan, Kuwait, Libya, Mauritania, Palestine, Somalia, Sudan, Tunisia, Syria, UAE and Yemen on June third, 1957. It became effective May 30, 1964, with the ultimate goal of achieving complete economic unity among its member states.

Sovereign Fund

Moreover, Gulf Arab governments' funds are billions of dollars poorer despite record oil prices because of losses in stocks and other investments, a report said.

The Council on Foreign Relations' paper suggests that the world's largest such fund is considerably smaller than some earlier estimates have claimed.

Holdings of that fund, the Abu Dhabi Investment Authority, and another pool of money controlled by the Persian Gulf emirate together shed more than a quarter of their value last year, the report shows. An ADIA spokesman declined to comment.

The paper, an advance copy of which was obtained by The Associated Press, estimates that the six members of the energy-producing Gulf Cooperation Council saw their holdings shrink by US$82 billion to US$1.2 trillion in 2008. The trend could continue.

"All these funds now look likely to shrink in 2009, as the price of oil has fallen to the point where many Gulf economies will need to draw on their foreign assets to sustain their current level of imports," authors Brad Setser and Rachel Ziemba wrote. "Estimates of the Gulf's current and future external wealth consequently need to be scaled back."

The declines came even as the group - which comprises Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates -pulled in some US$300 billion in oil profits, the report estimates.

That is about US$70 billion more than they collected in 2007, when oil prices averaged around US$70 a barrel rather than nearly US$100 as they did last year.

The UAE's Abu Dhabi-based funds appear to be the biggest losers. Setser and Ziemba estimate that ADIA and a far smaller fund created to focus on domestic investments held a combined US$328 billion at the end of 2008 - a considerable decline from the estimated $453 billion they held a year earlier.

Global Arab Network