Excerpts: Whither Arab wealth funds.Internet cables cut. Oil producers say
higher prices a need December 20, 2008
+++THE DAILY STAR (Lebanon) 20 Dec.'08:"Remove the veil from Arab wealth
funds",By Rami G. Khouri
QUOTE: The few Arab countries that control over a trillion dollars in
Sovereign Wealth Funds face some challenging decisions. . .their own and
neighboring Arab economies are not mature enough to absorb such large
amounts of money"
EXCERPTS:The full impact of the current global economic crisis on the Arab
world is likely to be very bad, because the major income sources of the
region are all dropping simultaneously. Oil and gas exports income is down
by over two-thirds, income from funds invested abroad and at home is down by
at least one-third, unemployment will rise everywhere, and remittances sent
home by workers from non-oil-producing Arab states will drop steadily in the
coming few years.
One aspect of the Arab economies that is widely discussed abroad yet is
almost totally absent from the domestic Arab public debate is that pool of
trillions of dollars in the so-called Sovereign Wealth Funds (SWFs). This
blackout situation has been slightly ameliorated with the publication this
week of a 25-page paper by a visiting scholar at the Carnegie Endowment for
International Peace's Beirut Center, Sven Behrendt, titled: "When Money
Talks: Arab Sovereign Wealth Funds in the Global Public Policy Discourse."
. . .
The few Arab countries that control over a trillion dollars in their SWFs
face some challenging decisions about how to invest those funds in the most
effective and prudent manner. Their own and neighboring Arab economies are
not mature enough to absorb such large amounts of money, and investing in
the West has resulted in political pushback and, this year, sharp financial
losses.
This would seem to be the moment for Arab SWF managers and their political
leaders to take advantage of the probably momentary leverage they enjoy
globally and regionally, to help rewrite the prevailing rules of
international financial investment flows. Three areas seem ripe for serious
reappraisal.. . . .
+++SAUDI GAZETTE 20 Dec.'08:"Internet cable cut - KSA hit" Agence France
Presse
QUOTE: " 'They [the cables] cover cover all the Middle East and India and
othercountries' "
FULL TEXT:CAIRO - Internet service in Saudi Arabia, Egypt, the United Arab
Emirates and other Middle Eastern countries was disrupted Friday after
submarine cables failed in the Mediterranean Sea. Three cables linking Italy
and Egypt failed for yet unknown reasons, Shaheed Al-Sateeh, a manager with
Reliance GlobalCom, the company that runs the service said. "We know three
cables have been cut. We still don't why or where. They cover all the Middle
East and India and other countries," said Sateeh, Middle East sales director
for the company. "We have no more information. A ship has been sent out to
locate the place where the cables were cut," he added. Egyptian news agency
MENA reported that the cuts happened off the coast of Sicily at 10:00 A.M.
(0800 GMT) on Friday. In January, five cables in the Middle East and Europe
were cut, causing Internet failures in the region. - AFP
+++SAUDI GAZETTE 20 Dec.'08:"Havoc, says Naimi "
QUOTE:"current price levels are threatening current and planned investments'
"
LONDON - With no end in sight as oil slid to its lowest level in almost five
years, Saudi Oil Minister Ali Al-Naimi, said Friday[19 Dec.] the current
price levels "are wreaking havoc on the industry and are threatening current
and planned investments."
. . .Prices fell despite pledges by the Organization of the Petroleum
Exporting Countries this week to remove 2.2 million barrels per day from its
supply, which will be the largest ever reduction by the producer group.. .
.Fair price
Naimi, reiterated that $75 a barrel was a "fair and reasonable" price for
oil. "It is the price that marginal producers need to maintain investments
sufficient to provide adequate supplies for future oil consumption needs.
When oil is priced lower, such as it is now, there will be less investment
and less future supply."
He said stable oil prices were essential to ensure long-term investment in
the energy industry. . . .[IMRA: Arab Gulf countries have over a trillion
dollars in Sovereign Wealth Funds for investment. See: The Daily Star
(Lebanon 20
Dec. "Remove the veil from Arab wealth funds"]
========================================
Sue Lerner - Associate, IMRA
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