A unified sovereign wealth fund (SWF) for the Gulf is the need of the hour, as is intervention by Gulf-based funds in their respective economies to save them from the effects of the global financial meltdown, said bankers and economic experts in the region.
The percentage of investment by these SWFs in local markets should be raised to between 20 per cent and 30 per cent from the current five per cent, especially after the funds suffered losses estimated in reports at $450 billion (Dh1.6 trillion), several bankers said. These losses might go up to $600bn should the Gulf SWFs try to liquidate the assets they picked up abroad, which have now turned poisonous.
Dr Ahmed Al Janahi, Deputy Group CEO of Noor Islamic Bank, was among bankers in the region advocating the establishment of a sovereign wealth fund, saying it would have a positive effect on economies in the region.
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