While there is considerable enthusiasm surrounding every move made by rich Middle Eastern sovereign funds, capital movements in the opposite direction must not be overlooked. The Gulf Cooperation Council (GCC) Countries represent one of the fastest growing regions in the world.
While the US economy has stalled, the global economy has expanded at 4% to 5% annually for the past 5 years, according to the National Real Estate Investor. Worldwide, the number of high-net-worth individuals grew 6% in 2007 to more than 10 million. In the same period the number of people with more than $30 million in assets grew more than 8% to over 100,000. According to the World Wealth Report, published by Merrill Lynch and Capgemini, the assets of the wealthy are expected to grow by 7.7% annually to $59 trillion in 2012. Most of this growth is expected to be in rapidly expanding economies like those in the GCC.
As discussed in my previous posts, the regional governments have been very smart in how they spend the wealth generated from increased petroleum revenues. Considerable capital has been invested in critical infrastructure and industry, slowly but surely, transforming the region into a hub for trade, business, tourism, and finance.
The Goldman Sachs Group is one among many of the Western institutions that has been aware of such opportunities. In a recent move, the group launched a new proprietary fund to invest in select assets in the Middle East.
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2 comments:
Spot on as is much of Nima's analysis. Strongly suggest everyone reads 'The Post American World' by Fareed Zakaria (editor of Newsweek International). This will give some political context to an essentially economic phenomenon.
Haven't had a chance to read the book yet, but it's on my agenda for sure. Here's a short interview with Fareed about the book: http://www.youtube.com/watch?v=wA7srwym3Yk.
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