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Gulf Investments Needed by All World Markets
The US election results have no bearing on US investment incentives

   Recent studies affirmed that Gulf countries have adequate expertise and financial resources that enable them to develop sound foreign investment plans and diversify their economies. Arab and Gulf nations are in a good position to leverage their real estate and financial sectors, which have proved over the recent years to be a mainstay for growth and investments.

In its weekly report, Al Mazaya Holding said the results of the US elections would not have any bearing on the foreign and Gulf investments in the US market. According to the report, the US financial sector now suffers from massive and cumulative deficits worth $600 billion for the current year, which equals 3.3% of the US GDP, a situation that would prompt the new US Administration to launch new channels of investments with world countries – including Gulf states – in order to weather the economic challenges it is facing.

The report added that Gulf investments play a major role in leveraging the US markets due to their considerable volume, long-term presence and impact, which advantages necessary for any economy to ensure positive results. The report estimated that the total foreign investments in the US economy was at $3.1 trillion at the end of 2015, which demonstrates, in no uncertain terms, the momentum provided by the US administration to maximise the volume of investments that are projected to increase in the future.

The report shed light on the direct and indirect Saudi US-bound investments, being the largest all over the region. Statistics reveal that Saudi treasury bills and investment bonds as well other assets rose in comparison with the last year to $750 billion, with treasure bonds alone accounting for $118 billion by the end of the first quarter this year. Furthermore, Saudi financial security investments overseas exceeded a total of $388 billion due to the improved value of the assets invested abroad, which exceeded SR3.7 trillion by the end of 2015.

The report added that the Saudi foreign investments generated considerable returns, hitting SR89 billion by virtue of their diversity and improved performance, advantages that reflect positively on the markets and contribute to reducing the budget deficit triggered by the declining oil prices back home.

The report termed the Qatari investment plans as the most efficient all over the region in terms of geographic distribution, diversity and target markets – advantages that ensure resilience and buoyancy in a way that keeps risks and losses to a minimum and results in tangible achievements. The report noted that Qatari investments target major world cities and are centered on the financial, banking and real estate sectors. Moreover, they have expanded to include the agricultural sector, coal mining, oil and gas, automotive companies and major world sports clubs. The US market is still attracting Qatari investments, with the Qatari Investment Authority and a number of Qatari companies recently striking big deals worth $15 billion in the US. The report added that Qatar is planning to invest up to $35 billion over the coming five years and to increase its investment volume in a way that goes in-line with US investment planning.

The report termed the UAE investment and wealth management plans as a model that should be copied regionally and internationally, thanks to their diversification and attractiveness, which made the country a favourable investment destination hub. The report mentioned that the volume of UAE investments in the US is not big enough, which consequently safeguards its economy from any potential risks.

The type and nature of investments in foreign and Arab countries are governed by a set of agreements and legislations that all parties concerned have to abide by and any exposure to any types of risks would lead to an investment exodus from the US economy – disastrous sequels which the new administration certainly wants to avoid by steering clear away from any uncalculated measures that could pose serious harm to the economy. In this regard, the report cited the consequences of Britain’s leaving the European Union and its positive impact on other markets that provide considerable investment incentives.

According to the report, the development plans adopted by the region’s countries are conducive to providing investment momentum and an attractive edge by creating multiple investment opportunities that would enable Gulf businessmen to have access to European markets such as Turkey and other developed economies like China, Japan and Singapore, instead of confining their investments to US markets.

The report expected that the Gulf markets would not be impacted by the policies of the new US administration which, the report stressed, would not take any risks that might get its economy mired with any financial crises that could have a negative impact on its local and global economy.

The report concluded by underlining the importance of separating politics from economics in dealing with the US market, stressing that the US economy is in need of Gulf and other foreign investments that would ensure sustained and high economic returns.