The oil producing countries, which have been accumulating mountains of cash in the last few years, are the real heroes and saviors of big financial houses. Two large financial institutions Citicorp and Merrill Lynch were saved by Arab oil countries and some rich Asian nations. Together Kuwait, Abu Dhabi, Singapore and South Korea contributed more than $21 billion to save the two banks from crumbling due to nearly $69 billion sub prime mortgage fiasco in the USA.

The rich oil producing countries dropped their parachutes in the form of cash to these banks without any hesitation with an eye on long-term benefits. This is despite the fact that some institutions and governments eye us differently and are unfriendly when we want to invest in their ports or in their oil infrastructure due to lack other real viable alternatives. Investing in the USA and the West is the only means so far until China and the rest of Asian countries provide an alternative or a second choice. The extra cash that is coming from sovereign wealth funds is still not that huge and represents a small portion about 2 percent or about $3 trillion of the total $162 trillion traded globally but it was enough for preventing world class institutions from going under.

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Transparency and money moving mechanism from one region to another is today’s trade mark. It will continue and the oil producing countries sovereign wealth fund owners along with Singapore and other rich Asian countries are increasingly becoming some sort of catalyst in the financial markets and are playing important roles. They should be encouraged and be given all opportunities available. The West along with the USA should not object nor close the windows of opportunities to these investors. The West need not fear them nor misjudge their good intentions.

Preventing investments in US ports and oil sector should be something of the past. Owners of sovereign wealth funds of $3 trillion value should be given every opportunity as they proved their good intentions and can play by the rules and regulations set by the USA and the West. Our message is loud and clear — we oil producing countries are making mountains of cash due to your purchasing of our oil and we are almost putting back the money in your banks and your financial institutions without any complaint. We wanted to invest more but, alas, you did not permit us. We will certainly try again and we will play it in your own field with your own rules. It’s the money of our future generations but we believe in making good economic judgments.

naftikuwaiti@yahoo.com

By Kamel Al-Harami
Independent Oil Analyst