Investment purchasing power peaks in crisis

Dead Sea, Jordan: The purchasing power of investment money is at its highest ever and there are tremendous opportunities across the world, said the executive chairman of Dubai Group, Soud Ba'alawy.

Ba'alawy was speaking at a discussion about the role of the Middle East in the world economic order after the international financial crises, at the World Economic Forum (WEF) being held at the Dead Sea in Jordan. Dubai Group is a diversified financial services company.

Ba'alawy pointed out that the UAE was one of the biggest economies in the Arab world and had successfully diversified into trade, services and tourism, among other industries.

He added that one of the strengths of the UAE had been its ability to create global companies - like telecommunications giant, etisalat.

"They will continue to invest across the world. What is interesting is that the world has changed and there is a tremendous amount of opportunities [but] the key thing is that financing these opportunities will have to be done through equity and with less debt," he explained.

He also noted that the purchasing power of investment money was at its highest ever, with companies that were worth hundreds of billions of dollars, now going for a fraction of the price in the wake of the crises.

While acknowledging that the international economic crises would impact on the region, Ba'alawy said the Middle East had the potential to bounce back much quicker than the developed economies.

"We are looking to invest in the Middle East," he said, but made it clear that the group was in no hurry and was concentrating on preserving capital while looking for new opportunities.

For now, the recovery of the global economy depends on the revival of the United States.

Ba'alawy explained that there was ample liquidity in the banking system, but that it had not moved from "banks to corporations to customers. Its going to take a while, but once it sinks into the system [and] with really low interest rates, the potential for the recovery is going to be much higher."

He believes that the Middle East will "step-by-step" emerge as a key player on the world economic stage.

International organisations, like the Group of 20 (G20) countries "can't afford to not listen to the Arab world because we are an important economic bloc with respect to oil and gas reserves.

"[The region] also has large capital reserves that the developed world needs, and it's impossible for the Arab world to invest only in the [Middle East] because there are not enough opportunities," he said.

He pointed out that commerce and profit generation were the basis for a sustainable relationship between the Arab world and the international community, that would give the Middle East an opportunity to build its role in the new world economic order.

"My view is that the Middle East has the necessary ingredients to play a bigger role, but the onus is really on us and how we want to play that role," he explained.

His view is that to build the economy of the Middle East, the countries of the region are going to have to invest in infrastructure and education for its relatively young population.

"Once you build it this way, you have a sustainable economy. It takes a long time, but it's very necessary for us to do so," he said.