Sovereign wealth funds (SWFs) of the six-nation Gulf Cooperation Council (GCC) states are substantial enough on the one hand and have positive implications for regional and global economies on the other. In other words, benefits of these SWFs are not confined to GCC economies, as these investments in the form of deposits, own ownership of securities issued by authorities in the US and others as well as investments are all over the world.

By one account, combined value of various SWFs of GCC authorities surpassed US$1.7 trillion at the start of the year. Certainly, this is a staggering figure by virtue of being some $600 billion above the monetary value of gross domestic product (GDP) of GCC states put together.

The UAE in general and Abu Dhabi in particular is noted for amassing a substantial amount of assets through its SWF. According to the Sovereign Wealth Fund Institute, which tracks SWFs, Abu Dhabi Investment Authority (ADIA) is the richest of its kind in the world. Latest statistics and rankings released by the institute put ADIA’s assets at an exceptional $627 billion.

Interestingly enough, the Government Pension Fund of Norway follows suit with assets of $611 billion. Still, Saudi Arabia’s Sama Foreign Holdings is ranked second regionally and fourth internationally with assets of $533 billion.

Kuwait provides an example of a country putting a part of its SWF to use in 1990 in order to finance liberation war. In fact, the country’s authorities drew on the reserves to provide financial support to their citizens whilst being abroad during the occupation period. Yet, with nearly $300 billion in reserves, Kuwait Investment Authority (KIA) ranks number six worldwide in terms of amount of SWF. Launched in 1953, KIA is the oldest SWF of its kind in the GCC region.

In many respects, GCC economies practically redistribute revenues generated from petroleum sources via their SWFs. Suffice to refer to the ever-growing investments made by GCC member-state of Qatar nowadays. These investments cover real estate, hospitality and luxury goods amongst others.

Of all GCC countries, Qatar stands out of placing funds in numerous sectors and industries and across the world. It emerged recently that Qatari authorities opted depositing a notable $2 billion in Egyptian banks in order to shore up credit support for Egypt’s economy. Also, Qatar is noted for making public announcements of its investments reflecting a conscious state policy.

Also, GCC states have proven their willingness to use their SWFs to shoulder their international responsibility during critical times. Reference is made to GCC’s contribution of a special fund designated by IMF in the aftermath of the global financial crisis of 2008. It is believed that GCC states have made generous contribution to the fund deemed essential to provide assistance countries via credit in soft conditions.

Unsurprisingly, revenues generated from the numerous SWFs help achieving a key strategic goal for GCC economies, namely that of diversifying away from oil. To be sure, the petroleum sector, which includes all activities related to oil and gas, contribute about three quarters of exports, two thirds of treasury income and one third of GDP within GCC economies on average. However, oil dependency could only be worse but for all the positive matters relating to SWFs, in turn helping bringing in other sources of income.

What’s more, the Institute of International Finance or IIF projects net foreign assets of GCC states reaching as high as $1.9 trillion by end-2012 and for the first time ever crossing the $2 trillion mark in 2013. Net foreign assets are total assets minus liabilities.

The writer is a Member of Parliament in Bahrain.