Page 63 - Aamir Rehman Gulf Capital and Islamic Finance The Rise of the New Global Players

48 PART I Background and Context

KEY LESSONS

■ The economies of the Gulf have humble origins, but achieved rapid pros-
perity during the oil booms of the 1970s and 2000s.
■ Successive oil booms have enabled the Gulf to enjoy large budget sur-
pluses, build reserves, and make foreign investments of close to $2 trillion
in value by 2006.
■ The Gulf’s foreign wealth is expected to grow significantly in the coming
decade—nearly doubling from its 2006 level even if no new investments are
made, and growing by over 300 percent at an average oil price of $70 per
barrel.
■ Although the global recession has slowed economic growth in the region,
key GCC economies continue to enjoy surpluses—a stark contrast with
growing deficits in the world’s largest economies.
■ The GCC’s reserve advantage and low production costs make it more
important over time and enable it to generate revenue regardless of
whether global oil prices are high or low.
■ The Gulf region has been deeply affected by the global financial crisis and
economic recession, and has a limited set of policy tools available for
addressing the situation.
■ Gulf investors enjoy a significant and growing amount of dry powder that is
available for ongoing investment activity.