Page 85 - Aamir Rehman Gulf Capital and Islamic Finance The Rise of the New Global Players

CHAPTER 2 Entrusted Stewards 69

FIGURE 2.3

Saudi Arabia Holds about Half the Gulf Cooperation Council’s
Private Wealth

Estimated Private Investor Wealth by Country
Other GCC
States: 13%

Kuwait: 13% Saudi Arabia: 51%

UAE: 23%

Source: McKinsey Global Institute, 2008.

economy and about two-thirds of its total population. 34 Although
other Gulf states often get more attention, Saudi Arabia is clearly the
core market of the GCC.
Figure 2.3, based on McKinsey research published in 2008, esti-
mates the breakdown of GCC private wealth by country.
It’s noteworthy that the UAE, Kuwait, and Qatar—states with
substantial sovereign wealth funds and specialist GIVs—represent a
smaller proportion of the private wealth pool than they do of the SWF
pool. This insight reflects the fact that these three prosperous states
have immense natural resources but very small populations (Qatar’s
is roughly that of Manhattan, and the bulk of its residents are expatri-
ates), enabling the dramatic accumulation of state surpluses. Saudi
Arabia, with its population of over 27 million, has a much more sub-
stantial base of domestic needs to meet before it can apply govern-
35
ment revenues to savings and investments. At the same time, Saudi
Arabia offers a broader pool of private institutions and investors than
any other GCC state. Investment managers and corporations that
seek private funding from the Gulf must therefore look to Saudi
Arabia, as it offers the largest pool of potential partners. Although the
Kingdom lacks free zones and international financial centers like