Speaking at the three-day annual Gulf Petrochemicals and Chemicals Association (GPCA), Al-Zamil said that Saudi-Arabia's conservative investment policy has saved the kingdom from the full impact of financial crisis. He urged all members of the Gulf Co- operation Council (GCC), to build up their own industries and to export "petrochemicals and pharmaceuticals, rather than barrels of oil," said Al-Zamil.
The industry tycoon added that oil was sold Thursday in Europe at world market prices of 110 U.S. dollars per barrel although it is only stored there, "but the GCC states have much higher costs and less benefits from exporting pure barrels."
Unlike sovereign wealth funds in Kuwait, Abu Dhabi or Dubai, Saudi Arabia hosts the world's largest petrochemical producer, Saudi Basic Industries (SABIC). According to research data compiled by the GPCA, petrochemicals account for 72 percent of Saudi Arabia's non-oil exports, compared to 61 percent in Kuwait and 9 percent in the UAE.
Investing most of oil export revenues abroad and hoarding money on bank accounts was the wrong way for the GCC, said Al-Zamil. " Look at Libya, it lost billions by investing abroad. Look at the Kuwaiti banks or Dubai, both of which were hit badly by the global financial crisis," he said, adding that public funding by the Saudi government paid off in 97 percent of all projects, while " global shopping tours" were much more risky.
In fact, Kuwait's largest investment bank Global Investment House, which avoided a near-bankruptcy in 2008 after suffering losses in foreign exchange trading, has still not overcome the crisis as the lender agreed a week ago with creditors to restructure 1.7 billion dollars of debt. State-funds of the emirate of Dubai and Abu Dhabi divested from a number of engagements abroad.The Abu Dhabi sovereign wealth fund Aabar Investments sold its remaining 3 percent stake in Germany's Daimler AG in October.
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