ID :
9312
Tue, 06/03/2008 - 14:16
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https://oananews.org//node/9312
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US Treasury Secretary Henry Paulson woos Gulf investors
Abu Dhabi, Jun 3, 2008 (WAM):U.S. Treasury Secretary Henry Paulson defended on Monday the American economy and the US dollar's role as world's reserve currency.
He said that despite the challenges faced at home and on the global level, the US currency and its economy still remain strong.
In a prepared speech on "Open Investment" delivered before the US-UAE Business Council in Abu Dhabi, Paulson also said that surging oil revenues have led to a massive accumulation of capital in the Gulf in a very short time.
"To put this in context, GCC countries will provide about 18 percent of global capital exports in 2008 -- more than double their share just five years ago"; he said Paulson said that this gives the GCC countries an opportunity to diversify their economies and make needed investments in human capital -- steps that should help avoid the boom and bust cycles of the past and support broad based growth.
"Many of the region's leaders are embracing this opportunity by paying down debt, setting aside wealth for future generations, increasing health and education spending, and improving the environment for foreign and domestic private investment".
At the same time, he said that the record high oil prices are putting a large burden on the world economy and creating hardships for families, households and industries everywhere. This threatens to exacerbate economic volatility in the Gulf and abroad.
Paulson admitted that the Gulf region alone cannot alleviate the pressures in global oil markets.
'High oil prices are the result of supply and demand factors that are likely to persist for some time. Supplies have been affected by low capacity expansion and declining yields, while demand has surged largely due to growth in emerging markets.
Speculation and the depreciation of the dollar are likely onlysmall factors behind oil price increases'; Paulson stressed.
The US Treasury Secretary underscored the need for developing alternative sources of energy.
"We also need to invest in renewable fuels and alternative technologies and to reduce oil dependency through improved energy efficiency".
Paulson urged oil producing countries to open oil markets to foreign investments.
'The UAE is a case in point. As an important first step, Abu Dhabi is financing massive investments in upstream production and domestic refining capacity through partnerships with foreign companies. More liberalization along these lines would benefit all oil producing countries. In the case of the UAE, the United States isbenefitting too; U.S. suppliers of oil and gas field equipment and services are 45 percent of the UAE's total imports'; he said.
He noted that in the two years following DP World, the number of U.S. acquisitions by Gulf country investors rose by more than 100 percent and the combined value of those deals rose by more than 400 percent.
"Despite what the headlines may say, our investment review process has looked at just over 10 percent of the publicly announced acquisitions by Gulf investors, and all of those transactions were allowed to proceed"; Paulson said.
He added:" In order to continue to benefit from sovereign wealth fund investment, we proposed that the International Monetary Fund develop a set of credible, best practices for these funds. The IMF expects to produce these recommendations this fall. I will expand on this issue for a moment because our objectives are not alwaysfully understood".
'Among some sovereign wealth fund managers, our initiative has raised concerns that we are trying to limit the scope of their activities or release privileged information. In fact, our purpose is just the opposite.
" Paulson made special mention of the Abu Dhabi Investment Authority for its constructive role in opening to world markets and embarking on investments in several vital projects abroad.
Speaking about the U.S. Economy, Paulson said: 'The U.S. economy is going through a rough period � after six straight years of almost 3 percent average annual growth, our growth rate slowed significantly late last year. We are facing a trio of headwinds - a housing correction, capital markets turmoil and high and rising energyprices'.
He said that a number of initiatives have been adopted to correct the downturns and the stimulus packages will give support to individuals and businesses.
"Our long term prospects remain strong"; Paulson stressed.
Speaking on currency markets Paulson said that the United States is committed to a strong and stable international financial system.
"I recognize that well-functioning and orderly currency markets are an essential part of this responsibility".
Paulson noted that the U.S. dollar has been the world's reserve currency since World War II for ample reasons.
Summing up, Paulson said: "I am committed to promoting policies that enhance the underlying competitiveness of the U.S. economy and ensure that the dollar remains the world's reserve currency".
He said that despite the challenges faced at home and on the global level, the US currency and its economy still remain strong.
In a prepared speech on "Open Investment" delivered before the US-UAE Business Council in Abu Dhabi, Paulson also said that surging oil revenues have led to a massive accumulation of capital in the Gulf in a very short time.
"To put this in context, GCC countries will provide about 18 percent of global capital exports in 2008 -- more than double their share just five years ago"; he said Paulson said that this gives the GCC countries an opportunity to diversify their economies and make needed investments in human capital -- steps that should help avoid the boom and bust cycles of the past and support broad based growth.
"Many of the region's leaders are embracing this opportunity by paying down debt, setting aside wealth for future generations, increasing health and education spending, and improving the environment for foreign and domestic private investment".
At the same time, he said that the record high oil prices are putting a large burden on the world economy and creating hardships for families, households and industries everywhere. This threatens to exacerbate economic volatility in the Gulf and abroad.
Paulson admitted that the Gulf region alone cannot alleviate the pressures in global oil markets.
'High oil prices are the result of supply and demand factors that are likely to persist for some time. Supplies have been affected by low capacity expansion and declining yields, while demand has surged largely due to growth in emerging markets.
Speculation and the depreciation of the dollar are likely onlysmall factors behind oil price increases'; Paulson stressed.
The US Treasury Secretary underscored the need for developing alternative sources of energy.
"We also need to invest in renewable fuels and alternative technologies and to reduce oil dependency through improved energy efficiency".
Paulson urged oil producing countries to open oil markets to foreign investments.
'The UAE is a case in point. As an important first step, Abu Dhabi is financing massive investments in upstream production and domestic refining capacity through partnerships with foreign companies. More liberalization along these lines would benefit all oil producing countries. In the case of the UAE, the United States isbenefitting too; U.S. suppliers of oil and gas field equipment and services are 45 percent of the UAE's total imports'; he said.
He noted that in the two years following DP World, the number of U.S. acquisitions by Gulf country investors rose by more than 100 percent and the combined value of those deals rose by more than 400 percent.
"Despite what the headlines may say, our investment review process has looked at just over 10 percent of the publicly announced acquisitions by Gulf investors, and all of those transactions were allowed to proceed"; Paulson said.
He added:" In order to continue to benefit from sovereign wealth fund investment, we proposed that the International Monetary Fund develop a set of credible, best practices for these funds. The IMF expects to produce these recommendations this fall. I will expand on this issue for a moment because our objectives are not alwaysfully understood".
'Among some sovereign wealth fund managers, our initiative has raised concerns that we are trying to limit the scope of their activities or release privileged information. In fact, our purpose is just the opposite.
" Paulson made special mention of the Abu Dhabi Investment Authority for its constructive role in opening to world markets and embarking on investments in several vital projects abroad.
Speaking about the U.S. Economy, Paulson said: 'The U.S. economy is going through a rough period � after six straight years of almost 3 percent average annual growth, our growth rate slowed significantly late last year. We are facing a trio of headwinds - a housing correction, capital markets turmoil and high and rising energyprices'.
He said that a number of initiatives have been adopted to correct the downturns and the stimulus packages will give support to individuals and businesses.
"Our long term prospects remain strong"; Paulson stressed.
Speaking on currency markets Paulson said that the United States is committed to a strong and stable international financial system.
"I recognize that well-functioning and orderly currency markets are an essential part of this responsibility".
Paulson noted that the U.S. dollar has been the world's reserve currency since World War II for ample reasons.
Summing up, Paulson said: "I am committed to promoting policies that enhance the underlying competitiveness of the U.S. economy and ensure that the dollar remains the world's reserve currency".
