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Oxford Business Group: The ink is barely dry on the big money deal that saw Abu Dhabi and
Qatar take a major stake in the UK's second largest
bank, Barclays. But this hasn't deterred Britain's Prime Minister from
asking this region for more financial help, this time for the IMF. Ben
Thompson reports.
Ben Thompson
This was a fundraiser like no other. Gordon Brown on a mission to the
Middle East to win support from the oil rich Gulf States and persuade them
to part with more cash to help the West. He wants the region to use its
vast oil wealth to contribute to an IMF bailout pot for countries with
failing economies. As more and more countries struggle to pay back their
debt, the existing pot simply isn't big enough.
Oliver Cornock, Regional Editor, Oxford Business Group
One of the major factors, which Gordon Brown has realized, as has everybody
else, the IMF is desperately short of money. There is a huge amount of
liquidity within this region, and it is time to try and drum up some of
that, according to Gordon Brown. The Gulf has a commodity which the world
needs. We live in a globalized era, and I think there has to be some
interaction, interdependency now.
Ben Thompson
But whilst the handshakes are welcoming and the smiles are friendly, asking
for money is never an easy job, and with the region still struggling to
assess its own exposure to the crisis, the timing of Gordon Brown's visit
has surprised many.
Mohammed Ali Yasin, Managing Director, Shuaa Securities
I really believe that today the response that you're getting from the
governments is that they're saying that, yes, we will be contributing to
this, but it is not an open check. We still have, I think it will be very
difficult for them to justify them putting money outside if they still have
some problems in their local markets. And today you have to remember that
those governments and some of their sovereign funds have been invested in
the West for a long time, and they got hit as bad as anybody else. So I
would say maybe somewhere toward the early first quarter 2009 would have
been a better time to have come and talk to them once you see that they
have stabled their economies.
Ben Thompson
So whilst the some region may have the money, it also wants something in
return. That could mean more deals like this one. Investors from Abu Dhabi
and Qatar paid more than $12 billon for a 30% stake in the UK's second
largest bank. So with some of the world's biggest businesses in desperate
need of cash, does this signal the start of a spending spree by cash rich
Middle Eastern investors? With share prices at record lows some experts say
they could now be eyeing up some prized assets.
Adeel Khan, Chief Executive, Potentia Inc.
They don't have any industry specification. They don't tie themselves to a
particular geographical location. So the world is their oyster. If they
will find a good deal, they will go. There will be so much activity in
trying to get that particular deal. They like good commercial deals, and
when they see it, they buy it.
Ben Thompson
And if the last few years are anything to go by, they'd be right. New
figures from the IMF suggest that regional investors and sovereign wealth
funds now hold assets worth more than $3 trillion, and that figure is set
to triple in the next five years. And so for the struggling economies of
the West and their cash starved businesses, a shopping spree from the
Middle East and the ready money that that provides couldn't come at a
better time.
Ben Thompson reporting there. And its businesses like those . . .