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For long the GCC member nations had relied on the US and the European commercial bankers to manage their petrodollars. However, with the recent boom in the financial liquidity in the middle-east or the GCC region, the member states have started strategically managing their petrodollars themselves. These member states have adopted ambitious investment strategies and want to establish the Gulf as the center of international trade and finance. At the same time these states want to invest in foreign countries to capture the knowledge, technology and understanding of the global business environment and want to leverage these to achieve their regional goal. As we go along the summary we will see what these nations are actually doing to accomplish their goals.
The GCC member states are buying more and more corporate assets of the Western organizations. They have invested more than $60 billion since 2004 in the western business organizations. For example, Saudi Arabia based Saudi Basic Industries Corporation (SABIC) acquired US based GE Plastics for $11.6 billion. The Abu Dhabi based Mubadala Development Company acquired stakes in the private equity firm Carlyle group and the chip manufacturer AMD.
Apart from investing in the west, the middle-east countries have also invested large sums of capital in Asian and other emerging markets. For example, Kuwait is building a $5 billion refinery in the Guangdong province in China. On the Hainan Island in China, Saudi Arabia is setting up crude oil facilities with a capacity of 30 million metric tons. Since India shares strong diasporic links with GCC states these member states are strengthening their trade relations ...