By IPS Correspondents
ABU DHABI, May 7 2003 (IPS)

More than $60 billion is to be invested over the next five years within the Gulf Cooperation Council (GCC) countries, Easa Abdulfattah Kazim, Director General of Dubai Financial Market (DFM), told the International Investment Summit which concluded in Dubai, the United Arab Emirates (UAE) yesterday.

He said there were 32 projects in the GCC in 2001 alone that required $15.5 billion in long-term financing. He said the regional capital markets need to be developed to provide an alternate source of funding to bank finance, according to a report in the ‘Khaleej Times’.

He added: "The role of GCC capital markets has been relatively modest in financing operations and productive investments of the private sector as compared to the role of the banking sector." There are only 393 listed companies in the GCC with a market capitalization of $150 billion. The GCC capital markets compare unfavorably with capital market ratios of states as diverse as Taiwan, UK, Japan, Singapore and Hong Kong.

The official said: "Governments in the region are short of money for investments. Capital-intensive sectors such as telecommunications, petrochemicals, airlines, water and electricity require longer term financing. Regional capital markets can fuel economic growth and development, mobilize capital, facilitate wider distribution of wealth and promote cross-border investments."

Esam Janahi, Chairman of Bahrain Financial Harbor and CEO of Gulf Finance House, said $1.3 billion of private sector money remains parked outside the Arab world due to lack of opportunities and a negative approach.

Ziad Makkawi, Executive Managing Director of SHUAA Capital, said the GCC asset management industry is in its infancy. The industry is expected to grow to up to $80 billion in seven years from the present $10.5 billion.

Naser Al Nabulsi, CEO of Dubai International Financial Centre (DIFC), said there was need to focus on how to build world-class capital markets to the likes of London, New York and Tokyo.

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