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When you look forward to 2012, after this year’s Arab Spring, what do you think we will see?
I think expectations on the political front, especially in the Middle East, need to be managed. Elections, when they do happen, will not necessarily mean full democracy is in place. Countries like Libya will need time to build the necessary institutions to make sure that they eventually become a functioning democracy. A similar case would apply to Egypt, where there are still many unknowns with the elections that will be going ahead pretty soon. Political uncertainty is relatively high.
This year has been a humbling experience for the Dubai Stock Exchange. What’s the outlook for the United Arab Emirates and other Gulf states?
think the performance of the stock market in the UAE has been pretty poor in 2011, not so much in terms of returns, but in terms of liquidity. The performance of the economy, on the other hand, has been much better. There has been a recovery in place since 2010. This year has been even a better year in many respects. But what I have seen in the UAE is that the windfall gains from higher oil prices have not really been spent. In the past, we saw high oil prices trigger an investment boom in these countries. I think a very interesting country is Qatar, which is growing around 18 percent this year. It is mainly driven by an increase in gas production. In 2012 we will see positive growth in the UAE, positive growth in Qatar, but it will be slightly slower than 2011. There is uncertainty regarding oil, and I think we have not seen a significant pickup in projects in the region.
Tell me how the sovereign wealth funds view next year. What is their mood?
I think the mood has been a very conservative one. Of course, the exception was Saudi Arabia, which went ahead with a very aggressive social spending plan. Qatar and the UAE were probably increasing their savings. As Asian markets become deeper and more mature, I think we are going to be seeing more and more Middle East investments finding a home in the East and not just the West.
We have just seen the passing of the crown prince in Saudi Arabia. Is there any question about stability within the royal family?
The king is in charge of Saudi Arabia, and he is still the main figure leading the country and leading politics. So there is no power vacuum or leadership vacuum in the country.