Investcorp chairman urges GCC states to push ahead with economic refor

27/03/2017 05:49 AST

GCC countries must collaborate and press ahead with economic and fiscal reforms as they attempt to mitigate the impact of lower oil prices across the region, the chairman of Investcorp has said.

Mohammed Alardhi, chairman of the Bahrain-listed alternative investment firm, said that policymakers across the GCC face three major challenges as they attempt to mitigate the impact of lower oil prices across the region – maintaining regional economic security, keeping up the pace and mom­entum of reform and maintaining stability.

"Streamlining the public sector, adopting a more restrained and responsible fiscal stance is essential," Mr Alardhi said. "It should go hand in hand with lab­our market and education sector reforms in order to secure more sustainable outcomes."

Speaking at the Emirates Center for Strategic Studies and Research conference "The Future of the Region: Oil Price Challenges", Mr Alardhi pointed to 2015 IMF data showing that the UAE had increased the contribution of non-oil revenues to the country’s GDP to 68 per cent.

"Although the adjustment differs in pace and intensity depending on domestic conditions, countries have started transforming their economies in phases away from oil-based dependent activities," he said.

"Saudi Arabia’s Vision 2030, UAE’s Vision 2021, Oman’s Nat­ional Program for Economic Div­ersification "Tanfeedh", and Kuwait’s economic and fiscal reform programme go in that direction, but still require proactive engagement, outreach and communication and greater involvement of local stakeholders in the policy process," he said.

Last year the Abu Dhabi fund Mubadala became the biggest single investor in Investcorp after it agreed in July to buy a 20 per cent stake.

Investcorp was founded in 1982 as a conduit for Arabian Gulf investors interested in acquiring international assets.

Last year, the company, which has about US$23 billion of assets under management, said it was attempting to take advantage of government cutbacks because of low oil prices to source investment opportunities by launching a US$800 million to$1billion healthcare fund focused on the Arabian Gulf region, among a number of other high-profile funds this year.

The National