BUYING INTO AMERICA AND AMERICANIZING THEMSELVES (via Kevin Whited):

Gulf oil states ‘keep faith in dollar assets’ (Richard Dean, October 9 2006, Financial Times)

Gulf oil producers will continue buying dollar-based assets with their windfall revenues, but not all the money will flow into the US, according to Mohsin Khan, director of the IMF’s Middle East and Central Asia department. [...]

Mr Khan expects the Gulf to see real GDP growth rise to 7.2 per cent this year, partly because the IMF believes oil prices will remain at $60-$65 a barrel through to 2010, and partly because of structural reforms.

“There has been a fundamental transformation in the way [governments] are operating in this new oil boom. The state is not taking on the major share of economic activity. It is not becoming an employer of first resort or last resort.” Instead, governments were laying the groundwork and infrastructure for private sector development.

He said the key to the future of the Gulf Co-operation Council (GCC) – an economic bloc comprising Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE – was “that the private sector takes off and the private sector creates jobs”.

“They are investing in physical infrastructure but also in human capital infrastructure, developing education to develop the skills that will be needed not only today but tomorrow.”

The Reformation proceeds apace.

Posted by Orrin Judd at October 10, 2006 3:18 PM