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(The Saudi Gazette), 7 May 2008 -
Saudi
Arabia said it is setting up a $5.33 billion investment firm that may be
open to partners, and could initially focus investments in the technology
sector.
Finance Minister Ibrahim Al-Assaf
also urged countries’ to keep their doors open to foreign investment.
“What
we are setting up is an investment company, not a sovereign fund,” Al-Assaf
told delegates at a conference in the Saudi capital on Tuesday.
Saudi officials had previously
said the world’s biggest oil exporter intended to set up a $6 billion
sovereign wealth fund.
The finance minister told Reuters
on Tuesday that the country is “in a hurry” to begin the new agency. “It is
now being examined by the Council of Ministers. The approval should come
about within the usual timeframe,” he said.
“The
focus at the beginning may be on the technology sectors, especially in the
fields that could attract technology to the Kingdom in alliance with global
companies,” IAl-Assaf told Al-Arabiya television.
The focus would be on investments
inside the world’s largest oil exporter, where opportunities abound, he
said, adding foreign investment was not ruled out.
Sovereign funds, many based in
oil-producing countries as well as key Asian exporters such as China,
control between $2 to $3 trillion in assets.
The Saudi finance minister noted
on Tuesday that the new agency would be smaller than other state-owned
funds in the Gulf. “We would like to invest in profitable, low-risk
assets,” he told conference delegates, without being more specific.
“I
reiterate the importance of avoiding restrictions on flows of capital ...
whether these are coming from emerging countries or the opposite.”
Last week, the International
Monetary Fund and 25 sovereign wealth funds established an international
working group to draft best practice guidelines for state-owned funds.
The guidelines in governance and
transparency are aimed at helping ease worries about the funds’ growing.
In recent months, sovereign
wealth funds have shown they are also market stabilizers, investing
billions of dollars in Western banks such as Citigroup Inc, whose balance
sheets were hit by the financial market turmoil.
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