Building the new silk road

The Gulf States and emerging Asian economies are benefiting from the establishment of a “new silk road”, according to chief executive officer of Dubai International Capital (DIC), Sameer Al Ansari.

The original silk road was a vital channel for both international trade and cultural exchange between the Middle East andAsia and was a significant factor in the development of the great civilisations of China, India, Egypt, Persia, Arabia and Byzantium. DIC is confident in its revival.

“On the new silk road,” said Al Ansari at the PEIMedia / EMPEA EmergingMarkets Private Equity Forum in November, “petrodollars have replaced silks and spices”. He pointed to the“phenomenal increase in trade flows” as being key to the successful emergence and rapid economic growth of both the Gulf Cooperation Council (GCC) and the major Asian emerging markets, suggesting that the re-establishment of these trade routes will restore Indian and Chinese economies to their former glories.

“On the new silk road,” said Al Ansari at the PEIMedia / EMPEA EmergingMarkets Private Equity Forum in November, “petrodollars have replaced silks and spices”. He pointed to the“phenomenal increase in trade flows” as being key to the successful emergence and rapid economic growth of both the Gulf Cooperation Council (GCC) and the major Asian emerging markets, suggesting that the re-establishment of these trade routes will restore Indian and Chinese economies to their former glories.

Al Ansari cited compelling reasons for investors in GCC economies to feel confident. The region's projected oil revenues for the period between 2006 and 2010 are greater than the total for the previous 20 years, while in the last five years the GCC has grown from being a $550 billion economy to $1.2 trillion. Public sector spending has been falling, while non-oil sector growth has been on the rise, he said.

He was especially bullish about the GCC's trade links with India, an economy which DIC has been paying close attention to. InOctober the firmsaid it was poised to seal several Indian deals in the following six months as well as set up an Indian unit for one of its portfolio companies active in the oil and gas services sector.

DIC's faith in the strength of emerging markets has led to an intense period of recruitment in which it has grown from 30 people to 70 over the last year. Its emerging markets division – which is focused on investments in MENA, Eastern Europe, Latin America and Asia – expects to have $5 billion in capital under managementwithin the next three years. The firmcurrentlymanages assets in excess of $13 billion overall.