Gulf countries use international investments as tools to advance their foreign policy goals, according to a report by a Turkish think tank.
“Gulf countries with varied investment instruments and economic incomes have been using foreign investments effectively for a long time,” the Ankara-based Center for Middle Eastern Studies (ORSAM) said in its report.
In the “Investments as Foreign Policy Instruments: The Cases of Saudi Arabia, The UAE and Qatar” report, Ismail Numan Telci, the think tank’s vice president and Gulf studies coordinator, and Gökhan Ereli, a research assistant, discuss the motivations of Gulf actors when making overseas investments.
In some cases, they try to influence the foreign policy decisions of Western countries, but in others, they use these investments to counter the spread of other Gulf countries in foreign countries, according to the report.
Gulf countries are motivated to invest globally if the move blocks regional or international rivals from expanding in certain contentious sectors, including port management, airlines, sports and energy, it said.
Touching upon the “investment race” between Gulf countries, the report said “Gulf states are entering an investment race by using their financial resources to stand out in their competition with others. In this respect, investing could be a result of a lasting policy or a reactive move to hold on to the competitiveness in the market.”
The ORSAM report also underlined that Saudi Arabia had been outperformed by the United Arab Emirates (UAE) and Qatar.
“While famous investments in England and France are particularly apparent in the field of football, it should be seen that the football investments of Abu Dhabi and Doha have long outperformed Riyadh. Along with sports investments, the Gulf states are also interested in shaping the national identities of their own,” it said.
As a strategy to support, strengthen and embellish the cities and emirates viewed as financial centers, cultural investments are made that include museums, various historical artifacts and projects, according to the report.
It added that motivated to have large fleets and a vast network of destinations, UAE and Qatari airline companies, namely Etihad, Emirates and Qatar Airways, have signed various agreements. “Just like investments in sports, Riyadh can be said to lag behind Abu Dhabi, Dubai, and Doha in this sense,” the report noted.
“Finally, foreign investments also constitute the project of diversifying the economic resources of the Gulf countries,” it also said.
The report underlined that the economies of Gulf countries are based on petrochemical products as well as oil and natural gas revenues.
As hydrocarbon energy faces the risk of losing its primary position in the sector in the long run, investors tend to lean towards long-term investment strategies, it added.
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