Prime Minister Gordon Brown’s recent trip to the Gulf states is indicative of how far the international financial order has changed. PM Brown considers Gulf investment in the UK as key for job creation. Further, he called on the region’s massive sovereign wealth funds to assist in stabilizing the world market by contributing to the IMF’s recently created emerging market bailout fund. It seems that the UK view to Gulf investment is light-years ahead of Washington’s, witness the uproar when Dubai Ports World attempt to manage ports in the US. If the outcome of PM Brown’s trip means that Gulf investors will flock to London and look askance at New York, it will be the fault of no one but the political establishment.
It remains to be seen what effect the world financial crisis will have on the Gulf’s states ability to remain solvent, but it appears that for the foreseeable future, many in the now hobbled West will see giant Gulf investment funds as a last ditch economic lifeline.