Stellar future seen for GCC businesses as US star continues to wane

She named New York, London, possibly Dubai and a split race in the Far East between Singapore and Hong Kong when asked at the Leaders in Dubai Business Forum 2007 to name what she thought would be the financial capital of the world in 2017.

She said the best was yet to come in the Middle East, where governments had done an outstanding job in diversifying their economies and creating a powerful investment culture. As a result, the UAE was making a significant impact on the global economy.

Ms Krawcheck told the audience that a number of factors meant the United States' previous dominant role as the world's leading economy was coming to an end.

Changes in population demographics, freer trade arrangements and the entrance of new players in the financial markets were all key drivers in this change.

The Chinese economy had grown by more than 10%annually year on year for the past 30 years and there was no sign of a let up. By 2050 China would be responsible for half of the world's GDP, up from 12% at present.

She said China was moving the equivalent of the entire US population from rural to urban areas every few years, and the number of billionaires in China had grown from 15 last year to 100 this year, thanks to the opportunities provided by freer trade agreements.

GCC countries also featured prominently in the high net worth stakes with 6.1% of UAE residents being millionaires, 5.2% in Qatar and 4.8% in Kuwait. The average net worth of the wealthy in the GCC was twice as high as that of the rest of the world at $1m compared with $400,000.

Ms Krawcheck said among the new players in the financial markets were the sovereign funds and there was none bigger than the Abu Dhabi Investment Authority which was believed to have $800bn invested around the world, including a $3bn minority shareholding in US private equity firm Blackstone.

When questioned, she said the US needed to recognise who its friends were and shouldn't have its financial borders so closed as to prevent greater offshore investments from them.

She said emerging markets have shown their resilience in the wake of the sub prime mortgage crisis in the US, with the GCC being hardly affected. Any local effects from the sub prime fallout were at least three months overdue, which demonstrated that the rest of the financial world was now not automatically badly affected by market shocks in the US.

Leaders in Dubai Business Forum 2007 is supported by Founding Sponsors: Citi Private Bank and Nokia; Leading Master Developer: Dubai Properties; Headline Sponsors: Addax Bank, Bidaya and The Monarch Dubai; Supporting Sponsors: Omniyat, Ithmar Capital, Al Barari, Damac Properties and Dubai Real Estate; Official Technology Partner: Fujitsu Siemens; Knowledge Partner: SP Jain; Official Event Courier: TCS.