Can the Gulf weather the storm of US recession?

The US economic downturn is already taking its toll on global markets. In this issue of The Middle East three specialist commentators give their opinions on where the crisis in America will leave the oil-producing Gulf states. Skilled economic analyst, Moin Siddiqi, looks at the run-up to the crisis which has resulted in a scale of credit losses unparalleled in modern banking history. Jeff Black examines the Gulf’s exposure to a US downturn; while international financial expert analyst, Pamela Ann Smith, presents the case for why the oil-producing GCC states, while not immune, will be protected from the worst effects of the downturn

The US subprime meltdown and ensuing wider credit squeeze (i.e. the amount of money circulating in the banking system) has hit the balance-sheets of banks worldwide, thereby hurting companies and consumers alike. “Financial market strains originating in the US subprime sector – and associated losses on bank balance sheets – have intensified, while the recent steep sell-off in global equity markets was symptomatic of rising uncertainty,” the International Monetary Fund (IMF) stated.

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