The rapidly evolving situation in the Middle East continues to dominate headlines, raising important longer-term questions around capital flows, economic resilience and the stability of established geopolitical relationships.
During my current visit to Thailand, I had the opportunity to hear the Asian perspective on recent events from a number of senior bankers and government officials. Many have pointed to the profound shifts underway in the global order. The era of dominant blocs and permanent alignments appears to be giving way to something more fluid. Power and influence is becoming more widely distributed in a complex “networked” world and many countries are pursuing multiple new partnerships simultaneously.
I particularly appreciated my discussion in depth on these issues with Prof. Dr. Kriengsak Chareonwongsak, Founder of the Institute of Future Studies for Development, former member of Thailand's House of Representatives and eminent academic. He, like many others, felt that one of the important longer-term results will be to further support the case for the accelerating engagement between the Gulf and Southeast Asia.
This shift is already visible in the evolving pattern of capital flows between the GCC and ASEAN. ASEAN, with a population of over 700 million, now attracts more than $200 billion in annual FDI and is increasingly drawing capital from Gulf investors, as opportunities in other parts of the world become more complex and, in some cases, less compelling. At the same time, Gulf sovereign wealth funds, managing over $3 trillion, are allocating a growing share of their portfolios across Asia. As a result, the deepening of financial and business links between the GCC and ASEAN is becoming more evident in practice.
The general feeling was quite clear that, in a rapidly changing world, GCC-ASEAN cooperation is set to gather pace as part of a broader shift in the global economic order.
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