Kuwait Investment Boss Slams German Restrictions
May 18, 2008
Sheikh Badir al-Saad told Der Spiegel magazine in an interview released Saturday, May 17, "At the moment we are happy to invest in Germany. But in the future, any regulation of sovereign investors could reduce our commitment to your country."
He was speaking before a meeting this week with German Finance Minister Peer Steinbrueck on Berlin's plans.
Berlin sees the risk that state-run funds like KIA can have political and not just economic ramifications. A legal revision is in the works that would allow the German government to fend off disagreeable investors who demand more of a say in sensitive business sectors.
Steinbrueck visited both Kuwait and Dubai this week with the intention of finding out where the ever-growing oil profits are being invested -- and how Germany can best compete for a piece of the pie without incurring political consequences.
The KIA invests the revenues from Kuwait's oil exports. Saad said plans to limit sovereign-investor ownership of key industries "punish us for something we have not done."
He said state funds like his had never caused any world financial crises, whereas hedge funds and speculators had done so.
The KIA had been investing in Germany for 45 years and owns, for example, a 7.2 percent share in carmaker Daimler. It has also proven to be reliable in crisis situations: Steinbrueck pointed out that the fund was instrumental in stabilizing troubled institutions like Citigroup and UBS.
"Now we feel unwelcome," Saad said.