(For other news from the Reuters Middle East Investment Summit, click on http://www.reuters.com/summit/MiddleEastInvestment08?pid=500)
By Lin Noueihed and John Irish
DUBAI, Nov 3 (Reuters) - From banks, to developers to oil firms, Gulf Arab companies said on Monday they were hit by the global financial crisis and falling oil prices, but robust growth and spare liquidity would help them weather the storm.
Top executives told Reuters Middle East Investment Summit that Gulf economies might see more consolidation and a slowdown in the real estate boom as confidence falters, but would probably emerge less battered than their Western counterparts.
"The two economies that can ride the storm are GCC and China. The GCC can cover their internal needs unless they are forced to commit their assets elsewhere," said Shuaa Securities CEO Mohammed Ali Yasin, referring to the six-member Gulf Cooperation Council, a loose political and economic bloc.
"You need to give those countries time to assess their environment, but if you try to get them to commit their extra liquidity then you're adding more pressure than they can handle, and you're just dragging them down."
Governments and investors from the world's top oil exporting region have faced growing calls to pour more of their cash into troubled U.S. and European firms and to boost the International Monetary Fund (IMF) that just a few weeks ago was busy imposing transparency conditions on their sovereign wealth funds (SWFs).
But Gulf Arab SWFs that have lost billions of dollars with their stakes in top Wall Street firms are also under growing pressure to inject liquidity into their own financial sectors and keep their economies growing until the worst is over.
"Governments of the region are earning billions a day from oil production but there are confidence concerns with banks not lending each other," said Majid Jafar, executive director of the United Arab Emirates' Crescent Petroleum.
"I think it is a temporary effect...there will be tempered exuberance and a flight to quality. Maybe we will not see as many huge projects announced as frequently as before but the majority will happen."
SAFE HAVENS?
Not only are more petrodollars now likely to be ploughed back into the regional economy, but some executives suggested that Gulf Arab countries, with their oil wealth and growing economies, could be seen as a safe haven by banks and companies too scared to invest their cash in the West.
"I don't see any reason why construction could stop. We have some safe havens in the region -- Kuwait, Abu Dhabi, Qatar -- they have very wealthy governments," said Yann Pavie, chief executive of Kuwaiti investment bank GulfMerger.
"Global banks, they have a lot of liquidity; they are just afraid to give it to anyone right now. This region will be the first to benefit from the global money coming back."
A real estate boom that has seen soaring property and rental prices drive inflation into double-digits across much of the Gulf could slow but demand for homes and offices has not and the region could still benefit from infrastructure investments.
Gone are the heady days of $150 a barrel oil, when Gulf Arab funds and investors announced ever more extravagant projects, but even if oil falls below today's $60 level, executives said the region could continue to grow. "It is still too early to know which direction we are going to go in -- where will oil prices stabilise at and will global credit resume back in this region?" Pavie said.
"The long-term view is still that oil prices will remain well-above $60. We're laughing at well above $60."
And whereas the United States and Europe are seeing airlines and lenders close down or seek emergency funds, some Gulf Arab firms are launching operations in luxury sectors. "Even at the level of oil that we've got here today in the $60s, the GDP (growth) is still forecast at 4.8 percent here," said George Cooper, CEO of Kuwait's start-up luxury airline Wataniya.
"We're optimistic, but we're not creating a mega carrier." (Additional reporting by Jason Benham, Ola Galal, Amran Abocar and Thomas Atkins in Dubai, and Ulf Laessing, Daliah Merzaban and Rania El Gamal in Kuwait, Editing by David Cowell)