From Business Recorder
''The long-standing support from petrodollars for Western financial markets is gradually waning as oil-rich countries favour recycling their windfall revenues closer to home and away from low-yielding developed economies mired in the debt crisis.
Following popular revolts in the Middle East and North Africa, countries like Bahrain, Libya and Kuwait increased domestic spending or handed cash outright to their citizens in packages totalling as much as four percent of gross domestic product. Saudi Arabia alone is spending $130 billion, or a staggering 30 percent of its GDP.
Even for those less affected by the turmoil, the domestic economy may be more attractive destination given faster growth. In the case of Qatar, where the economy is expected to grow 20 percent this year, the government is planning to spend $225 billion in the next five years on new infrastructure projects including road and rail networks.
Central banks, for their part, may be less keen to continue accumulating government debt, especially US Treasuries. United Arab Emirates central bank governor Sultan Nasser Al-Suweidi gave a rare insight into the oil producer's reserve management last month when he said Treasuries were low-yielding and unattractive. He also said separately that the UAE may consider diversify into China's yuan. The escalating eurozone debt crisis is also a source of worry.''
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