t a time when the international economy leans increasingly towards the formation of economic blocs to protect national interests based on mutual concerns, we in the Arabian Gulf region may need to move faster towards regional economic integration than we perhaps expected.

The simple fact is that it is no longer a question of choice. For, as the dynamics of the world's financial markets, through instantaneous global communication, allow greater competition and a clearer focus on emerging markets, there will be a pressing need to develop financial markets throughout the region.

It is important that the UAE along with other countries in the Middle East and North Africa, establish regional stock exchanges that allow foreign participation. This would encourage not only foreign investors, but would enable some of the estimated $800 billion invested abroad by Gulf citizens and institutions, to return to the region. For within the next few years huge sums will be needed to finance the large projects that are planned, and which are essential for the future growth of the GCC states.

In that context, while the UAE has had no difficulty in attracting inward investment - exemplified by the number of international companies setting up their regional headquarters here, one of the most pressing issues facing the nations of the GCC must be this constant outflow of capital. Estimated by some sources to be in the region of some US$40 billion per year, we can only wonder at just how much of an impact such amounts would have had on the economies of the region had such financial resources been available earlier.

But the real question is just why is there such an enormous outflow of our capital, by our people, into other lands? Surely, there must be strong reasons for such investment behaviour. Perhaps, it is time for our governments to consider ways of attracting investment back into the region,

By providing the right incentives, and combining them with legal protection for investment within a sound regulatory framework, it is possible, given time, to put in place the mechanisms for regional capital markets. But it remains for us to determine a policy where we can make the most of its potential to give us a competitive edge.

For as we enter a stage of global competition, if we cannot even attract investments from within our own communities, how can we possibly go out and attract greater investment from abroad?