The Role Of Mid-Eastern Oil Money In Future World-Wide Mineral Development

The direct investment role of Middle Eastern oil producing countries in future world-wide mineral development probably will be a limited one for the next five years. Their needs and their longer range economic objectives substantially preclude any such risk taking ventures. There is, of course, the possibility of political in- vestment. One hears many rumors and doomsday calculations of what the Arabs might do with the rising accumulation of surplus funds. Up to now, this kind of investment has been more in rhetoric than in money. For the most part, oil producing countries of the Middle East have been, and will be, investing surplus funds with strong emphasis on the preservation of capital. They will seek security first and yield second just like any other prudent investor. In several respects, this is regrettable. A direct infusion of risk capital into mineral development, especially in the Third World countries, is a constructive way of enhancing their earning power which many desperately need just to stave off starvation. It would also be a good way of eliminating material shortages in the industrialized world. Most important of all, it would help to ultimately reduce inflation without imposing the hardship of recession. So why isn't it done?