Saudi wealth fund to focus on domestic investment

Saudi Arabia is planning to set up a sovereign wealth fund worth just $6 billion because its main investment focus is on domestic projects, the central bank governor was quoted saying this week.

"At this stage it is on the drawing board and it's not going to be sizeable. It will be around $6 billion only and run by the Public Investment Fund," Hamad Al-Sayyari, head of the Saudi Arabian Monetary Agency (SAMA), or central bank, told the Oxford Business Group in a report sent to newswire Reuters on Friday.

Some Western politicians have expressed concern about how the authorities in countries such as China, Russia and the Gulf states, which have amassed huge reserves from trade surpluses, will manage foreign investment of their wealth funds.

The Abu Dhabi Investment Authority (ADIA) is thought to be the largest sovereign fund in the world, controlling assets of over $800 billion.

Friday's report said Saudi Arabia's main concern is "to focus on domestic development, economic diversification and job creation".

Sayyari's deputy, Mohammed Al-Jasser, said in January the kingdom, the world's biggest oil exporter and a key US ally, was planning to set up the fund.

Apart from the planned fund, Saudi princes and businessmen have already expanded investments abroad in recent years. (Reuters)

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