Foreign investments 'exaggerated' - Khalifa

EXAGGERATED REPORTS: Sheikh Khalifa (pictured) has said reports of the UAE's vest foreign investments were

UAE President Sheikh Khalifa bin Zayed Al Nahyan has described reports of the UAE's vast foreign investments as "exaggerated" and denied any of the country's investments were politically motivated.

Sheikh Khalifa said investments abroad "operate as per economic and not political basis", state news agency WAM reported on Saturday, citing an interview with Lebanese newspaper Al-Nahar.

"The UAE clearly states to its partners abroad that these long-term investments are obligations of the UAE towards coming generations," he was quoted as saying.

The UAE, and Abu Dhabi in particular, is home to some of the most powerful and high-profile state investment funds in the world.

Buoyed by a revenue windfall from record oil prices, which have jumped almost seven-fold since 2002, the UAE has been investing the proceeds in companies and industries around the world as the government looks to diversify the economy and reduce its reliance on oil.

Abu Dhabi is home to the world's biggest sovereign wealth fund (SWF), the Abu Dhabi Investment Authority (ADIA), which is reported to control assets worth in excess of $875 billion.

SWFs' growing influence has raised concerns in the West over transparency and accountability, with some claiming foreign governments may harbour political motivation, an accusation the funds have repeatedly denied.

Sheikh Khalifa also denied there was any underlying political agenda to defence pacts the UAE has with other countries.

He said the Gulf state's cooperation agreements with a number of countries was "an opportunity to diversify sources of military equipment", reported WAM.

The UAE in January signed an agreement with France to cooperate on the development of atomic energy, as well as allow France to set up a military base in the Gulf state.

Asked whether the UAE government would will encourage its private sector to invest in Lebanon, Sheikh Khalifa said the government would not interfere with the private sector, WAM said.

He said the UAE was keen to invest in Lebanon, but security and stability were the prime factors deterring investment, according to the news agency.

"There is willingness from Arab and foreign countries to invest in Lebanon and to help it to overcome the economic and financial hardships, as soon as an environment of security and political stability returns into that country," Sheikh Khalifa was quoted as saying.

Sheikh Khalifa also said there was no need to set up new funding bodies to support Arab countries, stating that there were already sufficient national and regional funds for this purposes, WAM said.

"Whenever there is proper political, legislative and administrative atmosphere, the private sector initiatives would increase," he was quoted as saying.

Lebanon in May ended a tense 18-month political crisis that drove the country to the brink of civil war, when 65 people were killed in sectarian violence.

Rival factions reached a deal in Doha that led to the election of army chief Michel Sleiman as president, but parties have still to form a unity government and sporadic fighting continues in parts of the country.

Sheikh Khalifa described the deal struck in Doha as a "victory to the Arab solidarity", WAM said.

On the restoration of the UAE's diplomatic representation in Iraq, Sheikh Khalifa stressed UAE-Iraq relations had continued despite and absence of diplomats "due to security conditions" and that the UAE was keen to see Iraq boost its contacts with the Arab world.

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