Boston Globe- The decision by the world’s largest sovereign wealth fund to invest billions in struggling Citigrouphas highlighted the growing economic power of Arab Gulf states, awash with money because of high oil prices.
US officials have voiced concerns about such funds’ secrecy in the past. But the injection of money by the Abu Dhabi Investment Authority could help stabilize Citigroup Inc., the United States’ largest bank, as it struggles with billions in losses from America’s mortgage crisis.
The tension illustrates the broader dilemma the United States faces in deciding how to deal with such sovereign funds: It relies on their capital inflows to bolster the US economy, but some officials worry that foreign ownership of key US companies could jeopardize national security.
Analysts said Abu Dhabi’s minority investment appeared to be structured to produce the least possible backlash from politicians concerned about its strategic implications.
