Evidence shows that the sovereign wealth funds at the disposal of the Gulf states remain as solid as ever. This is contrary to assertions of a material change in their wealth on the back of a drop in oil prices since the second half of 2014.

True, budgetary deficits are going to be there brought on by oil price levels, with the petroleum sector contributing about two-thirds of the treasury income. The shortfalls are being dealt with via a series of measures including revisiting state subsidies, lower expenditures and seeking debt facilities where possible.

In fact, the fiscal challenges are providing GCC authorities with the long-awaited opportunities to re-engineer generous subsidies extended to nationals and non-locals on commodities like meat, petroleum products and utilities, notably electricity. The UAE assumed the role model by lowering fuel subsidies and developing a formula where retail prices are reviewed monthly. If any, officials opted for lowering prices over the past few months reflecting market trends.

With the exception of Saudi Arabia to some extent, there is no talk of drawing on state reserves to help bridge the gap between revenues and expenditures. The Saudi fiscal system in 2015 must deal with the phenomenon of relatively low oil prices together with steady spending, partly to finance the war in Yemen.

Amazingly, the outstanding value of SWFs held by GCC countries amounted to $2.8 trillion in September versus $2.7 trillion at the start of the year, according to the Sovereign Wealth Institute.

This is substantial and constitutes 38.1 per cent of the total SWFs in the world, in turn put at $7.2 trillion. Their contribution was 37.6 per cent in January.

The UAE is one of the leading lights when it comes to sovereign wealth. The country has amassed some $1,215 billion by the latest count, accounting for an exceptional 44 and 16.7 per cent of total SWFs at the GCC countries and global levels, respectively.

The breakdown of SWFs has Abu Dhabi Investment Authority with $773 billion, Investment Corporation of Dubai ($183 billion), Abu Dhabi Investment Council ($110 billion), International Petroleum Company ($66 billion), Mubadala Development Company ($66 billion), Emirates Investment Authority ($15 billion) and RAK Investment Authority ($1 billion).

The SWFs are bigger than the country’s GDP of $400 billion.

Three GCC member-states maintain sizeable reserves, namely the $677 billion for Saudi Arabia, $592 billion for Kuwait and $256 billion for Qatar. This means only Saudi Arabia has experienced a drop in SWF, having reported $763 billion at the start of the year. Ostensibly, the kingdom had to withdraw to finance budgetary deficit and the war in Yemen.

Anyway, the UAE, Saudi Arabia, Kuwait and Qatar are ranked among the top 10 sovereign wealth generators worldwide.

The writer is a Member of Parliament in Bahrain.