The combined value of sovereign wealth funds (SWFs) held by the Gulf countries remains as solid as ever notwithstanding the plunge in oil prices since mid-2014. Of the six, only Saudi Arabia sustained a drop in the value of its SWF. This possibly reflects the costs associated with the conflict in Yemen more than the effect of oil prices.

The kingdom has been preparing for the drop in prices and hence its revenues. Saudi Arabia has largely retired outstanding public debt during periods of relatively high oil prices, in turn allowing for budgetary surpluses. The kingdom recorded a surplus of $103 billion in 2012 and a deficit of $98 billion in 2015.

According to the Sovereign Wealth Institute, collective value of SWFs held by GCC countries stood at $2.9 trillion in June 2016 compared with the $2.7 trillion at the start of 2016 and $2.8 trillion during 2015. The development partly reflects the higher value for assets held by Gulf countries.

This represents a notable 39.5 per cent of the world’s total SWF, against the 38 per cent in 2015. The UAE leads with a substantial $1.2 trillion, accounting for 41 per cent of total GCC share and 16.2 per cent of the world’s sovereign wealth. These are the highest for any Arab and Muslim nation.

Of this, Abu Dhabi Investment Authority or ADIA is the primary source with $792 billion, with the other major source being Investment Corporation of Dubai’s $196 billion. This level of funds provides a cushion to all parties dealing with the UAE.

By one account, the size of the UAE’s nominal gross domestic product amounted to $430 billion in 2015 and projected to reach higher by the end of the year on the back of steady investments like those relating to Expo 2020. Noticeably, the value of its SWF is substantially higher than the country’s GDP.

These reserves help with generate the robust ratings assigned to the UAE by Moody’s and Standard & Poor’s. In May, Moody’s reaffirmed long-term issuer rating of Aa2 for the UAE, while S&P’s extended an AA rating for Abu Dhabi.

Turning to the other Gulf countries, Saudi Arabia has SWFs of $758 billion, split between $598 billion and $160 billion held by Sama Foreign Holdings and the Public Investment Fund, respectively. The fall in Saudi Arabia’s sovereign wealth concerns the holdings of Sama (or Saudi Arabian Monetary Agency). Estimates released by SWI suggest Sama Foreign Holdings sliding from $685 billion in June 2015 to $598 billion in 2016.

Still, last week’s bond sale of $17.5 billion says a great about global confidence in the Saudi economy. This was the government’s first international offer, which saw demand exceeding expectations and exceeds the $15 billion bond issued by Qatar earlier this year and the highest for an emerging economy at the time.

Kuwait has maintained its SWF at $592 billion. Qatar’s SWF has increased notably from $256 billion to $335 billion during the period, while Oman maintains a reasonable $40 billion. Bahrain lags behind others in such reserves.

The GCC countries are showing immense capability in maintaining steady SWF levels even in the current environment.

The writer is a Member of Parliament in Bahrain.