Government-owned or controlled investment vehicles known as sovereign wealth funds (SWFs) have become increasingly important players in the world economy in the last two decades. Among the best-known SWFs are those funded by hydrocarbon revenues in the member economies of the Gulf Cooperation Council (GCC), which comprises all of the Arab countries in the Persian Gulf except Iraq, namely Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates.

Several factors, including the decline in oil prices in recent years, have slowed the growth of the GCC’s SWFs. This slower growth could further diminish their governance and transparency standards, which are already weaker than those of other SWFs. 

Even before the recent sharp decline in oil prices and the COVID-19 pandemic, the GCC economies and their SWFs faced daunting challenges in adjusting to lower hydrocarbon revenues. The risk has increased that demand for energy exports by the world’s oil-producing countries will decline, leaving these countries increasingly vulnerable to fiscal difficulties. These long-term pressures have been compounded by the sharp decline in oil revenues and the expected drawing on SWF resources to help cover the fiscal consequences of the pandemic.1 Unless the GCC countries privatize some of their oil assets (as Saudi Arabia did with Aramco) and use the proceeds to fund their SWFs, the assets of the SWFs funded from oil and gas revenues are likely to decline, or at least grow at a slower rate, in the coming years. These trends could increase public scrutiny over their investment patterns, financial results, and governance. Efforts to improve their governance and accountability will be important to garner public support for these SWFs.

A companion Policy Brief assesses improvements in transparency and accountability of SWFs globally (Maire, Mazarei, and Truman 2021). It describes how the SWF scoreboard, originally devised by Truman (2007, 2008, 2010), is constructed and implemented. This Policy Brief focuses on the SWFs of the GCC countries. It compares them with each other and with other funds in terms of their transparency and accountability on the SWF scoreboard. It also examines the prospects for the continued expansion of the GCC funds and the implications of the likely decline in GCC oil and gas revenues in the coming years.