International Monetary Fund (IMF) Executive Manager Hazem Al-Beblawi said that nations that carry budget surpluses should focus on investing in tangible assets instead of liquid assets like stocks and bonds.
Tangible assets like factories and goods, can be used in productive projects that later transform into liquid assets on the ground, he said in a discussion forum organised by the Kuwait Economic Society on Tuesday.
These can benefit the community, and without them, one cannot use liquid assets kept at banks, he added.
Al-Beblawi critisised Gulf states for using most of their financial resources, resulting from the sale of oil, in investments that are "far from a productive reality" and that are tied to the US dollar.
This has many dangers, he said, as the rise of the dollar lessens the value of the products being sold, and this in turn affects the exchange rate of the local currency in the decline.
Gulf states can lessen their dependency on the dollar if these resources were spent on building factories, bridges, roads, on human development or on launching projects in developing nations that offer the local community goods they may require, he explained.
Source: KUNA