political mood has changed. therefore, we might see gradual tightening of the scrutiny on capital flows from swf countries, at one stage, especially funds that are destined for direct investment in certain companies. faced with all this nonsense, swfs will certainly come to the conclusion that it is time to change strategy. this could make swfs avoid direct investment in certain companies, or even avoid direct investment in all companies, and become more of passive investment vehicles in the west. as, swfs have large sums to invest, this might make them direct part of their investments to existing or newly created companies in the region. this situation, if it happens soon, will lead to creating a new regional developmental cycle. third : linking regional payment systems linking regional payment systems and using local currencies for settlement of transactions should be a long - term objective for countries in the menasa area, as this will improve speed, efficiency and will achieve transaction cost reduction, for the benefit of cross - border trade, investment flows and tourism business. achieving this would be a big challenge, because the good old routes, which we all are used to, will have to be abandoned. also, trust in each other ’ s national currency in addition to trust in the efficiency of national payment systems across regions is another challenge. however, these challenges can be overcome over a period of time, maybe depositing of the settlement amount with the counterpart payment system provider in the recipient country would create the required trust. to build trust in national payment systems, it will also be necessary for the national regulatory authority to take a leadership role. payment systems on the national level should be unified into one system, and operate with strict rules for action against mistakes or events of fraud through members. to achieve some form of common payment system among menasa area countries, it will be necessary to : 1. identify countries that are ready to be linked, through national payment systems that satisfy certain pre - set standards. 2. setting - up of a steering committee, consisting of technical staff representing the national payment systems, who would agree to work on a certain strategy aimed at achieving a common payment system, that would use local currencies for settlement, at a future stage. forth : investment in infrastructural projects encouraging regional capital flows aimed at investment in infrastructural projects in the menasa area countries should be encouraged through capital markets. this could be achieved through allowing corporations that are in marine transportation, air transportation, rail road companies

flows will be scrutinized by regulators for type of investment and whether direct or passive. also complexity of investment products will draw special attention. as for inward investment flows, regulators will put some type of filters to prevent hot money, or huge inflows followed by quick outflow of funds. banking regulations will probably be amended in the coming few months. i believe, the smaller economy countries will steer their banking system towards lowering the growth rate of loans and advances plus investments versus stable deposits. investment banking business, on the other hand will be subjected to a great deal of more regulations than in the past. in summary, i think that the present global financial crisis will impact globalization of financial services, as many restrictions will be put in place in many countries including the g7 countries, which might open a window of opportunity for countries in our region or the wider area. second : cross - border investment flows cross - border investment flows should be welcomed by recipient countries and encouraged by source countries, as many countries in our area need to set rules to enable the establishment of large projects for the purpose of creating jobs. that will also enhance peace and stability on the national level, which will certainly improve the prospects for the regions in this vast area. any help by the world bank in improving and unifying investment laws in addition to watching their implementation, will go a long way in achieving this important regional objective. sovereign wealth fund source countries should also be interested in investing in mega projects in the region for three reasons, as follows : 1. the global financial crisis proved that investments through industrialized advanced countries ’ investment banks are not totally risk free. 2. there is a need within swf source countries to safe guard flow of food imports at reasonable prices, and the possibility for incorporating companies as direct investment projects in countries in the region is a realistic possibility, when investment laws are enacted and maintained at international standards. 3. swf source countries should be interested in the maintenance of social order, peace and stability in the regions of this area. another reason that makes me think that swfs from our region might change the flow of their direct investments, is that once we see the proposed regulations re sovereign wealth funds in the industrialized advanced economies start being implemented, when economies in the west start doing well, more questions will be asked and more forms will become necessary to fill and more disclosure and transparency will be demanded. this behavior will signal that there is no strong need for foreign capital in the west, and that the