Kudos to Mumtalakat for Choosing the Right Path

A recent article in the Financial Times discussed Mumtalakat's effort to open its books. The article praises the transparency, but also warns of the possible dangers Mumtalakat may face as a result of opening its books.

This article is directly related to my previous article on the Gulf sovereign wealth funds and their need for transparency. Despite the risks detailed by FT's article, the long-term effects of transparency can only be positive. The author of the article mentions the fact that Mumtalakat announced that it has incurred a loss last year as one of the risks that transparency brings. However, knowing the amount of loss and the decrease in the value of Mumtalakat's assets is highly preferable to the wild guesses about the performance of other swfs.

Furthermore, transparency bring accountability, which, in turn, guards against repeating mistakes. So kudos to Mumtalakat for its brave act. I expect that it will be the best performing Gulf-area swf in no time.