By Andrew Marshall
DUBAI (Reuters) - Fears that the standoff between the West and Iran may spark a regional conflict have not yet dented an investment boom in the Gulf, but a major escalation could be a serious economic blow, regional business leaders say.
"So far it is not affecting business. Investment and construction are going on," George Nasra, chief executive of NBK Capital, National Bank of Kuwait's (NBKK.KW: Quote, Profile, Research, Stock Buzz) investment banking arm, told the Reuters Middle East Investment Summit this week.
"But if there is a serious escalation, all bets are off."
Regional tensions have been further stoked by Iran's seizure of 15 British sailors in Gulf waters last week.
"The market should be prepared for risk of conflict," ING said in a daily research note.
The proximity of Gulf Arab countries to Iran, and fears that Iran could retaliate to any U.S. or Israeli military strike by attacking targets in U.S.-allied Gulf states, mean that conflict over Iran could destabilize the whole region. Iran is building a nuclear power station in Bushehr, not far from Gulf neighbors.
"What worries us is that the Bushehr nuclear reactor is 115 km from Kuwait," Nasra said. "So it's serious."
The six Gulf Arab states have seen a spectacular economic boom over the past five years on the back of surging oil prices. One reason for their success has been the perception that they are havens of calm in a turbulent region. Continued...
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