Just when you think things can’t get any worse! Hopes of a return to normalcy after the Federal Reserve–underwritten sale of Bear Stearns Cos. have soured quicker than a subprime loan. Banks continue to raise capital — at ever lower prices — against a further deterioration in their loans. And the financial crisis is increasingly taking its toll on the real economy. U.S. unemployment is rising sharply, and consumer confidence is at its lowest level in a generation. The situation isn’t much better in Europe, where rising inflation has prompted the European Central Bank to raise rates. It’s little surprise that many major stock markets are now officially in bear market territory.

Fortunately for investors, there are still some areas of strength in the global economy. Oil at $140 a barrel is doing wonders for countries in the Gulf. And few people are taking advantage of that economic dynamism as well as Arif Naqvi, the founder and CEO of Abraaj Capital. As Staff Writer David Lanchner re-lates in “The Gulf’s Buyout King,” beginning on page 52, Naqvi has built Abraaj from scratch into the leading player in the region’s fast-growing private equity industry over the past decade.

The Pakistan-born, U.K.-educated accountant is one of a new generation of entrepreneurs who learned their skills in the West and are now employing them to great effect in emerging markets. Naqvi worked as an accountant at Arthur Andersen Co. in London, then learned the art of deal making at Saudi Arabia’s Olayan Group before setting up shop on his own. Over the past two years, Abraaj has made staggering gains with well-timed investments in EFG-Hermes, the Cairo-based securities house, and Egyptian Fertilizer. Such success attracts competitors. The U.S. buyout giant Carlyle Group and Bahrain’s Investcorp are raising billion-dollar funds to deploy in the region. But with an experienced team of professionals and backing from some of the Gulf’s biggest investors, Naqvi is in an enviable position.

In Asia everyone is looking to take advantage of China’s economic juggernaut. Consider Taiwan. The island has been waging a sort of cold war with the mainland ever since Chiang Kai-shek’s Nationalists fled there to escape the Communist revolution in 1949. During the past eight years, tensions between the two sides threatened to heat up because of the independence ambitions of Taiwan’s former president, Chen Shui-bian, and its economy lagged.

But as Senior Editor Allen T. Cheng describes in “Taiwan’s China Card,” beginning on page 58, the government of newly elected President Ma Ying-jeou is moving swiftly to thaw relations with Beijing. Ma won an overwhelming victory in March by promising a new era of détente, and since taking office in May he has signed an agreement allowing direct flights between the two territories and begun talks aimed at boosting two-way investment across the Taiwan Strait. With commerce serving as the new ideology on both sides, the prospects for investors in Taiwan and China are bright.