e-goverment

Qatar projects valued at $142bn

Published: Tuesday, 22 January, 2008, 02:08 AM Doha Time

Business Reporter

Kamal ... economic diversity

DOHA: Qatar, whose economy is set to double in size in five years, will develop the “economic diversity” necessary to move away from any future downturn in oil and gas prices, HE the Minister of Finance Yousef Hussein Kamal has said.
“For Qatar, the outlook is particularly bright. With the energy sector still accounting for some 60% of our GDP, the continued growth in oil prices will continue to fuel our economy. At the same time it will allow us to develop the economic diversity necessary to move away from any future downturn in oil and gas prices in the medium to long term,” Kamal said in his keynote address at the Meed Qatar Conference here yesterday.
The minister said as of the fourth quarter of 2007, the Middle East Economic Digest figures put the value of projects planned or underway in Qatar at over $142bn – more than 20% per cent up on the same period in 2006.
With around 50% of these schemes being project financed (and around a further $55bn coming through syndications and $15bn in bonds) Qatar has a strong incentive to build the infrastructure necessary to attract and retain world class financial institutions.
“This we have done at the Qatar Financial Centre, which has, since inception in 2005, attracted and is now regulating some 70 of the world’s leading banks, insurers, investment houses, and asset managers,” the minister said.
Qatar will further improve its regulatory environment with the integration of the QFC Regulatory Authority, the Qatar Financial Markets Authority, and the regulatory functions of the Qatar Central Bank into a new single regulatory authority.
“With one authority we believe we will be able to achieve greater efficiency and higher standards of regulation. We are calling it the Qatar Financial Regulatory Authority (QFRA),” Kamal said.
“While we have created for these institutions one of the most favourable environments in the world, the influx of thousands of new professionals coming to Qatar has significantly enriched our country beyond the simple economic impact of their presence.
“While this economic impact has been great, the real benefit to Qatar has been in terms of their contribution to the development of our knowledge economy. Our energy reserves are finite albeit we have proven reserves that will last another 200 years at current rates of extraction.
It is this realisation that underpins both our drive for economic diversification and our drive to build an ambitious model of a modern knowledge economy.
Rather than simply buying the skills necessary to keep pace with our economic growth, we are seeking to transfer this understanding and foster our own expertise in science and technology, research and development, entrepreneurship and creative management,” he said.
He also said between 2002 and 2006, the six member states of the GCC have earned between $1.2trn and $1.5trn in revenues that have been invested both at home and overseas.
“Our combined overseas assets grew during this period to over $1trn, a sum that rivals the investment we are making regionally and domestically in projects that will further diversify our economies. And diversification is already paying handsome dividends- returns on Gulf owned foreign investments now outstrip the revenues we once received from our oil and gas exports before prices began to rise in 2002,” he said.
This year, the global economy has been characterised by the fall-out of the ‘credit crunch’ that has sent shockwaves through the world’s debt markets; derailed some high profile projects; besides pushing up the cost of borrowing.
As a result, institutions such as the International Monetary Fund have cut their global growth forecasts for next year – suggesting world GDP will grow at 4.8% rather than the 5.2% it predicted earlier in the summer.
“It is the developed economies of the US and Europe that are bearing the brunt of this change in sentiment while emerging market economies, led by China, India and Russia, will continue to drive the global economy – though growth rates have been trimmed even there,” Kamal added.