Doha Bank conducted a knowledge sharing on “Changing Global Dynamics and Opportunities for Japan in GCC Countries “on 15th October 2012 at Mandarin Oriental, Tokyo. Top Japanese and Arab Bankers, economists and business professionals participated in this event. Dr. R. Seetharaman, CEO of Doha Bank spoke on “ Changing Global Dynamics and Opportunities for Japan in GCC Countries”
Speaking on the occasion Dr. R.Seetharaman explained the current scenario prevailing in the global economy and the basic challenges economies face in moving from crisis to stability. He stated that “Global economy is expected to grow at 3.3 percent in 2012. Advanced economies are expected to grow at 1.3 percent for 2012. US economy growth is expected grow at 2.2 percent for 2012. Euro Zone is expected to contract by 0.4 percent for 2012.Emerging economies are expected to expand by 5.3 percent in 2012.Growth will slow in several large developing countries, mostly because they will export less to Europe and the United States. China’s economy will likely expand by 7.8 percent this year. India’s economy will grow by 4.9 percent in 2012.Spillovers from advanced economies and domestic issues prevailing in emerging and developing economies have held-back activity in emerging market and developing economies. The revival of growth in Global economy is required. Delayed or insufficient policy action may further escalate the euro area crisis. Delays in raising the federal debt ceiling in U.S could increase risks of financial market disruptions and a loss in consumer and business confidence.”
Dr. R. Seetharaman explained current trends in GCC economies. He said “The GCC GDP at current prices are expected to grow to $1.48 trillion in 2012 and the current account balance will improve on account of high oil prices. The increasing energy demand in last of couple of year’s world over had enabled GCC to generate considerable fiscal surplus thereby substantially improving its balance of payments position which has further enabled this visionary state to invest wisely on various industrial, infrastructural projects and overseas investments”
Dr. R. Seetharaman while explaining on State of Qatar’s emergence as a role model for transformation on economic and social fronts said “State of Qatar has effectively followed the true principles of globalization that is driving the world economies through progressive liberalization and modernization under the astute leadership of His Highness Sheikh Hamad Bin Khalifa Al-Thani, the Emir of the State of Qatar and His Highness Sheikh Tamim Bin Hamad Al-Thani, Heir Apparent of the State of Qatar. Qatar’s National Vision 2030 builds on a society that promotes justice, benevolence and equality. Qatar is expected to grow by more than 6% in 2012. In 2012 and beyond growth will depend on non- hydrocarbon economy. The recent Qatar budget gives importance to major infrastructure projects”
Dr. R. Seetharaman also highlighted the bilateral trends between GCC and Japan. He said “Bilateral trade between Japan and Saudi Arabia has increased from close to $35B in 2009 to $57B in 2011 on account of increase in exports from Saudi Arabia. Saudi Arabia and the UAE supply Japan with more than two million bpd, nearly half its total oil imports. In Sept 2011 Japan concluded a memorandum with the Kingdom of Saudi Arabia in the water sector to deepen bilateral cooperation in the water sector and develop both economies. Bilateral trade between Japan and Kuwait has increased from $10B in 2009 to $14.4B in 2011 on account of increase in exports from Kuwait. Bilateral trade between Japan and UAE has increased from close to $30B in 2009 to $50B in 2011 mainly on account of increase in exports from UAE. UAE maintained its position as the largest Gulf market for Japanese products in the first seven months of 2012 while it was the second GCC exporter to Japan. Bilateral trade between Japan and Oman has increased from close to $6B in 2009 to $8B in 2011 mainly on account of increase in exports. Bulk of Aluminum exports from GCC to Japan come from Bahrain and UAE.”
Dr. R. Seetharaman also highlighted the bilateral trends between Qatar and Japan. He said “Bilateral trade between Japan and Qatar has increased from close to $18B in 2009 to $31B in 2011 mainly on account of increase in exports from Qatar. Qatar gifted US$100 million to Japan as contribution to relief efforts for the victims of the devastating earthquake that hit Japan in 2011. Japanese utility Kansai Electric Power Co (KEPCO) had signed a contract with the world’s top LNG producer Qatar gas to buy 500,000 tonnes per year (tpa) of liquefied natural gas (LNG) for 15 years from January 2013. Tokyo Electric Power has signed a new contract with Qatargas to purchase 1 million tonnes per year of LNG from August 2012. There are more than 30 Japanese companies in Qatar such as Itochu Corp and Nissho Iwai. Qatar gas announced in Sept 2012. that it would supply Japan with 11 million tonnes more of LNG in the short term, in addition to 9 million tonnes announced last autumn.”
Dr.R.Seetharaman highlighted the project finance details in GCC He said “Japanese companies participate in project finance through Export credit agencies such as JBIC (Japan Bank for international co-operation). In the 2012 fiscal year JBIC is expected to provide more than double the amount of financing they did in 2011 because there are a lot of projects that need to be financed and there is a lot of demand for independent power projects and integrated independent water and power projects in this region where Japanese companies can play a big role. Out of the $7.2bn debt raised for Qatar’s Barzan natural-gas project in December 2011 Japan gave $1.2bn. Qatar Capital spending is expected to increase by 48% between 2011 and 2015.”
In his closing remarks Dr.R.Seetharaman stated that Japan can actively participate in Qatar’s infrastructure development.