Qatar is a Role Model for New Arab World Transformation
The Union of Arab Banks and Associazione Bancaria Italian hosted the Annual International Arab Banking Summit (IABS) for 2011 on 23rd – 24th of June 2011 at Cavalieri Hotel, Rome –Italy. International and Arab Bankers, Governors of Central banks, economists, top business professionals and key industry players participated in this event. The theme of this summit was “The Future of MENA: Impact on Global Economy” and Mr. R. Seetharaman, Doha Bank Group CEO participated in the Panel discussion on “EU- MENA Economic and Investment relations development amidst the political instability” on 23rd June 2011 highlighting Qatar’s role model for new Arab world transformation.
Speaking on the Occasion Mr. Seetharaman gave his outlook on Global economy and GCC Economy. Mr.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 4.3% in 2011.The sovereign risks are mainly at Euro zone. The MENA region is expected to grow at 4.2% in 2011.In GCC, GDP at current prices in 2011 will rise to 1.4 trillion reflecting a growth of 29% over 2010.The current account balance of GCC will be 124% of GDP at current prices on account of high oil prices in 2011. The improved economic outlook in GCC, progress in UAE restructuring and recent UAE bond issue improves global investor’s confidence in the region”
Mr. Seetharaman gave his economic outlook on Qatar Economy. He stated that “The National development strategy 2011-16 will balance challenges of Qatar’s National vision 2030.Qatar economy is expected to grow have a robust growth in 2011 and broadly favourable in next 5 years. Beyond 2011 real GDP growth can drop as current investment in hydrocarbon decrease gets completed. Aggregate GDP growth in 2012-2016 is expected to average to 6.9%, out of which Hydrocarbon GDP growth is by 4.4% and Non- Hydrocarbon GDP by 9.1%. Overall fiscal position is expected to healthy with surplus of 5.7% of GDP by 2016 and current account balance will remain high at 15% of GDP by 2016.Even if oil average price is at $74 per barrel, average Nominal GDP level of Qatar would shrink to 2% by 2016 and with Govt planning to diversify its income over period, adverse fiscal impacts would be dampened.”
Mr. Seetharaman while highlighting the industrial trends in Qatar stated that “Services is going to be the major driver. By 2016 service sector could account for 40% of total output up from 36% in 2009.Transport and communications, financial services, could grow vigorously. Potential seen in construction and manufacturing. FIFA world cup 2022 may provide opportunities in tourism and other areas. World cup will create opportunities to form strategic alliances/ global value chains for Qatar with European players.”
Mr. Seetharaman provided his opinion on the investment and savings trends in Qatar and stated that “During 2011-2016, total gross domestic investment might be about QR820bn out of which Private non-hydrocarbon sector is expected to be QR 389bn. Investment of Q-based companies of next 5 years is QR 130bn. Non hydro- carbon investment also driven by Qatar government companies. After 2012 5% points of additional public sector investment spending would be needed to generate 0.5 % point temporary acceleration of growth in non-hydrocarbon output. Gross investment is expected to average 25% of GDP over 2011-16.Gross national savings are likely to remain above 40% of GDP through 2014, but might edge down in the later years. Population expected to be steady – grow at an average of about 2.1% in 2011-16.The rapid population growth of the recent past is not expected to continue. Qatar’s budget 2011-12 has a surplus of QR 22bn and focuses on education, health care and infrastructure projects. These trends provide significant opportunities for European Investors in Qatar.”
Mr. Seetharaman highlighted the bilateral investment deals between Europe and Qatar in recent times. He said that “Qatar to Invest 3 billion Euros in Spanish economy. In August 2009 Qatari government acquired 10 percent equity in Porsche.In Dec 2009 Qatar investment acquired 17 percent in Volks Wagen.In March 2011 Qatar Airways announces fourth route to Germany. In recent times Qatar is also evidencing interest in Hochtief – ACS deal. Centrica, British energy retailer, signed a deal in February with Qatargas, to buy 2.4mn tonnes of LNG a year. Qatar gas adds Greece to its customer portfolio, when LNG was sold to Vitol, the Netherlands-based energy firm. Qatar remains committed to the investment plan it announced last year for Greece. In Nov 2009 German rail operator Deutsche Bahn has signed a 17bn euro contract to build rail and underground lines in Qatar and Bahrain. The five stadium projects launched for FIFA 2022 have been designed by German architect Albert Speer & Partners. In June 2010 Siemens launched development centre at Qatar Science and Technology Park”
In his concluding remarks, Mr. Seetharaman said that “Qatar is a role model for new Arab world transformation”