In response to a question that Qatar’s Net International Reserves dropped 30% in June and foreign currency deposits in Banks fell the most in almost 2 years and how this embargo is hitting the bottom line Dr. R Seetharaman stated “Well, these are changing times and challenging times. Qatar has proved to be resilient. You did mention about 30% reserves. The total reserves is $340 billion including assets of its Sovereign Wealth Fund, QCB reserves cash and Gold. Essentially the 30% reserves in June was only QCB reserves to improve local market liquidity. Qatar’s reserves are more than twice of its GDP. In terms of financial stability Qatar is strong, stable and functional. The challenges remains in terms of alternate supplies, airport or seaport. Qatar has made alternate arrangements for supplies and hence sorted out. Essentially the plan A to plan B is a conversion which is what Qatar is engaged in. The operational reserves have proved to be a right model and is working well. There is food price inflation otherwise rest are under control. Qatar’s recurring revenues in terms of oil, gas and petrochemicals is in the making. That is long term supply chain and essentially the road block is not there in real order and that is what is everyone has to understand. The international community is recognizing in terms of political progression, social progression and economic progression that Qatar is a resilient and model economy.”
Supply chain disruption in terms of land transport has caused some disturbance in Qatar. But there is always plan B. The imports from has been redefined from turkey, Malaysia, India and UK. So essentially reordering the levels is one thing they have to consider and also realign the overall policy framework which is in consensus with rest of the world. Essentially in terms of economic stability, social progression and political progression Qatar convergence is visible and rest of the world is trying to understand in total terms.
The crisis is lingering, America is playing its part. Kuwait is doing a substantive role in bringing the mediation. GCC is known for its co-operation and co-ordination in the last 40 years and UN has to step in to see how best they can resolve in a peaceful manner. It is required and it is time. It is a defining time to make sure that Qatar’s role is being recognized. It has to be resolved by international mediations which is underway and stepping in by UN will have long term positive consequences.
I hope the GCC does not end The GCC customs union have worked well and currency union has been set as a good convergence criteria though it is not implemented. The macroeconomic similarity within GCC has been well established producing 45% of oil and 25% of gas comes in. The Geopolitical framework is re-defined time and again. The overall picture is GCC stands united everyone stand to gain if they stand divided everyone stands to lose and that is what the policy makers have to recognize and come to terms with universal benchmarks.
Qatar SWF is redefining and the internal integration is very much visible now. There is a new rejuvenation in terms of patriotism and investments in the local market. Sovereign fund is a diversification, is a structured solution and to have long term diversification is a prophecy. They have to necessarily modernize the internal infrastructure which they are going to do and more inward investments will take place to lift infrastructure, healthcare, education and FIFA 2022 is shaping up.
Any country can’t avoid its neighbor’s right, since the geography is fixed in global order. Essentially the transactions which are prejudicial to Universal framework Patriot Act or Iran Sanctions have not been violated by Qatar. I can tell you as a Banker there are established framework well defined and whether it is OPEC or UN Security Council resolutions have been respected. And now neighbor is a neighbor and you have to respect the sentiments and that is what is Qatar was trying to be in consonance and in terms of substantive compliance, Qatar has always fulfilled its obligations as a Statesman. In terms of financial services there are no breach of regulations what so ever over the years.
The political re-alignment is policy maker’s discretion as such, from economic point of view Iran has a sharing in the gas field with Qatar and that is known. There is no breach of regulation in terms of Iranian Sanctions when Americans had set-in from 2011. Whether there is supply chain support comes in whether disruption from Saudi Arabia there were emergency medical and food supplies were triggered. Those were humanitarian values. Essentially the rest of the reorder the realignment the time will prove.
Qatar’s brand equity in terms of World Cup is evolving to be a fine combination. They have invested in Barcelona. Essentially the contractual obligations I am not sure how it is resolved. They will be fair and just in terms of long term objectives putting Qatar has a brand equity for Sport ‘s Tourism Country and essentially Qatar is ready to host FIFA 2022, so everything will be aligning to those principle centered values.