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The Qatari Economic Forum held at Doha Sheraton Hotel and Resort on 1st June 2009 under the patronage of HH Heir Apparent Sheikh Tamim bin Hamad Al-Thani had wide ringing participation from ministries and government financial institutions from both Qatar and the entire Gulf.
In his speech on the Trends in the Banking Industry in Qatar and the Gulf, Mr. R. Seetharaman, CEO of Doha Bank said: “At the macro level, the economy has achieved a real growth estimated at 16% in 2008, and growth is projected to continue in 2009 at a rate of 7% at a time when the developed economies are expected to slowdown their growth to a rate not exceeding 2% in the year 2009. The real growth rates in the GCC are also not expected to exceed 2% in 2009 according to the outlooks of the IMF. The optimistic outlook related to the Qatari economy is based on the mega projects to be achieved during the next three years in the gas, petrochemical and other sectors”.
Mr. Seetharaman also said that “Globally, the banking sector has witnessed the bankruptcy of a number of banks and financial institutions in the US and Europe. The U.S has recently performed a stress test to assess the position of major banks in the U.S. Financial institutions in the developed countries are now unable to play their role as creditors, but the Qatari banks and financial institutions, on the other hand, are enjoying good solvency and financial stability. They registered increases in their net profits of more than 29%, and growths in their total assets of 34%. The overall capital adequacy ratio for Qatari banks, in accordance with Basel standards, is 15%, which is one of the highest. Further, different government authorities in Qatar have proactively worked on protecting our economy and financial institutions from the consequences of the current financial crisis. Qatar Investment Authority had earlier decided to buy 10% - 20% of the capital of some Qatari banks. This was followed by an equally important decision by the Government to buy the Qatari banks’ portfolios of local shares listed on Doha Securities Market as registered in the banks’ books at the closing of the 28th of February at the purchase value for each bank after deducting the provisions as at 31st December 2008. Subsequent to this Qatar stated it would offer to buy up to QR15bn ($4.12bn) of banks’ real estate investments at a sale price equivalent to the net value of property loans and investments. Qatar Central Bank (QCB) has also taken several measures to face the financial crisis. It is worthwhile to note here the significance and importance of the precautionary measures and instructions issued by QCB over the last few years to mitigate credit risks, with particular emphasis on the risks of financing the real estate sector and the purchase of shares.
Mr. Seetharaman also explained in detail the scheme of events leading to the ongoing global financial crisis, the impact of the ongoing crisis in the functioning of the global economy, the impacts on the currency, commodity, bond, stock and property markets, the impact on the financial stability of the world economies, the economic outlook of the world economies in consideration of the ongoing crisis, the policy changes that are required at a macro-economic level and financial/monetary level to come out of the current financial crisis. Mr. Seetharaman further elaborated what this crisis meant for commodity-driven real economies, one like State of Qatar and also explained the measures needed to be implemented in the current context of things.
Mr. Seetharaman continued highlighting the proactive measures taken by the GCC governments to monitor and manage the current situation. Mr. Seetharaman while explaining on State of Qatar’s emergence as a role model for transformation on economic and social fronts said “The increasing energy demand in last of couple of year world over had enabled the Qatar 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 and infrastructural projects. This has enabled State of Qatar to gain expertise on diversification and grow on multi-dimensional front with renewed thrust on hydro-carbon sector especially creating additional facilities towards environmental friendly fossil-fuel LNG. On the social front all the important indicators such as healthcare system, literacy rate and women participation in governance indicate steady improvement resulting in significant transformation. Further, unified stance on most of the key issues be it currency union, controlling of inflation, management of its liquidity etc., are been continually addressed through regular coordination through multiple forums with other GCC states are making us stronger day by day”.
“State of Qatar has also effectively followed the true principles of globalization that is driving the world economies by liberalization and modernization under the astute leadership of His Highness Sheikh Hamad Bin Khalifa Al-Thani, the Amir of the State of Qatar and His Highness Sheikh Tamim Bin Hamad Al-Thani, Heir Apparent of the State of Qatar” he said. Mr. Seetharaman further highlighted the development projects that are been currently undergoing, establishment of Qatar Financial Center, educational & research institutions being set-up and operational in the State of Qatar. Mr. Seetharaman, further elaborated State of Qatar’s strategic relationships with USA, Singapore, South Korea, Japan, China, Euro Countries and Asian Countries.
Mr. Seetharaman explained various developments in the field of energy sector, tourism, infrastructure, education, health, sports that are taking place in State of Qatar currently. He also explained how State of Qatar is developing itself in each stages of energy cycle right from production, refinery, transportation, storage and distribution through collaboration with leading international organizations. Mr. Seetharaman also highlighted various policy initiatives taken by the State of Qatar and various incentives available to boost the investment climate; he said “Today, State of Qatar is one of the best investment destinations in the region in terms of state incentives. e.g. Industrial land being provided at a very nominal price, electricity and natural gas are extremely cheap, there are no duties or taxes for 10 years with stable exchange rates, foreign ownership are permissible between 49% and 100% depending on respective sector. There is absolute freedom to repatriate the capital or profit. The rules and framework is very investor friendly. Government is regularly upgrading the incentives to sustain the attractiveness of State of Qatar, such as setting up of free zone etc. State of Qatar continues to look optimistic due to its proactive policy, friendly investment climate and professional environment.”
Mr. Seetharaman also highlighted the developments in banking and financial sector, “State of Qatar banking and financial sector has matured to be second to none in terms of governance, products, service quality, technology and regulatory framework. Further, establishment of Qatar Financial Center brings Qatar prominently into global financial map”.
In his concluding remarks, Mr. Seetharaman said “The ongoing global financial crisis is indeed an opportunity for real commodity driven economies like State of Qatar to showcase their fundamental strengths and come out of the crisis stronger. Further, State of Qatar’s strong march towards various socio-economic-environmental efforts enables us to converge ourselves with the Qatar National Vision 2030”.
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