Behind this growth and the confidence about future predictions is a reliance on developing oil and gas revenues, particularly LNG which is the fastest growing energy source in the world today.
Qatar is one of a select group of Gulf States that have opened their doors to foreign investment and are now reaping the rewards for that foresight. Those countries like Iran that have proven difficult partners for foreign energy companies now find themselves with ageing infrastructure and low levels of output in relation to proven reserves.
And despite its small size Qatar remains a big player in the energy investment outlook for the region. Around $100 billion worth of oil and gas projects are literally in the pipeline with some $70 billion of that sum likely to be raised by project finance from foreign and regional financial institutions.
This $100 billion breaks down into three main areas: $60 billion for the North Field Development project; $15 billion for LNG expansion schemes and a further $15 billion for LNG tankers.
However, this project finance business will now be increasingly channeled through the one-year old Qatar Financial Centre and watched by its independent regulatory authority with former UK Chief Justice Lord Woolf as President of the QFC Tribunal.
By the end of the year the QFC expects to be regulating 60 international firms and is positioning itself as a major facilitator in the next stage of the expansion of the Qatari economy. At the same time the QFC will also ensure the proper regulation of firms investing Qatar’s energy revenues overseas.
Indeed as QFC chairman Yousef Hussain Kamal told Qatar Today in an interview this month: ‘If you have a huge amount of money that you want invested outside the country then you need to have someone located close to you who is equipped to do this.’
At the same time, Qatar is using its energy revenues to diversify its domestic economy. The QFC is one example, so too is the massive expansion of Qatar Airways and the staging of events like the Asian Games this December. A total of $30 billion has been earmarked for a new airport, the Bahrain-Qatar causeway and general infrastructure projects as well as public tourism and cultural projects.
This approach creates a virtuous circle of investment and higher and higher energy revenues which is the real reason for Qatar’s outstanding success in raising its GDP.
Monday, July 17- 2006 @ 13:26 UAE local time (GMT+4) Replication or redistribution in whole or in part is expressly prohibited without the prior written consent of Mediaquest FZ LLC.