Qatar: A Beacon of Stability in Troubled Times: The Gulf Emirate of Qatar Managed to Sail through the Global Financial Storm of 2009 with Comparative Ease, Writes International Economic Analyst Moin Siddiqi

By Siddiqi, Moin | The Middle East, June 2010 | Go to article overview

Qatar: A Beacon of Stability in Troubled Times: The Gulf Emirate of Qatar Managed to Sail through the Global Financial Storm of 2009 with Comparative Ease, Writes International Economic Analyst Moin Siddiqi


Siddiqi, Moin, The Middle East


MORE THAN A DECADE of macro-prudential policies, shrewd investment planning and market-oriented reforms helped to fuel double-digit growth both in both the hydrocarbon and non-hydrocarbon sectors and saw a swelling of the 'twin surpluses' (the government budget and balance of payments), leaving Doha strongly placed to withstand exogenous shocks and continue its robust performance, despite the regional slowdown.

The International Monetary Fund (IMF) praised the Qatari authorities for competent economic governance during challenging times and preserving the growth momentum and financial stability. It noted that sound macroeconomic policies have underpinned investments, which contributed to stellar growth and growing fiscal and external surpluses. Unsurprisingly, major ratings agencies acknowledge Qatar's excellent risk profile with a higher investment grade rating (Moody's Investor Services Aa3 and Standard & Poor's AA-), on a level with several industrialised economies and the highest in the Middle East. "Qatar's issuer rating indicates a high level of prosperity, wide external current account surplus, a strong balance sheet and the rapid expansion of gas exports that will significantly boost government revenues over the coming years," Moody's said.

The overall pace of development is exceptional by any yardstick; the nominal Gross Domestic Product (GDP)--output of goods/ services--in US dollar terms rose fivefold to $82.86 billion during 2000-09, with real GDP growth averaging 11.2% per annum.

In contrast, the Gulf Cooperation Council (GCC) bloc recorded 5-3% growth over the same period, based on IMF figures. The exploration of hydrocarbons resources, the expansion of related industries and mega capital projects largely drove this breathtaking economic boom.

In 2009, Qatar still managed to achieve 11% economic growth in the midst of severe global credit crunches, whereas real GDP in Kuwait, Saudi Arabia and the United Arab Emirates contracted by 1.6%, 0.9% and 0.2%, respectively.

As elsewhere, fiscal policy was expansionary, as development spending rose by 15% in the financial year 2009/10. In some cases, the authorities injected cash into public projects (especially housing) to stimulate the economy. Meanwhile, inflationary pressures abated sharply due to an increase in housing supply--precipitating large falls in domestic rents--and a reduction in import prices.

Last year's official intervention in the banking system (costing about 6.5% of GDP)--mainly in the form of capital injections by the Qatar Investment Authority and purchases of the equity investment and real estate portfolios of commercial banks--has improved liquidity, maintained credit to private businesses and enhanced the system's resilience. Moreover, the impact of Dubai's debt crisis on the local banking sector was minimal. Like its regional peers, Qatari banks are well capitalised, profitable and strongly regulated. Non-performing loans (i.e. bad debts) are reportedly the lowest in GCC states.

Record growth

This year, Qatar could record the world's highest GDP growth at 18.5%, thanks to soaring LNG output (and associated industries) and continuous expansion in manufacturing and construction. Hydrocarbon output is forecast to leap by 25%, before slowing to a still robust 17.2% in 2011 as LNG production finally peaks at 77m tonnes (see Table). The fiscal and external current accounts should again show hefty surpluses, reflecting strong energy prices.

[ILLUSTRATION OMITTED]

Qatar owns the single largest non-associated gas reservoir in the world. The 'ultra-giant' North Field (covering 6,000 sq km) was discovered in 1971 by Royal Dutch Shell and contains more natural gas than the combined recoverable reserves of the Americas and Western Europe (totalling 830 trillion cubic feet). By contrast, Qatar's proven reserves of sweet gas are 910.5 trillion cubic feet, cementing its strategic role in energy markets well into the next century. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • A full archive of books and articles related to this one
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Qatar: A Beacon of Stability in Troubled Times: The Gulf Emirate of Qatar Managed to Sail through the Global Financial Storm of 2009 with Comparative Ease, Writes International Economic Analyst Moin Siddiqi
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

    Already a member? Log in now.