Sustainability and diversification are the key lessons from Qatar’s approach to energy development and the investment of proceeds earned from energy resources, Doha Bank group CEO R Seetharaman has said.
Qatar - which holds more than 13% of world’s natural gas reserves with a moratorium in place on further development of its vast North Field gas reservoir until a study on sustainability has been completed - utilises the proceeds from energy resources for investing across the globe through its sovereign wealth fund, he said at a panel discussion at the Bloomberg conference in Doha.
The major investments of Qatar include Agricultural bank of China, Chelsea Barracks, Sainsbury, the London Stock Exchange, Park Lane Hotel, Shard skyscraper, Harrods department store and the athlete’s village in the Olympic Park.
Seetharaman also highlighted the impact of high oil prices on GCC (Gulf Co-operation Council) and Africa.
“Higher oil prices have benefited the GCC economies in recent years,” he said, adding Qatar had reported a robust $15bn surplus in the 2011/12 despite a surge in spending on public sector wages. The country also had a budget surplus of $21bn during the period April- September 2012, he said.
In 2011, Saudi Arabia‘s revenues reached $296bn against the budget of $144bn. In 2012, the country’s revenues reached $330.4bn compared to budget of $187.2bn. Angola’s more than half of its GDP comes from oil contribution. Although the current account surplus of Angola is narrowing on account of huge imports it is huge on account of rising export volumes and high oil prices.
Seetharaman also found immense potential for sustainable energy efficiency in the Middle East, where robust growth is expected for photovoltaic power solutions.
“The fastest photovoltaic capacity growth is expected in China and India, followed by the Southeast Asia, Latin America, the Middle East and North Africa in the next five years,” he said, quoting the European Photovoltaic Industry Association projections. China plans to increase its goal for solar power installations in 2015 by 67% and to reduce reliance on fossil fuels, which are responsible fro greenhouse gases, he said.
Giving insights on the impact of high oil prices on the Asian region, Seetharaman said “India, China and Japan were the major consumers of oil in the last decade.”
Asia has a heavy dependence on imported oil. Persistent high oil prices has been a burden on public finances because some countries subsidies the cost of oil, he said. Inflation has moderated since 2011 but still remains high in countries such as India.
“The impact of high oil prices manifests itself in the form of inflationary pressure, budget deficits and slower economic growth,” he added.
