Managing oil price crisis is critical issue, says al-Attiyah
January 26 2016 11:07 PM
HE Abdullah bin Hamad al-Attiyah
HE Abdullah bin Hamad al-Attiyah

Doha

The dramatic fall in oil prices recently is not the first in history and would not be the last. For GCC countries high oil prices or low prices should not be a problem but how to deal with it, pointed out HE Abdullah bin Hamad al-Attiyah, chairman of Abdullah bin Hamad al-Attiyah Foundation for Energy & Sustainable Development.

In an interview, HE al-Attiyah told the editor in chief of local Arabic daily Arrayah Saleh bin Afsan al-Kuwari that the slide in oil prices is often accompanied by various negative psychological impacts. Accordingly, rumours spread fast among people and a gloomy and negative image of the economic situation is drawn.

"However, the situation in reality would not be so bad. Yes, there is a real crisis with the rapid fall in oil prices, and we cannot escape from such a crisis. The most important thing is how we manage this crisis and apply adequate solutions. For Qatar, thank God, our situation is better and non-petroleum activities represent half of our GDP. Further, we have clear strategies and plans in place until 2030 and these are being implemented with success and determination. Also, the government continues to implement its development projects, in particular regarding education and health and infrastructure. We are also keeping pace with the projects for World FIFA Cup 2022.

"Accordingly, I call upon all not to exaggerate the actual situation or draw a gloomy image of the economy. Qatar is still achieving economic development and such development will go on for the upcoming years," he said.

Regarding the government budget for 2016, he said that it was normal to see some cuts due to the falling revenues of oil, but the cuts are comparatively simple, when compared with previous years. "Also the recently effected hike in gasoline prices is a normal procedure to reduce budget deficit. Still the new prices are relatively lower than those in some neighbouring countries." He also considered the recent downsizing at Qatar petroleum a normal procedure. HE al-Attiyah is also a former energy and industry minister.

"It is normal that the budget falls when the revenues fall by 70%. In addition, the government should reconsider its priorities... and prepare for solutions to deal with the crisis of falling oil prices," he pointed out, stressing that such issues should be dealt with calm and without overreaction.

Regarding the high and ever-increasing real estate prices, he was of the view that these are not based on ground realities. "I am shocked when I hear that the price of a square foot of land in Doha sells in the range of QR5,000- 7,000." He said land prices and renal rates normally reflect on the local economy.

He expected that the high prices would fall , hoping that the rates would reach the pre-2006 levels, "as reasonable prices of real estate and rental rates are good for investors, real estate owners, consumers, and the economic stability of the country".

He said that it was not reasonable for companies to pay their expatriate employees higher housing allowances than their basic salaries.

"We hear that the rent of some shops is in the range of QR50,000-80,000. Such rates are not logical. Such high costs will be transferred by the trader to the consumer ," he pointed out.

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