*Qatar 'used embargo to reshape its economy'
*Reforms to make Qatar an open hub for the region
*Qatar's growth rates continue to outstrip neighbours
Qatar has weathered the trade and travel embargo launched by four neighbours almost a year ago, and is accelerating economic reforms to boost investment, HE the Finance Minister Ali Sherif al-Emadi has said.
The region was thrown into turmoil in June when a group of countries led by Saudi Arabia closed off Qatar’s access to their ports and airspace, claiming Doha supported terrorism. International and regional attempts to solve the dispute between US allies have been unsuccessful. Qatar has strongly denied the allegations.
“The first few weeks of the blockade were most difficult, but today the economy has stabilised. Our growth rates are good,” the minister told the London-based Financial Times in an interview.
Qatar, he said, had used the embargo imposed by Saudi Arabia, the United Arab Emirates, Bahrain and Egypt as an opportunity to reshape its economy.
International investors into most of the Gulf countries have traditionally been allowed to operate only within special zones, the Financial Times said, adding this is aimed at protecting domestic investors, many of whom have resisted efforts to boost foreign investment by opening up their economies to competition.
Following the blockade, Qatar decided to open up its real-estate sector to foreigner investors. Another change is expected that would allow overseas investors to take full ownership of companies without the need to work with a local partner.
“The blockade made us look into ease-of-doing-business regulations, so we accelerated those reforms. Now we look at Qatar as an open hub for the region,” HE al-Emadi said.
Qatar has fostered domestic dairy and meat production as well as relying on Turkey, Iran and Oman to open new supply routes for food and construction supplies, most of which used to come overland from Saudi Arabia and via ports in Dubai.
It has also opened its borders by offering visa waiver to nationals of 80 countries, boosting tourism and widening the pool of expatriate labour. It launched its first bond since the embargo, raising $12bn from an order book of $53bn.
The quartet launched their embargo just as Qatar was gearing up a massive $200bn infrastructure transformation plan to ready itself for hosting the 2022 FIFA World Cup.
As the oil price slump hampered business confidence in oil producing countries, Qatar’s non-oil GDP growth softened to 4% from 5.6% in the previous year, according to the International Monetary Fund, well below the previous historical average of 12.6%.
But Qatar’s growth rates have continued to outstrip its neighbours, said HE al- Emadi, who is targeting GDP growth of close to 3% this year. “Lots of work has been done behind this and the economy is in a healthy condition,” he said.
As fiscal pressures ease with rising crude markets, the Qatar Investment Authority — which invests hydrocarbon surpluses — will pick up the pace of its global investments, he added. Qatar sets its budget based on an oil price of about $45 a barrel, the lowest in the region.
“It is very simple maths,” he said, referring to the excess revenues expected this year as oil rises above $70 a barrel.
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