These agreements provide numerous advantages for GCC economies and the Qatari economy including the raising of the volume of GCC exports to external markets such as those in Europe and Asia, he said in an interview with Oxford Business Group.
“These markets are huge and have high purchasing power through abolition of customs duties and all quantitative restrictions, especially for oil products, petrochemicals and aluminium, Sheikh Hamad bin Jassim said in Oxford Business Group’s ‘The Report Qatar 2009’ .
This, he said, enables Qatari exports to enter external markets, attract more foreign direct investment to GCC countries and raises Qatari investments abroad.
“For instance, the EU is the third largest investor, after the US and Japan, in the GCC region and the second largest investment market for GCC countries. Such agreements also contribute to the transfer of advanced production techniques to Qatar and the utilisation of highly developed technology.
“Qatar can benefit from the gradual liberalisation of some of its service sectors to raise the efficiency of the service industry and modernise productivity. Regional integration, trade liberalisation and expansion of market volume make setting up large industries possible, bringing the benefits of mass production and economies of scale.
“Co-operation between Qatar and its trading partners, Europe and Asia in particular, enhances the effort to diversify the economy, open new markets and improve competitiveness in world markets. This facilitates Qatar’s integration into the global system and promotes its role within the GCC system and the world economy,” Sheikh Hamad bin Jassim said.
On the impact of the global economic crisis the Prime Minister said,“Realising the dimensions of the crisis and its repercussions for economic development in all countries, the government has adopted a set of measures and precautionary procedures to avoid a setback to the country’s economic growth. The Qatar Central Bank has amended its monetary policy, lowered interest rates on the Qatari riyal and introduced new monetary instruments, such as opening direct facilities for Qatar banks’ at a 3% interest rate in addition the usual credit facilities with specific ceilings.
“In 2009 the Qatar Investment Authority bought shares worth up to 10% of Qatari banks capital and support the liquidity available to the banks. The Ministry of Economy and Finance continues to spend heavily on infrastructure projects without stoppage or slowdown and according to the already approved programmes.
“The ministry is maintaining a high spending level despite falling oil prices by using the financial surplus accumulated during the past few years. Because the programmes to expand gas production are being continued, the rising production from such projects in 2009 will lead to a genuine increase in national GDP, which will partially make up for falling prices.”
The Prime Minister said, “We focus a great deal on the energy sector, which is vital to our national economy. Qatar’s economy is heavily reliant on revenues from oil and gas exports, which constitute more than 60% of GDP.
“Qatar’s crude oil production potential has risen to 850,000bpd and we aim to raise production to 1mn bpd within the next two years. The agreement to develop Al Shaheen Oilfield, which is currently being implemented, is the cornerstone in attaining this objective,” Sheikh Hamad bin Jassim bin Jabr al-Thani said.
