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Tribune News Network Doha
With the government enhancing efforts to diversify and enhance self-reliance, the Saudi-led siege on Qatar could generate a series of long-term positives, said Oxford Business Group (OBG). “Qatar’s economy maintained steady growth throughout 2017, with forecasts of a stronger year to come as efforts to boost selfsufficiency in key sectors gain traction,” the report said. In its 2017 review of the country, OBG lists areas where Qatar has turned the risks of the blockade into benefits. Blockade spurs diversification strategy Some experts believe that the blockade could generate a series of long-term positives, with the government enhancing efforts to diversify and boost self-reliance. “Given the regional tensions that arose in mid- 2017, there were some hurdles to overcome,” Abdulla Bukhowa, CEO of Standard Chartered Qatar, told OBG. “The year 2017 has been something of an adjustment, as the country faces this new reality. Preparation and planning taking place now will generate a strong rebound across the entire economy in 2018.” Some of the measures implemented to boost self-sufficiency include investments in the domestic production of dairy, meat and poultry products, as well as food processing and light industry. One example was seen through the decision to purchase 14,000 cows and construct a dairy farm to address the country’s reliance on imports. According to industry officials, the move should allow Qatar to be milk selfsufficient by mid-2018. Economic growth to remain above regional ave. Despite the external headwinds, Qatar remained a regional leader in terms of economic expansion this year. The economy is forecast to expand by 2.5 percent in 2017 and 3.1 percent in 2018, according to the latest IMF estimates, released at the end of October. This is higher than growth estimates for the Middle East as a whole, which the IMF predicts will expand by 1.3 percent this year and 2.8 percent in 2018. In an earlier report, issued at the end of August, the fund said Qatar’s current account position was set to improve to a surplus of around 3.9% of GDP in 2017, rebounding from a deficit of 7.7% in 2016, largely due to a contraction in imports and the recovery in oil prices. Banking stays resilient despite outflows Prompt action by the government forestalled any instability in the financial services sector, with the transfer of funds — much of which came from the Qatar Investment Authority — easing concerns of a liquidity crisis. The requirement for such transfers has eased as local lenders move to secure funds from banks in Asia and Europe, rather than regional sources. Confidence in the banking sector has seen deposit levels at commercial banks rise after a mid-year dip; total deposits stood at QR794.3bn ($218.2bn) at the end of October, up from the QR736bn ($202.2bn) recorded in January. Lifting of gas moratorium to boost energy output The year 2017 also saw Qatar increasing its energy output. In April, the government announced it was lifting a 2005 moratorium on further development of its main gas reserve, the North Field, part of a programme aimed at lifting annual gas output to 100m tonnes by 2024, up from the 78.7m tonnes posted last year. Bringing the southern section of the North Field into production would add 2bn cu feet per day to gas capacity, according to the authorities, representing 10% of the field’s current output. The increased capacity will lift Qatar’s earning potential and allow it to address growing global demand in the coming years. It is also expected to strengthen the country’s position as the world’s leading liquefied natural gas exporter amid increasing competition from countries such as Australia and Russia.
