Qatar has distinct advantages that come in handy when navigating through the current economic challenges, says prominent Qatari banker and QIIB chief executive officer Abdulbasit A al-Shaibei.
“We have an economy that is very well manageable. The size of our population is to our advantage. We also have huge natural resources, reserves and investments. The current global economic slowdown is going to be challenging, but it is not going to upset our economic plans. It is not going to stop our major projects from going ahead,” al-Shaibei said in an interview with Gulf Times.
Qatar’s government has always been conservative in terms of pricing oil for budget preparation, he said
“Even when the oil price was in three-digits, our budgeted oil price was very low. For many years, the oil price stayed high and because of our prudent policies, Qatar has been able to build up adequate reserves and investments. So as far as we are concerned, there is no panic. But there will be challenges down the road because of the global economic uncertainties.”
Al-Shaibei said he remained quite “optimistic” about the Qatari economy. The government has made it abundantly clear it stays committed to Qatar’s economic development programme. All the major projects are steaming ahead and the banks are busy with lots of these.
“This is the right time to optimise our resources. The focus now is on efficiency in spending. In this kind of environment, you will find the real investors…speculators will stay outside the market. And people will start thinking in a rational way.”
Asked whether the dollar peg would force Qatar to mirror the US Federal Reserve (Fed) in terms of interest rates, al-Shaibei said: “Personally, I don’t expect any changes in the interest rates in the short to medium term. I don’t think the Qatar Central Bank has to follow the Fed. This is because the gap is huge between US Fed and QCB rates.”
On the perception of a liquidity problem in the GCC financial system, with banks in particular, he said: “Here comes the role of treasury in banks. Treasury in banks should secure long-term funding to meet any obligations in the short to medium term. Here we need an efficient treasury.”
Clearly, he said, there are challenges to the financial system at large because of the lower oil prices and other global uncertainties.
“But what we are going through is a cycle. This is not the first time it is happening. In the past we have managed it quite well. God willing, we will manage it this time round as well,” al-Shaibei said. ‘Spending efficiency key to success’: Business Page 1