Email this    Print    Bookmark this Text

Qatar Financial Centre touts nation’s role as regional, global hub

Category: Qatar

Well-timed ascent of economic, financial apparatus proving vital to growth plans

Sponsored

As an economy undergoing rapid development and transformation, Qatar finds itself in an enviable position. The country’s fast-increasing wealth, stemming largely from the hydrocarbon energy industry, and its locus as a key member of the Gulf Cooperation Council, set between the developed West and the booming East, have brought significant potential. The Qatar Financial Centre Authority’s director, strategic development - asset management and banking Yousuf Al Jaida tells us how they are harnessing the opportunities.

How are GCC financial centres helping Asian asset managers to expand into the Gulf region?

As far as Qatar is concerned, we are engaging widely with Asian fund managers. The Qatar Financial Centre (QFC) has introduced several initiatives as part of a long-term programme to attract fund managers, including Asian ones. These initiatives have primarily been through the Qatar Financial Centre Authority (QFC Authority), the QFC’s commercial and strategic arm, and the Qatar Financial Centre Regulatory Authority (QCRA), its independent regulatory body.

The QFC Authority has been in regular dialogue with Asian firms, and QFC Authority representatives frequently visit the region. We will have senior representatives at this October’s annual IMF and World Bank meeting in Tokyo. In September last year, we signed a Memorandum of Understanding with the Pudong New Area Financial Services Bureau to strengthen relations between the financial communities of Qatar and Shanghai.

The QFCRA is also engaging with asset managers from all over Asia as well as key industry regulators, such as the Hong Kong Monetary Authority and the Monetary Authority of Singapore.

What is the Qatar National Vision 2030?

It’s important to understand that Qatar’s rapid development is relatively recent. There’s a lot to be done in building physical and human capital and strengthening institutions. The National Vision 2030 sets out the path for that development. It rests on the four pillars of human development, social development, economic development and environmental development.

How is Qatar diversifying its non-oil sector?

Qatar has the world’s third largest reserves of natural gas and about half of its gross domestic product comes from hydrocarbons. One of the main aims of the Qatar National Vision is to build a diversified knowledge-based economy with a substantial and competitive private sector. An important part of this plan for economic diver­sification is the continuing development of the financial services sector, of which the QFC is an integral component. Our focus is on three areas – asset management, reinsurance and captive insurance.

But of course we are not the only institution involved in the development of Qatar’s financial sector. The Qatar Exchange, for example, is working to improve the Qatari stock market’s liquidity, accessibility and efficiency. State of Qatar bond issues have helped to establish a yield curve. The government is moving towards creating a single regulator for financial services, a move partly intended to inspire greater confidence among investors and increase opportunities for domestic and foreign providers of financial services.

Where does asset management fit in?

First, Qatar has a world-class tax, regulatory, legal and business environment. Moreover, the recent World Economic Forum World Competitiveness Report ranked Qatar eleventh in the world – the highest in the Middle East and North Africa region. In addition, Qatar is strategically positioned between the mature markets of the West and the fast-growing economies of the East, and has Africa almost on its doorstep. All this makes Doha an excellent base from which to do business in the Gulf and beyond.

Second, Qatar is at the centre of one of the world’s most rapidly growing pools of wealth. The Gulf Cooperation Council countries together make up the world’s twentieth largest economy. Qatar itself has enjoyed on average double-digit growth rates for a decade and has one of the world’s highest savings rates, at 49%, highest per capita incomes, and highest proportions of high net worth individuals.

A third point is that the asset management industry in the GCC is maturing and investors are becoming more sophisticated. In particular, they increasingly demand high quality services, including local services, and more transparent products. In other words, firms with a presence on the ground will have an advantage over competitors who do not.

The strategic partnership formed earlier this year between Barclays Natural Resource Investments and the Qatar Asset Management Company is a good example. It highlights that not just local and regional firms, but also global players in the asset management industry are keen to operate out of Qatar.

And finally, huge opportunities for asset managers are arising from Qatar’s massive investment in infrastructure. Projects worth some US$200bn are due to be completed in the next 10 years – US$80bn worth is already underway and more than US$100bn is expected to be started in the next three years. The FIFA World Cup 2022 will also give rise to considerable additional investment.

The government would like to see private sector involvement in its infrastructure projects. Financing these and other investments will become increasingly sophisticated, for example through public-private partnerships, bond issues and risk intermediation.

Email this    Print    Bookmark this Text