Viewpoint: Sheikh Tamim bin Hamad Al Thani
Economic affairs remain a matter of prime concern for us, especially in light of the circumstances created by the sharp decline in hydrocarbons prices; however, we are determined to achieve the goals that we have set for ourselves in the Qatar National Vision 2030 (QNV 2030). New realities are emerging in the global energy industry as a result of accelerating technological developments. This has led to an increase in oil and gas production to unprecedented levels and the subsequent sharp decline of prices in global energy markets. In addition, declining growth rates in significant energy markets have placed pressure on prices due to the decrease in demand and increase in supply.
Frankly speaking, in the past we anticipated that high energy prices would not persist indefinitely, although no one could have predicted the fast decline in energy prices. Therefore, we adopted the QNV 2030 in preparation for this day, and in spite of the sharp decline, GDP grew at a rate of around 3.6% in 2015, in comparison with the average 1.9% growth recorded in other oil exporting countries in the Middle East, according to the IMF. Qatar has maintained one of the highest credit ratings in the world. It has also continued to assume top positions in the World Economic Forum’s Global Competitiveness Index, ranking 18th overall and second in the Middle East. We do not mean to underestimate the negative repercussions of the current energy crisis on our economy; however, we want to illustrate the reality, namely that our economy is still robust and receives a high level of confidence from global ratings agencies. This is an accomplishment when the prevailing circumstances are taken into account.
To counter the negative effects of the global economic situation, we should continue to implement the development process we started in 2008 by launching the QNV 2030 and the first National Development Strategy (NDS) 2011-16, and we are now in the process of launching the second NDS for 2017-22. We have to intensify the efforts we started during the first NDS and rely on an in-depth, objective assessment to identify its strengths and weaknesses. First, we should identify the obstacles that hampered the implementation of some programmes and projects and draw lessons in order to avoid recurrence. Second, maintain the required continuity to complete the initiatives and infrastructure projects under implementation, including the facilities for the Qatar World Cup 2022. Third, to review development priorities in light of the outcome of the first NDS and new global developments. Fourth, identify available opportunities for new programmes and projects compatible with sector and national priorities. Fifth, to complete education and health projects in a manner that satisfies the needs of citizens, according to the highest global standards. Sixth, to continue to eliminate bureaucratic impediments facing investments. The government, for example, has pledged to implement the single window system and the standardisation of transaction procedures. Seventh, stimulate the private sector and direct it towards the most productive aspects of the QNV 2030 trends. Eighth, transition from a state entrenched in simple social welfare policies to one that empowers all segments of society to participate in national development. Ninth, undertake a continuous review of tariffs and fees for many services and commodities to better reflect their economic cost, and to direct subsidies towards groups in need in a way not conducive to extravagance and waste. Lastly, develop and modernise the public sector’s institutions to promote efficiency, transparency and accountability.
Putting these elements into effect requires the development of a culture of planning, work and accomplishment. In addition, providing the required finance to implement these commitments requires a change in the culture of consumption and the handling of wealth, as well as an approach that combines the expectations of both the state and its citizens. We have taken advantage of the drop in energy prices to explore the potential for rationalising spending, and distinguishing the necessary from the unnecessary, as well as the beneficial from the non-beneficial. Work will continue on increasing the efficiency of public spending and enhancing transparency and control through a close follow-up of all government projects and programmes and a focus on major development projects. The synergy between fiscal and monetary policies to fight inflation, tackle liquidity pressures and strengthen the banking sector has been promoted.
In addition, the state has made great efforts to strengthen the private sector and increase its participation in the economy. First, by implementing the new government tender law, which provides exemptions for small and medium-sized enterprises (SMEs) from some requirements of government tenders, such as financial guarantees. Second, by updating trade laws and legislation to liberalise certain goods and services from the commercial agents’ monopoly and permitting non-agents to import them. The government also is working on liberalising other sectors to bolster competition. Third, by updating corporate laws and legislation and the method of drafting financial statements of companies so as to comply with international standards. Fourth, by finalising a law on partnership between the public and private sectors which will enable government projects to be awarded to the private sector to promote foreign investment, especially in infrastructure. Fifth, by involving of Qatar Development Bank in manifold activities to further encourage and support SMEs that require financing. Sixth, by developing large-scale housing complexes for workers in the industrial area and in economic and logistical zones.
In the area of infrastructure, activities for developing the highway network have been intensified across Qatar. Seven projects have been completed and the implementation and development of 15 more projects is under way. Six other projects will be implemented at an estimated total cost of QR60bn ($16.5bn). All of these are scheduled to be completed before 2022.
While seeking to reduce dependency on oil and gas and achieve economic diversification, we will still continue to pay attention to the energy sector as an important source from which to expand our economic foundations. Therefore, our activities in this sector are going to be based on several levels with a focus on local and overseas exploration projects.
In line with the QNV 2030 for the preservation and conservation of the environment, we have commissioned a sizeable project to recover evaporating gas lost during loading on board tankers to reduce the carbon footprint. We also set out to generate electricity from solar energy, with a production capacity of 200 MW in the first phase, rising later to more than 500 MW.
The state has carried out important steps to rationalise spending by combining the need to develop a modern and distinctive public sector with the need of the private sector to implement projects and programmes set by the national strategies that aim to achieve sustainable prosperity. This development process will not succeed without the cooperation of everyone. A public sector employee should not be inactive at work. A job is a right, but completing this job is a duty. Obligations to citizens on our part include education, training and qualifying them for work, and it is their duty to do this work in the best way possible, accomplishing tasks on time and with the accuracy and integrity required. Citizens also bear an additional responsibility to be proud of their mission in serving the community and the state.
As for entrepreneurs, we expect them to help the development process by launching bold national initiatives and entering into real, not just nominal, partnerships with the world’s most reputable foreign companies to transfer technology, encourage excellence and innovation, and create an inventive private sector capable of competing globally, while maintaining their commitment towards the QNV 2030.
The above is sourced from the opening speech of the Advisory Council’s 45th session on November 1, 2016.
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