OBG talks to Ali Shareef Al Emadi, Minister of Finance

Interview: Ali Shareef Al Emadi

How feasible would it be for the government to implement a medium- to long-term budget as opposed to the traditional annual budget?

AL SHAREEF AL EMADI: Qatar National Vision 2030 outlined the state’s long-term goals, while the National Development Strategy 2011-16 has provided guidance as to the implementation of this vision, as has the work of the Qatar 2022 Supreme Committee for Delivery and Legacy in preparation for the 2022 FIFA World Cup. The Ministry of Finance is in the process of developing a medium-term fiscal framework. While not replacing the annual budget, it will provide a longer-term perspective and help ministries to plan their current and capital expenditures. The goal will be to align our future expenditure commitments with expected revenues, effectively finance the country’s development and ensure value for money across all kinds of expenditures. Such medium-term planning will also help in preparing for downside scenarios, for instance lower oil and gas prices, or if inflation is higher than expected.

What are the major priorities for the 2014 budget and have these changed over the past few years?

AL EMADI: The 2014/15 budget is currently being developed in partnership with all government ministries and agencies. The focus will be to implement ongoing and planned infrastructure projects in an efficient manner, and on continuing to develop Qatar’s human resources, including investment in health and education. This focus remains broadly consistent with the aims of budgets in previous years.

How is fiscal policy being developed to encourage growth in the non-hydrocarbons sector?

AL EMADI: Qatar’s fiscal policy is to support further diversification of the economy both through enabling investments in infrastructure, creating a supportive environment for the non-hydrocarbons sector, and by encouraging the growth of the local private sector. The government is working hard not to encroach upon the private sector. A fundamental principal of fiscal policy is that, as far as it will be possible, projects should be competitively tendered to capable local companies, on their own or through partnerships with regional and international enterprises, rather than being implemented by state-owned institutions.

On the revenue side of fiscal policy, the tax environment is conducive to the development of the nonhydrocarbons sector, as local firms are largely exempt from taxation and foreign firms only pay a flat tax of 10% on their eligible locally generated profits.

In what ways does the ministry intend to enhance its oversight over expenditures by other ministries in the lead-up to the 2022 FIFA World Cup?

AL EMADI: The ministry is developing a government financial management information system to enable access to the latest data on expenditures. Beginning in 2014, this will be progressively rolled out to ministries, enabling timely remedial action to be taken if required.

At the same time, Sheikh Tamim bin Hamad bin Khalifa Al Thani, Emir of the state of Qatar, has placed a renewed emphasis on performance management, to ensure that spending on infrastructure and other areas creates real value for Qatar. The ministry will work to improve coordination and planning amongst all relevant parties, particularly on the major multi-year infrastructure projects taking place over the coming years.

With the budget currently based on a moderate price of $65 per barrel, to what extent will current oil prices allow for additional revenues?

AL EMADI: During 2013, the oil price exceeded the budget price assumption and according to consensus forecasts, it will remain high during the remainder of the fiscal year. Some of the excess revenue may be directed to urgent expenditure requirements, such as advancing infrastructure projects, but much of it will be saved and prudently invested for future generations, in line with the state of Qatar’s long-term vision.