Sheikh Tamim bin Hamad Al Thani, Emir of Qatar, on developmental and economic issues

Viewpoint: Tamim bin Hamad Al Thani

The government is currently leading efforts to implement the National Development Strategy 2011-16. This strategy has been subjected to an objective appraisal three years after being launched to monitor progress made in its implementation as well as amendments to its targets in light of changes in various economic, social and demographic factors.

This appraisal has shown that a number of parties that are taking part in the development march have drawn up their operational plans, and it has also shown that the institutional cooperation and coordination between these parties have achieved positive beginnings. However, some parties have not done that yet.

I have issued directives to the prime minister to prepare plans with a practical timetable to solve issues related to warehouses, logistical areas, economic zones, an industrialisation plan, the licensing of required factories alongside a list of unwanted industries (unless there is an exception), the resolution of workers’ housing issues, the development of a plan to meet the need for land plots as well as a plan for the promotion of economic and trade sectors, the activation of the financial and stock markets, the launch of the first agricultural and food group, and the development of a strategy for tourism with an illustration of tourism projects that will be completed during the next two years.

The plans are not drawn up for the purpose of completing a procedure as a formality only – these plans are drawn up to be implemented. As a result, they must be designed carefully and must be enforceable within the framework of relevant inputs, including available budgets. Our institutions must get used to respecting the projected plan and be held accountable for this plan and its goals.

Our national economy remains, as it has always been, our primary preoccupation, and diversifying income sources has become a necessity that we seek to achieve by various ways, namely by allowing the private sector to actively participate in various aspects of economic activity and the overall development of the state and by promoting investment for future generations.

Our economy has achieved good growth rates in terms of GDP, recording expansion of 6.3% in 2014. Realising this rate of growth is considered a great achievement if we take into account that the contribution of the hydrocarbons sector to GDP did not significantly increase during the year. All the growth came from the expansion of the non-oil sector, but particularly the services and financial and construction sectors, which have been stimulated by huge external and internal investments, where the growth rate reached about 11%. This is in addition to the development in the 2014 trade balance compared to previous years, which led to a surplus in the trade balance of 52% of GDP.

While that growth has been accompanied by a rise in inflation to 3.1% in 2013, we continue our efforts to curb inflation through coordinating fiscal and monetary policies, encouraging competition, and setting a timetable for implementing major projects to reduce pressure on capacity.

Encouraging competition to reduce prices will not be enough, but it is necessary to ease red tape and streamline procedures that increase investment risk; raise storage capacity and improve its condition; to try to reduce real estate prices; and to plan carefully for managing and implementing projects so as to avoid constant change of specifications during the course of work that may increase cost. It is also necessary to control the prices of consumer goods.

With our constant emphasis on the role of the private sector as the main partner in development, the government has approved an ambitious programme to stimulate the private sector and support the infrastructure needed for trade.

This government programme, which is composed of 19 different projects and initiatives, supports business competitiveness. The government is also in the process of completing the preparation of new legislation and measures that will contribute to developing the business environment in Qatar and leaving the widest possible space for the private sector to contribute to sustainable development in the business sector. I have directed the government to work on launching economic zones and the new port project in accordance with specific time limits. And in this context, the government is also in the process of merging Enterprise Qatar with the Qatar Development Bank, in order to unify efforts and to ensure implementation of supporting projects that are directed towards this important sector.

Within the context of the efforts to encourage foreign investment, non-Qataris have been allowed to increase the percentage of equity stake they can own in companies listed on the Qatar Stock Exchange, and GCC citizens now have the same treatment accorded to Qataris in this respect.

The government has taken other serious steps to promote the participation of the private sector, by encouraging government institutions to assign services and support operations to private companies, and a circular has been issued requiring state-funded institutions not to establish companies or engage in economic activities without permission from the Office of the Prime Minister, for the state should not compete with the private sector.

Mesaieed Petrochemical Holding Company was listed on the stock exchange under the state’s plan to offer part of the shares of leading government companies to the public, in order to increase citizens’ participation in economic activities and strengthen financial markets in the state.

In the preparation of the annual budget for the year 2014/15, raising the efficiency of government spending was taken into account. Large increases in expenditure have been allocated to implement major projects in the health, education, infrastructure and transportation sectors, since the total expenditure on these projects will be over 50% of the total expenditure in the budget for 2014/15. The estimated total budget expenditure for 2014/15 has reached QR218.4bn ($59.86bn), an increase of some 3.7% over the previous budget.

Perhaps the best testament to the success of our economic policies and the strength and status of the Qatari economy is the international indices that are prepared in accordance with the principle of objectivity and on the basis of actual figures. These show that Qatar has maintained an advanced credit rating, among the highest in the world, and it has also ranked highly on the global competitiveness indices.

We are currently facing a decline in oil and fuel prices at the world market level. This is not the place to discuss the reasons for this, but I would like just to emphasise here that our economy is strong and solid and will not be affected by such developments, and our budget is based on very conservative estimates of hydrocarbons prices.

But nevertheless, I stress that waste, extravagance and mishandling of state funds; lack of respect for the budget; and reliance on the availability of money to cover up mistakes are all behaviours that must be gotten rid of, whether oil prices are high or low. Reasonable spending is an economic matter first and foremost; however, it is not only an economic matter, but it is also a civilised issue related to the type of society that we want and the type of individual that we rear in the State of Qatar.

The process of building a state of institutions and laws should have a constitutional and legislative framework, and the State of Qatar has seen in recent years a major legislative effort to complete the legislative system necessary for state institutions to perform their tasks efficiently as well as to regulate all of the various aspects of activity in the state.

The above is sourced from the opening speech of the Advisory Council’s 43rd session.