Interview: Abdul Hakeem Mostafawi
How can Qatar reinforce its appeal to investors in international debt markets?
ABDUL HAKEEM MOSTAFAWI: Economic development is an essential part of Qatar National Vision 2030, which aims to create a balance between a hydrocarbon-based and knowledge-based economy. Qatar has the advantage of a diversified product mix, including gas, liquefied natural gas (LNG), oil and condensate, as well as downstream products that are attractive for international investors. The country has also been working to reduce its reliance on hydrocarbons, with a focus on developing domestic manufacturing, value-added products and services with emphases on agriculture, food processing and tourism. The Qatar Investment Authority, which plays a key role in foreign investment and supporting economic diversification, has exceeded $350bn in assets under management, as publicly available information.
What opportunities are special economic zones (SEZs) likely to bring to Qatar?
MOSTAFAWI: SEZs will help to attract regional and international businesses on a larger scale. Across a range of sectors, there has been an increase in production for both domestic consumption and regional re-export. This includes products to support Qatar’s infrastructure requirements leading up to the 2022 FIFA World Cup. Professional services like education and health care, are other key areas in which we are keen to provide support. SEZs are central to Qatar’s future economy, providing local businesses with both the physical and regulatory space to grow, and attracting inward investment from overseas. SEZs will also include logistics and warehouse services that open opportunities for regional distribution.
How can international expertise help local authorities to tackle online security risks?
MOSTAFAWI: Highly skilled personnel, capable of managing complex and large-scale operations, can provide knowledge and advice where it is needed, but it is also important for them to be aligned with regulatory requirements. There are centres of excellence and experts in cloud services, data and cybersecurity, which we can harness. This knowledge can then be shared with regulators to help governments and central banks create a framework in line with the latest technology.
The increase in cybersecurity threats makes it essential to share this knowledge and increase collaboration with local banking forums and law enforcement agencies. This will ensure all parties understand the signs of a cyberattack and the methods used to defend against online threats. Working with service providers is also beneficial as they can share the latest technology with banks, which in turn can assist them in improving their products to meet their unique security requirements.
What is your assessment of organic growth opportunities in Qatar’s local banking sector?
MOSTAFAWI: Qatar’s economic performance remains steady. Three key factors will have an effect on growth opportunities: expansion in LNG production to 110m tonnes per annum; SEZs; and the air and seaport expansions. Non-hydrocarbons output also grew year-on-year, in line with the second National Development Strategy (NDS), which pushes for economic diversification.
The NDS has identified priority sectors and intends to promote the establishment of public-private partnerships therein. Banks have also seen an increase in non-resident inflows from outside the GCC into various sectors, which has diversified funding sources and deposit maturity structures. In addition, foreign liabilities and the fact that oil prices have been higher than budgeted have enhanced liquidity, and credit has been growing at a healthy pace in the private sector on the back of improved government spending. These factors – plus expected economic activity linked to upcoming hydrocarbon infrastructure projects – should support organic banking growth in the short to medium term.
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