As Qatar’s economic gallop continues unabated, the country is set to have the world's second-fastest growing economy this year, behind China. By the middle of the next decade, it will be the second-largest economy in the region, behind Saudi Arabia.
Making a presentation yesterday at the ‘Middle East Advanced Financial Crime Prevention Symposium & Training Course’ being held at the Sharq Village & Spa, Philip Thorpe, Chairman and CEO of the Qatar Financial Centre Regulatory Authority (QFCRA), said: “However, rising project costs are likely to continue as pressure on construction materials and labour remains. Inflation is also among the highest in the GCC.”
Financial figures related to the Middle East are mind-boggling to say the least. Till date, $2tn capital has accumulated and in 2007, there was $750bn in liquid assets. Offshore investment of capital has been growing, there has been significant reinvestment of regionally-generated capital and massive inflows of project finance capital and private equity investment.
Thorpe said between 2005 and last year, the GCC region had a current account surplus of $585bn, compared to China's $521bn and Japan's $437bn. The region's official foreign assets were growing by more $150bn a year and that too, with oil priced at $50 a barrel.
With oil prices rising by the day, a QFCRA study showed that should oil hit $200 a barrel, as many say it could, Saudi Arabia would stand to gain $52tn in the form of capital flow from oil and gas revenues, the rest of the GCC would net $96tn and $154tn for OPEC Middle East. A perhaps more realistic $100 a barrel would fetch Saudi Arabia $26tn, $96tn for the rest of the GCC and $154tn for OPEC Middle Esat.
Thorpe said: “Inflation will remain a serious issue. Huge fund flows, both formal and informal, will provide fertile ground for those with criminal or fraudulent intent.”
Discussing the issues of Anti-Money Laundering (AML) and Combating Terrorism Finace (CTF), Thorpe, said: “The current AML/CFT regulatory system in Qatar is a complex mix of authorities, laws and rulebooks - to enhance transparency in the overall financial crime prevention regime, each institutions' mandate needs to be clearly differentiated.”
Earlier, Sheikh Ahmed Eid Al Thani, Head of Qatar's Financial Information Unit (FIU), said the FIU is a partner to the Egmont Group. The Egmont Group is an international grouping of FIUs, formed in 1995. The next meeting of the Group will be held in Doha next year.
“Qatar is keen to upgrade our systems. We have submitted a proposal to the IMF for evaluation. At the FIU, we have 66 officials covering the entire country. We hold regular meetings with banks and exchange offices for regular updates,” he said.