Qatari finance minister Ali Shareef al-Emadi: ‘We will not stop our business and strategies . . . because we happen to have a problem with some of the neighbouring countries’ © AFP
Qatar’s sovereign wealth fund has brought more than $20bn back onshore to cushion the impact of a regional embargo imposed on the Gulf state.
Ali Shareef al-Emadi, Qatar’s finance minister, told the Financial Times that Qatar Investment Authority deposits were being used to create a “buffer” and provide liquidity in the banking system after the gas-rich state suffered capital outflows of more than $30bn.
That followed the decision by Saudi Arabia, the United Arab Emirates, Bahrain and Egypt to cut diplomatic and transport links with the nation in June. The move has triggered the Gulf’s worst crisis in years.
“We are not liquidating anything. What we have done is taken some of our liquidity from outside to inside. This is through the Ministry of Finance and the QIA, which is very normal in this type of situation,” Mr Emadi said in an interview in London. “The measure we have taken is much more of a pre-emptive and precautionary measure.”
Moody’s, the rating agency, said last month that Qatar had injected $38.5bn into its economy since the crisis erupted.
Amount that the Qatar Investment Authority is estimated to have under management
The QIA, which is estimated to have about $300bn of assets under management, has been one of the Gulf’s most active sovereign wealth funds, acquiring trophy assets such as the Shard building in London and Harrods, the department store, as well as stakes in companies including Barclays Bank and Volkswagen.
The fund has in recent months reduced its holdings in Credit Suisse, the Swiss bank; Rosneft, the Russian energy company; and Tiffany & Co, the jeweller. But Mr Emadi said the moves were related to the QIA’s investment strategy, not the crisis. He said the fund would continue to be active.
“We have enough liquid assets,” he said. “So if we see an opportunity arise, we’ll move. We will not stop our business and strategies . . . because we happen to have a problem with some of the neighbouring countries.”
Qatar is the world’s top exporter of liquefied natural gas and one of its richest nations in per capita terms. It has been spending $500m a week on preparations to host the 2022 football World Cup but was hit hard by the embargo, imposed because its neighbours accuse Doha of financing terrorism and supporting Islamist groups. Qatar denies the allegations.
The measures taken against the import-dependent country drove up the prices of food and raw materials and forced Doha to seek new trading partners. Qatar’s trade plummeted 40 per cent in the first month of the embargo but had bounced back to “99.9 per cent” of its pre-crisis levels, Mr Emadi said.
The bulk of the capital taken out of the Qatari banking system was withdrawn by the states that imposed the embargo. Mr Emadi said most of these deposits had now been withdrawn and there should not be large capital outflows in the future.
After being a “little bit bumpy” in the first few weeks of the crisis, “things are back to normal”, Mr Emadi said.
“At this level we are comfortable but I will say that . . . we will defend our market if needed. If we see any systematic risk, we are going to take appropriate measures,” Mr Emadi said. “If we need to do anything like this we will not hold ourselves to limits or caps.”
He insisted Doha would be able to tap international capital markets if it thought conditions were right.
“We will be flexible on the market. If we see opportunities, yes — it all depends on our appetite,” he said. “We have always had discussions with banks; this has been almost a Qatar strategy regardless of where we stand.”
The dispute between the Gulf states, which pits US allies against each other, has reached a stalemate after the governments leading the embargo put a list of extraordinary demands to Doha, including that it pay reparations and close Al Jazeera, Qatar’s satellite television network.
“I hope it’s finished, but if it isn’t, we are also going to plan for our economy to be sustainable, regardless,” said Mr Emadi. “We were a peninsula and now we are operating as an island.”