Qatar Stuck between Rise in Foreign Debt, Threatened Stake in Gas Markets

 An aerial view of Doha's diplomatic area March 21, 2013. REUTERS/Fadi Al-Assaad/File Photo
An aerial view of Doha's diplomatic area March 21, 2013. REUTERS/Fadi Al-Assaad/File Photo
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Qatar Stuck between Rise in Foreign Debt, Threatened Stake in Gas Markets

 An aerial view of Doha's diplomatic area March 21, 2013. REUTERS/Fadi Al-Assaad/File Photo
An aerial view of Doha's diplomatic area March 21, 2013. REUTERS/Fadi Al-Assaad/File Photo

Several international economic reports have described Qatar’s current economic status as “threatened to collapse.”

These reports stressed that Qatar’s economy has been facing a very difficult period because investment capitals are not completing their projects and plans; Qatar is heading towards borrowing money despite the rise in the value of foreign debt, which has amounted to 150 percent of the country’s Gross Domestic Product.

The threats that dominate Qatar's economy are not only related to the investment pause, the decline in purchasing power, nor to the limited competitiveness of Doha's air force but they have also reached the gas markets.

International news agencies said that Australia now threats Qatar’s Liquified Natural Gas (LNG) production as it is planning to boost exports of LNG by 16 percent from 2018.

On the other hand, Doha is considering raising at least nine billion dollars from international bond markets as the gas-rich nation boycotted by its neighbors seeks to replenish state coffers, news agencies said.

In June, Moody’s confirmed that Qatar’s credit quality would decline if tensions with its Gulf neighbors continue for much longer, raising the country’s debt ratio and hurting banks’ liquidity.

Amid recent indications that Doha is unable to hide the risks its economy has been facing, Qatar's stock market has been facing in the recent weeks a stage that proves the size of the risks threatening Qatar’s economy with Qatar's index reached its lowest level in five years.

In this context, Qatar’s central bank has added the equivalent of about $19 billion of previously unreported foreign-currency assets to its total reserves in August based on an International Monetary Fund recommendation, a move that helps offset the impact of the Saudi-led embargo.

Doha has also been facing a major crisis in terms of economic slowdown. Official figures show that Qatar's economic growth has hit its worst level since the beginning of the global financial crisis.

In addition, there is a high-risk level of liquidity shortage in local banks amid indicators showing Qatar’s central bank’s inability to continue withdrawing from the foreign deposits for so long; since this reveals the volume of financial threats in which Doha’s government won’t be able to face.



President Lula Urges Recognition of Brazil, Saudi Arabia’s Growing Economic Influence

Brazil’s President Luiz Inácio Lula da Silva at the FII Priority Summit in Rio de Janeiro (FII Institute)
Brazil’s President Luiz Inácio Lula da Silva at the FII Priority Summit in Rio de Janeiro (FII Institute)
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President Lula Urges Recognition of Brazil, Saudi Arabia’s Growing Economic Influence

Brazil’s President Luiz Inácio Lula da Silva at the FII Priority Summit in Rio de Janeiro (FII Institute)
Brazil’s President Luiz Inácio Lula da Silva at the FII Priority Summit in Rio de Janeiro (FII Institute)

Brazil’s President Luiz Inácio Lula da Silva has stressed the importance of including emerging nations in global economic discourse, highlighting the rising influence of countries like Saudi Arabia and Brazil.
In his opening remarks at the FII Priority Summit in Rio de Janeiro on Wednesday, President Lula highlighted that Brazil’s first-ever hosting of the Saudi Future Investment Initiative (FII) signifies the growing influence of emerging economies in the global economic talks, moving beyond established powerhouses.
Defying negative predictions, Brazil’s GDP grew by 2.5% over the past year, and the country is on course to become the world's eighth-largest economy by the end of my term, said Lula.
He also highlighted that in 2023, Brazil achieved a historic trade surplus, with exports from January to April reaching a record $108 billion, largely driven by the manufacturing sector.
Lula saw great potential in partnering with Saudi Arabia for mutual gains.
The Brazilian leader said his country is looking forward to creating a bilateral investment fund to explore unique opportunities and strengthen its partnership with the Kingdom.
On his part, Yasir Al-Rumayyan, Governor of Saudi Arabia’s Public Investment Fund, shared the fund’s interest in investing in Brazil, particularly in technology, renewable energy, and mining.
The PIF governor also hoped for an opportunity to invest in the Brazilian football landscape.
Al-Rumayyan emphasized the PIF’s focus on entertainment and sports, noting that 70% of Saudi Arabia’s population is under 35.
He mentioned PIF’s significant initiatives in various sports, including football, and called Brazil an ideal place for such investments.
Al-Rumayyan explained that while 80% of PIF’s assets are invested in Saudi Arabia, the remaining 20%, about $200 billion, is invested internationally. The total assets under management are around $1 trillion, with a target to reach $2 to $3 trillion by 2030.
He stressed that most investments are within Saudi Arabia to create jobs, boost GDP, and localize production of imported goods.
The three-day FII Priority Summit, happening for the first time in Latin America, powered by FII Institute, gathers global officials and business leaders from various sectors. The event debates issues under the theme “Invest in Dignity.”
The summit gathers global leaders, government officials, investors, CEOs, and entrepreneurs. It is part of the FII Institute, known as “Davos in the Desert,” based in Riyadh.
The FII Institute hosts annual global conferences and initiatives to tackle major world challenges, focusing on environmental, social, and governance issues. The Saudi PIF manages the institute.