Following the murder of journalist Jamal Khashoggi, Saudi Arabia has been shunned by most of the world.
A safer bet
According to Reuters, Qatar is fast-becoming the most prominent nation in the Middle East and most certainly a safer bet following the dramatic events surrounding Khashoggi.
With a colossal natural-resource of wealth, a ruling family becoming more progressive, and a pot of cash to invest in diversifying its economy, Qatar provides asset managers with everything they are looking for.
Despite being placed under blockade by Saudi Arabia, the UAE, Bahrain and Egypt on June 5th, 2017, Qatar has continued to prosper, diversifying its economy in order to rely less on its Arab neighbours.
Since the Saudi-led siege took hold, Qatar switched trading partners and invested US$40 billion of reserves and overseas deposits from its central bank and US$300 billion sovereign wealth fund into its lenders. There’s already around US$16 billion that’s been refinanced by Asian and European banks and investors, which has plunged even more money into a growing economy.
Reuters writes that assuming Qatar can refinance the rest – which should be easy given a potential 4.7 percent budget surplus in 2018 over last year’s 2.9 percent deficit – it would have US$40 billion of spare cash.
LNG: From 77 million tonnes to 110 millions tonnes by 2024
But there’s even more. Doha’s hike of liquefied natural gas production from 77 million tonnes to 110 million tonnes by 2024 could create an extra US$40 billion of revenue. With annual capital investment due to halve from around US$27 billion as the 2022 soccer World Cup nears, the Qatar Investment Authority could be packing some even more serious firepower.
Qatar is continuing to invest its money in diversifying its economy, building a steady infrastructure, powering up its sea ports and focusing on a homegrown industry. It’s working well and the world is noticing.
Reuters concludes that maybe next year investors will head to Doha instead of Saudi Arabia, because the world is fast-becoming disillusioned with a kingdom that rules with an iron fist and dispenses with those who do not agree with its dubious method of rule.