Qatar’s elevation to the msci emerging markets index in June felt like an overdue arrival for one of the world’s richest economies into the portfolios of world investors.
Active asset managers have since followed passive flows into the country’s stockmarket – one of only two in the Gulf Cooperation Council, the other being the United Arab Emirates, to have been upgraded by MSCI in this way.
There is a feeling that finally foreign capital is engaging with Qatar, while Qatari wealth continues to flow relentlessly in the other direction.
Fuelled by enormous hydrocarbon resources, represented in international business by one of the world’s more brazen sovereign wealth funds, and gearing up for the 2022 World Cup, Qatar’s economic arrangements are increasingly dynamic and ever more closely watched overseas.
The man at the helm of the economy, Ali Sherif Al Emadi, has a lot to occupy him.
Al Emadi made his way to the finance ministry via Qatar National Bank, where he spearheaded the bank’s transformation from a local lender to arguably the most powerful financial institution in the Middle East, present in 25 countries worldwide.
This sense of working on a grand scale is crucial, given the scope of Qatar’s own ambitions. “The new finance minister is well respected,” says Charles Hollis, a director at FTI Consulting and former director-general of the Middle East Association. “He’s a banker of long standing, he’s well regarded, and all the signs are that he’s doing a good job.”
His appointment, Hollis says, reflects a belief on the part of the Emir “that things need to be done properly,” and that private sector expertise has a role to play.
Nowhere on Earth is attempting to build infrastructure on such a scale as Qatar, relative to its size.
For the World Cup, Qatar has promised to spend at least $65bn on infrastructure, stadia and tourist facilities, a figure that Bank of America Merrill Lynch expects to rise to $95bn.
There is $25bn of investment in a road and rail network, including a metro system half the length of the London Underground for a city with a 10th of the population. All of this is being built from scratch.
The new $15bn airport is open in Doha, with an eventual targeted annual capacity of 50m passengers, and a new port is expected by 2020.
All told, Al Emadi has spoken of up to $182bn being spent on public projects in the next five years — not counting oil and gas.
With wealth streaming from the sea bed at a rate that has made Qatar the richest country in the world on a per capita basis, one might ask: is there a job for a finance minister to do?
Well, all of this spending is impressive enough, but it creates problems for those in charge of keeping the national finances in good health.
There is no avoiding the fact that spending on this scale must lead to inflationary pressures; Al Emadi must attempt to keep those pressures in check.
With growth and fame come pressures too. Qatar’s hosting of the World Cup is under threat for a host of reasons, from alleged voting irregularities to the summer temperatures.
The country’s rumoured intervention in the politics of Middle Eastern neighbours (notably Egypt and Libya) has earned the ire of other Gulf states. Even its Al Jazeera TV station, while an important independent voice of journalism in a region that needs it, creates challenges for the country diplomatically.
When your ministry is the one that controls all the money, you tend to be a public face for these debates and disputes, and Al Emadi will need to navigate them, as Qatar not only grows as a domestic economy, but cements its place in global investment portfolios and upon the world stage.