The war in Gaza will hit economies across the Middle East if it is not resolved, and the conflict urgently needs a non-military solution, Qatar’s finance minister pointed out.
Qatar, whose mediators are involved in negotiations for the release of Israeli hostages by Hamas, has also helped mediate several regional conflicts, including in Afghanistan.
”The solution is really to look for a permanent solution to the main issue in the Middle East, which is the Palestinian problem. This cannot be solved by military actions,” said the Qatari Finance Minister Ali Al Kuvari in Davos.
”If we leave them unresolved in the long term, we will always go through cycles of violence, cycles of unrest that will always slow down the region,” he said during the World Economic Forum in the Swiss mountain resort.
The Gaza war began after Hamas fighters attacked southern Israel on October 7th, killing 1,200 people and taking 240 hostages. Israel responded with a siege, bombardment and invasion that Gaza health officials say has killed more than 24,000 people.
Iran-backed militias in Lebanon, Iraq and Yemen have also attacked targets in the region to support the Palestinians.
Leading LNG exporter Qatar is also one of the world’s largest investors through its Qatar Investment Authority (QIA)sovereign wealth fund, and its risk assessment has implications for its investments.
Kuvari said in an interview that Qatar will achieve a fiscal surplus again this year, albeit a smaller one, because a very conservative oil price of $60 per barrel was forecasted. The surplus would be higher if prices remained at the current level of $78.
Kuvari expects that Qatar will still achieve a fiscal surplus despite an expected 11 percent drop in revenue and a one percent increase in expenditures.
”We always like to take a conservative view of the price of oil when it comes to calculating income,” stated Kuvari.
Any surplus is split between paying off the national debt, central bank reserves and QIA, says Kuvari, who is a board member.
He declined to disclose how the money is distributed or the value of the QIA fund he manages.
Qatar achieved record revenues from gas exports in 2022, when global prices soared after Russia invaded Ukraine.
The Sovereign Wealth Institute estimates that Qatar has grown its assets under management to $475 billion over the past few years.
Asked if QIA could grow this to $1 trillion, Kuwari said the fund’s job is to grow assets.
”A trillion, two trillion, even three trillion is better than one,” he said.
He added that QIA wants to invest in companies dealing with artificial intelligence in addition to technology, infrastructure and pharmaceuticals, and especially in biomedicine.
Despite cutting its stake in British bank Barclays last month, QIA remains positive about the United Kingdom (UK) economy, which Kuvari described as “strong and resilient”.
Qatar plans to launch its first sovereign green bond “very soon”, which Kuwari said would be its first external debt issue in four years.
”We are not hungry for money. It’s purely to make a statement. The market is hungry for publishing. Many investors approached us,” he said.
Qatar, host of the 2022 FIFA World Cup, is trying to diversify its economy away from oil and gas while attracting foreign investment.
Kuvari explained the World Cup continues to have a positive impact as the number of visitors rises to four million in 2023, surpassing 2.3 million in 2022 during the championship.
E.Dz.
