Increasingly Qatar is emerging as a recognised player in international scene with regards to both outward and inward investments. In reality, Qatar has made international headlines through some bold investments running in billions of dollars.
Earlier this month, Qatar Holding acquired a 5 per cent stake at Banco Santander Brazil at the cost of $2.7 billion (Dh9.93 billion). Qatar Holding is a fully owned affiliate of Qatar Petroleum, in turn a major state-owned entity.
The investment serves the interest of the Brazilian bank, as it to connect to emerging and fastest growing economies worldwide. Certainly, this is a rewarding development for Brazil by virtue of coming only months after Qatari Emir Shaikh Hamad Bin Khalifa Al Thani visited the country as part of a regional tour.
Also, in the first half of the year Qatar though the same investment arm captured the global attention through purchase of London's department store of Harrods from the Egyptian-born tycoon Mohammad Al Fayed. The investment was reportedly put at $2.3 billion.
And in 2009 Qatar made another exceptional venture after acquiring a 17 per cent stake of the integrated Volkswagen and Porsche firm following merger of the two concerns.
The deal included Porsche establishing research and development and testing facilities in Doha. In addition, Porsche and Qatar Holding agreed to explore other areas of co-operation in the fields of research and development, technical service and support in Qatar. As such, Qatar is contributing in the progress of car industry.
Happily, foreign direct investment or FDI is not a one-way street. Recently published statistics put Qatar as the second largest recipient of foreign direct investments within the Gulf Cooperation Council (GCC) countries.
This was put on display at the World Investment Report 2010, in turn issued by The World Conference on Trade and Development (Unctad). The annual report traces movements of FDI around the world.
Inward investment
In particular, Qatar managed to more than double inward FDI from $4.1 billion in 2008 to $8.8 billion in 2009. The credit partly relates to sustained progress of the country's energy sector, notably gas.
Notably, Qatar is the largest exporter of liquefied natural gas (LNG) in the world, a position overtaken from Indonesia several years ago. For good reasons, the country continues to expand its gas industry with annual LNG output amounting to 54 million tonnes, up from 38 million tonnes only three years or so ago. Still, the plan calls of reaching output level of 77 million tonnes a year by 2012.
Conversely, the Unctad report noted general drop in inward investments in GCC in 2009, partially as a consequence to global financial crisis. For instance, Saudi Arabia, the largest regional recipient of FDI, saw the value of inward investments dropping from $38.1 billion in 2009 to $35.5 billion in 2008.
Other than Qatar, Kuwait was the only other GCC to witness increase in the value of inward FDI. However, Kuwait merely managed to change course from a deficit $51 million in 2008 to a surplus of $145 million in 2009. Yet, size of incoming FDI in Kuwait remains the lowest amongst GCC states.
Undoubtedly, FDI is a sort of international voice of confidence in different economies. To be sure, more than 200 countries attempt to attract foreign investments to help them address economic challenges. FDI helps spurring growth in local economy and serves as a means of providing employment opportunities.
As far as Qatar is concerned, the country is proving that FDI is a two-way street. Qatar is increasingly attracting more foreign investments and concurrently doing the same abroad.
The writer is a Member of Parliament in Bahrain.
