QCB statistics make attractive reading for Qataris

As if to prove the point, just last week the British business daily, the Financial Times, linked the Qatar Investment Office with a possible joint bid for German owned Thames Water, a UK based water and waste outfit, worth up to $13.3 billion.

Expenditure and surpluses

Earlier this month, the Qatar Central Bank published a raft of statistics, highlighted in The Peninsula, showing that development expenditure in the country has risen five-fold in as many years. In the 2001-2 tax year, the state's development expenditure was $869 million, while last year it had jumped to $4.5 billion.

The increase has largely been due to an even more robust widening of Qatar's budget surplus which has grown six-fold over the same period. The surplus last year was $4.1 billion, compared to a relatively paltry $626 million in 2001-2.

Qatar's government has seen a year on year increase in its budget surplus over the past five years and this can be put down to increased exports and, most especially, surging oil and gas prices, stoked by high global demand and geopolitical pressures in Iran and, currently, Lebanon.

Despite Qatar's pro-active attempts at diversifying its economy, its crude oil and gas income still accounts for a sizeable two thirds of its revenue, largely unchanged from 2001, the starting point of the bank's analysis.

If the impressive budget surplus statistics weren't enough in themselves to put a smile on the QCB Governor's face, then the country's return from its various investments surely would have done. The Qatari government has seen a four-fold return since 2001-2 and last year investments produced $4.2 billion.

Making money from water

While oil prices remain high, a number of Gulf nations are taking the chance to invest their profits and surpluses into diverse overseas assets and Qatar is certainly in the vanguard of this.

Last week, the Financial Times revealed that Qatar's state owned investment fund and Swiss investment banking firm UBS were expected to head a consortium bidding to buy the UK's Thames Water, owned since 2000 by German power group RWE.

Potential bidders have until August 15 to make an offer and RWE is still at this point deciding whether to sell or float the company instead. If the utility firm does come up for sale then the competition to acquire it is likely to be fierce, as it promises stable earnings and makes an attractive long term investment proposition.

Indeed, as the FT pointed out, with the Gulf as a whole expected to net around $370 billion this year from oil, other bidders from the Middle East, wanting to make their own revenues work harder, could also enter the race.

Top earners

A further set of figures that bodes very well for Qatar was also put together by the QCB earlier this month. Income per capita in 2005 rose by 14 per cent and reached an average of $43,000.

Qatar was already one of the richest countries on the planet but now it is behind only Luxembourg in the income per capita top ten; with its liquefied natural gas production set to rocket in the next six years, oil prices hitting record highs and its investment strategy clearly working well, it won't be long before it moves to the top of the charts - and quite possibly stays there for some considerable time.