By James Bennett
James Bennett on how '07 is set to be a big year for Qatar and its ambitious finance centre.
The emirate of Qatar is on the up and last year saw it firmly pinned on the global map for various reasons, both good and bad. The countless delays in launching the English version of the Al Jazeera came to a happy conclusion when it aired in November last year but at a cost of millions of dollars; December saw a largely successful 15th Asian Games, again at great expense; and in global business terms Qatar alerted the world to the fact that 2007 will see it become the largest single producer of Liquid Natural Gas on the planet with its output trebling by 2010.
In essence, as other resources run dry, the world will eventually come to depend on Qatar. And with billions of dollars of surplus cash in reserve (US$130bn in the kitty over the next six years) its future is guaranteed. But there lies the problem that many of the wealthy face — money doesn’t always buy you success. Just ask Chelsea FC manager Jose Mourinho. In return for the US$60m purchase of aging Ukrainian striker Andriy Shevchenko last May the alleged ‘goal machine’ has only mustered a miserly five goals in six months. The rich can sometimes get it wrong.
The Qatar Finance Centre (QFC) faces similar challenges. It may only be two years old and comfortably expanding but several key questions remain over its progress. Can it really attract the big names? Will implementing Western standards in a Middle Eastern market work? And can it cut it in the long run against other regional financial hubs? Doubts also linger over the hiring of its ‘dynamic duo' of financial heavyweights, one of which (chief regulator Philip Thorpe) was controversially ousted from the Dubai International Financial Centre (DIFC) in 2004 after regulators complained that the centre had, without a tender, awarded land to companies linked to former DIFC board members.
Local reputation aside it remains to be seen whether Thorpe will stay in Qatar long enough to see his own ambitions through. The same applies to Stuart Pearce (not the football manager), former CEO of HSBC Investments in London, who, in his own words was “brought out of retirement” to head up the QFC. Like footballers at the end of their careers have they come for the right reasons and can they stay the course?
Both men have been told they have the QFC's ‘full backing', while Thorpe is known to be happy in his more independent regulatory role, leaving him to implement international financial standards instead of local jurisdiction used by others across the Middle East. Let's just hope they start scoring some points for the centre soon. 2007 will be a big year for the QFC.