towards a macro-fiscal framework for qatar · 2016. 1. 20. · 1 towards a macro-fiscal framework...
TRANSCRIPT
1
Towards a Macro-fiscal Framework for Qatar
Thilak [email protected]
GSDP, Doha, Qatar 23 to 25 January 2011
The World BankThe World Bank
The World Bank2
Day 2, Session 4 – MTMF for Qatar: Investmen & External Debt
Topics covered:
1. Major elements of the investment module
2. Key assumptions3. How estimates are generated4. Links to main model
The World Bank3
NDS and investment
NDS has sector report on economic infrastructure investment
Background: Investment data compiled for the NDS report
Based on surveys of investment plans of different agencies and MEED Project database
Captures situation as known around mid-2010
The World Bank4
NDS and investment
Framework emphasis: overall as well as time phasing of investments
Lacking from beginning: could not obtain corresponding and relevant information of the projects covered:– Import content of investments– Labor requirements
The World Bank5
NDS and investment
So, had to make our own assumptions in these
In most cases, financing was also not clear
Prevented a direct link to external debt, FDI etc
Fortunately, GSDP had worked out some labor force projections (several scenarios) which could be used
The World Bank6
Sectoral aspects
HC and non-HC separation was very important
Identify contributions to growth coming from these two key sectors
HC sector investments: mainly based on capital expenditure plans of QP
Some data available here in various forms
Key assumption: North Field embargo continues during NDS focal period 2011-2016
The World Bank7
Hydrocarbon sector investments
QP Business Plan: primary source
Available Plan in mid 2010: was somewhat outdated, but since then updated
The World Bank8
Hydrocarbons sector investments
mostly classified by products
Crude oil
North Field: existing (with embargo)
NGL & local gas
Refined products
Petrochemicals
Industrial cities
Other business units
The World Bank9
Hydrocarbons sector investments
Notice: QP treats capital expenditure by business units
Logical, but slightly inconvenient
So, left out things like “industrial cities” part
A minor conflict: refined products & petrochemicals in SNA are under “industry”
We also treat HC sector excluding refined products and petrochemicals (similar to IMF)
The World Bank10
Hydrocarbon sector investments
Funding in HC sector still remains somewhat unclear
Extracted whatever data available on:– QP equity– QP debt– Joint ventures
More information on capex and its funding may be desirable for the future
The World Bank11
Infrastructure investments
Assembled for the NDS report from project reports
Information on time phasing also provided
Gross investments (project costs)
Issues faced: still remain valid – Cost overruns– Under implementation
The World Bank12
Infrastructure investments: Projects
Metro/rail
Airport
Qatar-UAE causeway (known, but uncertain about timing etc)
Qatar-Bahrain causeway
Port
Power
Water
Wastewater
Roads
The World Bank13
Infrastructure investments
Known sources of information:
Qatari Diar (Metro/rail)
MEED report (airport)
Kahramaa budget (power, water)
Ashghal budget (waste water)
The World Bank14
Infrastructure investments
At a 2nd stage: added other selected agencies (excluding those reported by QP & subsidiaries)
Barwa
Qatar Diar (excluding metro/rail)
QNB
Qatalum
Under Qatar Foundation: Sidra & Education City
The World Bank15
Infrastructure investments
How does the picture look like?
HC investments
Non-HC investments
The World Bank16
Overall picture during 2009-2016 period
The World Bank17
Relative contributions to growth
The World Bank18
Infrastructure inv/non-HC ratio
The World Bank19
Growth impact of infra investment
The World Bank20
Emerging story
Towards the end of NDS: infrastructure investments are dwindling
Current expectations: based on current investment cycles
In fact, development strategy has to confront this growth challenge
Important implication: productivity change?
The World Bank21
Emerging story
Expectations about a substantial contribution of factor productivity growth towards 2014 – 2016
Realistic?
But, as has been pointed out, labor productivity is declining in recent years
The World Bank22
Emerging story
Some good news
Airport can generate more trade in goods and services
Aggressive financial, communications sectors similarly
However, traditional sectors may not move that fast
The World Bank23
Competitiveness
Petrochemicals: state of the art factories producing high quality products for foreign markets
Appears to have strong competition in the region: Saudi Arabia
The World Bank24
Emerging story
Another unclear aspect
Qatar World Cup commitments
Which projects were included in the World Cup bid?
Beyond 2016, up to 2022, Qatar will have major World Cup related projects
Stadium, other sports infrastructure
So, need to sort out any elements in the current investment package that may belong to the WC
The World Bank25
Emerging story
Undoubtedly, capital accumulation efforts would need to be sustained for future growth
Productivity gains are important: without that future welfare would be difficult to achieve
Complex policy issues here: exchange rate, incentives, employment/immigration, etc
The World Bank26
Additional notes
We experimented allowing for:
Under implementation of projects
Possible cost overruns
However, final results were given on gross basis
The World Bank27
Links to other parts of the model
Links to main model
Investment details feed into the expenditure side of the national accounts
Impacts also on BOP
Influence the fiscal accounts
Growth impacts can be determined (short- term impacts)