Qatar’s foreign investment plans brought into question
A foreign investment roadblock is in danger of affecting Qatar’s economic state. The small but gas-rich nation now has a potential $100 billion U.S. investment to contend with, which comes amid the country’s questionable 7.5% stake in European aero-space. It is becoming increasingly clear that Qatar’s domestic ambitions are far more concentrated than its spending overseas. The nation’s preferences for high-profile assets are now becoming a perilous practice for its economy.
The country is currently positioned to become the richest nation on the globe, based on per capita GDP figures, and its calm political state has yielded the government with more than enough funds to invest overseas. Qatar’s Investment Authority is currently in possession of over $100 billion in assets. This situation is further aided by the fact that the small nation now has a projected $20 billion worth of foreign reserves. These figures however impressive still seem minor when contrasted against the formidable funds of countries like China and Abu Dhabi.
If the Investment Authority’s figures prove true, more than 20% of the nation’s assets then consist of a few purchases that have been made in only the past two years. Qatar has used more than $20 billion in investments into the German automotive industry, which is now struggling. In addition to a few large-sized questionable investments, the nation has offered a lifeline to the perpetually ailing Greek economy. All of this is added to by Qatar’s recent purchase of a few European football teams and a line of Britain’s prestigious department stores.
While this extravagant spending might be easy to understand at surface value, the high-profile investment seem just a little drastic, if put against Qatar’s global standings. The nation’s Investment Authority does a strong full-disclosure streak when it comes to its domestic investments, yet its foreign investments are not nearly as transparent. Whereas the investments and spending made by other flourishing nations like China, Abu Dhabi and Norway are justified by meticulous breakdowns and consideration; Qatar’s indulgent investment strategies seem to be little more than risky and mindless overspending.
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