Doha, 10 December 2007

HE YOUSEF HUSSAIN KAMAL
MINISTER OF FINANCE, STATE OF QATAR

Euromoney Middle East Debt Markets Conference, Four Seasons Hotel

Keynote speech

Your Excellencies, delegates, ladies and gentlemen.

It is my pleasure to welcome you to Doha and to the Euromoney Middle East Debt Conference. We are delighted that Euromoney has chosen Qatar in which to launch this conference in the Middle East.

Certainly I can say that it is long overdue. Increasing attention is now being paid to the Middle East in terms of both investment flows and market development.

Over the course of the day you will no doubt hear much about the impact of the global ‘credit crunch’ and its impact on the availability and cost of debt.

There appears to be a general view that the energy rich Gulf states, such as Qatar, are insulated from this problem. We are, of course, not totally immune.

Such huge shifts in financial sentiment have an impact around the world. Those trying to raise project finance capital, issue bonds or finance acquisitions in Qatar and the wider region will of course be affected by it.

The cost of borrowing is therefore climbing once again, having reached a low in the summer, and lenders are growing more cautious about the terms of their deals.

For all this, the demand from the nations of the GCC for capital is as strong as ever.

Over the course of 2006, the size of the debt market in the region almost trebled. One international bank estimated that the MENA region alone accounted for an estimated $91bn in debt finance - $68bn of which came from bank lending.

Qatar alone has a pipeline of projects worth over $70bn planned or under bidding, with a further $72bn worth of projects underway or just completed.

Of these, around 50% are will be project financed, with roughly $55bn coming through syndications and $15bn raised in bonds.

Indeed, the growth in the bond market has been one of the key features of the past year. In 2006, companies in the GCC issued $18bn worth of bonds – a sum that rating agency Moody’s expects to almost double over the course of this year.

The sectors driving these issues are energy, financial institutions, real estate and telecommunications.

Deals such as QNB’s $1.8bn loan and Qtel’s $5bn of loans raised in the first quarter of this year were both oversubscribed at competitive rates, which demonstrated a positive start to the year.

We have also seen the first rated corporate sukuk listed in London and the announcement of a securitisation issue this year, demonstrating the continued progress Qatar is making in debt capital markets.

In the latter half of the year, though more challenging in the wake of the credit crunch, we have also seen considerable momentum for quality names such as the QIA’s debut $3bn loan syndication

Another driver for the debt market has been the growing interest in Shari’ a compliant products. One leading bank predicts that the market for sukuks could be worth as much as $100bn by 2010. This year, the bank predicts that the value of Islamic bonds in the Gulf will more than double to $35bn.

But the Shari’ a compliant market has not been immune from the credit crunch either, and companies operating in that area have also had to accept higher borrowing costs.

It is clear, therefore, that what is essential to institutions and companies in the Gulf – given the huge ongoing capital requirements of the region – is that our reputation as reliable borrowers has to be second to none.

One observation I would make is that while the global debt capital market have caught pneumonia, the regional markets have displayed few symptoms of catching a cold. Recent trends show that GCC countries – and Qatar in particular – remain strongly attractive to investors and we welcome the continued support shown to well structured, high credit quality transactions.

Our aim is to deepen and widen the use of debt capital markets by encouraging innovation as well as scale in Qatar. We hope that with the increased attention Qatar has attracted through the QFC and conferences such as this, you are able to gauge for yourselves the need and opportunity to provide innovation and access to both new investors to Qatar and new opportunities here.

As more and more of the world’s most respected financial institutions and professional establish themselves in the QFC, nobody today doubts that our initiative to build a world class financial centre has been a success.

We have created for these institutions one of the most favourable environments in the world. The opportunities made possible by our energy wealth are only part of the story. To the advantage of being the world’s Number One exporter of liquid natural gas, we have added:

• A financial centre tailored to the needs of the regional and global financial community
• A regulatory authority and a court system with the independence and transparency to give them confidence.
• A favourable tax environment
• A modern and rapidly expanding infrastructure designed to make the working life of professionals easier and more efficient
• A programme of down streaming and diversification opening many new opportunities
• The encouragement of a whole range of financial instruments.

Qatar will soon be further improving its regulatory environment with the integration of the QFC Regulatory Authority, the Qatar Financial Markets Authority, and the regulatory functions of the Qatar Central Bank into a new single regulatory authority. With one authority we believe we will be able to achieve greater efficiency and higher standards of regulation. We also feel that Qatar can be a viable financial centre only if the business climate in its entirety is modernised and placed under an overall authority. The integrated regulator will be independent of the QCB and the QFC. We are calling it the Qatar Financial Regulatory Authority (QFRA).

I am delighted that you are here. I wish you a successful conference. And to those visiting Qatar, I wish you an enjoyable stay – and profitable business.