Feb 05 2012
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What USD250M can buy
Nobody can complain that Qatar does not look after its citizens. Or that its rulers are not leading the once-backwater of the region to unprecedented growth, almost defying the global economic downward trend.
As a recent IMF report noted, Qatar's economy has grown sixfold in the past ten years alone, and the country is awash with cash, trade surpluses and foreign reserves.
The country has raised its profile internationally, brokered peace in the region and invested in topnotch education and healthcare for its citizens.
In addition, the Qatari National Development Strategy for 2011-16 estimates that around USD225 - billion will be invested during 2011-16. Roughly half of this investment will be in the non-oil and gas sector. The NDS 2011-16 estimates that the government will provide USD95 billion, or 42% of total investment laying the foundations for the private sector to make up the remaining USD130-billion.
This huge development and investment outlay will generate jobs, stimulate the private sector and attract talent only money and opportunities can buy.
Still, the USD250 million it paid for the great Paul Cezanne's The Card Players painting jars the mind.
It looks out of place, an indulgence - something best left to private art collectors and self-made billionaires - not by sovereign rulers of a country. The painting which Qatar reportedly paid was much higher than its market value, and previously owned by Greek shipping magnate George Embricos.
The previous highest record for a painting was Jackson Pollock's No. 5 was USD140-million. Art market analysts say Qatar has now raised the bar for art collection - but for what reason? It's not clear.
Sure, we all know the grand plan: Qatar is in the midst of establishing one of the world's most impressive art collections, which, in turn, is part of the country's grand effort to raise its profile at the global stage.
The refurbished Qatar National Museum that will re-open in 2014 will no doubt be a sight to behold.
And it will have just the effect Qatar is looking for: in the mind of the international community, The Card Players will figuratively rub shoulders with images of Qatar hosting the 2022 FIFA World Cup and the fleet of giant LNG ships that feed hungry Asian markets.
It will be seen as an economic giant and a cultural and sporting icon - a progressive, modern nation in the midst of the toughest neighbourhood in the world.
We all get that.
Still, spending record amount on a single piece of art is not the domain of sovereign governments. So, Alifarabia.com has tried to examine the enormity of the vast cheque that Qatar cut for The Card Players.
Here's a short list of what USD250 million means in context of the Qatari and the wider Middle East economy:
1. Qatar's special drawing rights (SDR) in the IMF stands at SDR 263.8 million, or around USD170 million, significantly less than what it paid for the painting.
2. The USD250-million could have been used by the government to hand out USD1,041 to each of its 240,000 indigenous citizens.
It did even better last year, spending USD1.6 billion on salary increases and bonuses. USD250million would have 16% of that salary bill.
3. USD250 million is 3.8% of Qatar Petroleum's 2010-14 USD6.6 billion investment plan.
4. Around 22,725 barrels of Qatari oil - at current Brent prices of USD110 - would generate USD250million. That's 15% of Qatar's daily domestic oil consumption.
5. The 22,725 barrels of Qatari crude also made up 2.8% of its daily oil production of 809,000 in 2011.
6. The USD250-million is 8% of the USD3.2-billion fifth LNG train being developed by the Qatari Government. The train will produce 1.3million tonnes of ammonia and 1.3 million tonnes of urea each year. A sixth train, which will produce a further 1.3m tonnes of urea, is also under construction with completion expected in 2012 with estimated cost of USD610-million.
7. USD250-million is 0.34% of Qatar's broad money supply in 2010, or half a per cent of its budget surplus of USD45-billion for 2010.
8. USD250 million was the size of the loan given by World Bank to Jordan to help manage the global economic downturn this January.
9. Qatar Steel signed a USD250 million loan with International Bank of Qatar and UAE's Union National Bank also in January.
10. Norway's IM Skaugen is looking at a USD250-million LNG terminal in Bahrain.
11. USD250 million could buy Qatar Airways three of the 88 aircraft it ordered from Airbus last November.
13. USD250 million was 6.5% of the combined USD 3.8-billion of net profit earned by local Qatari banks in 2010.
15. USD250 million is 1.36% of the country's central bank reserves of USD18.352 billion in 2009, according to the IMF.
© Copyright Zawya. All Rights Reserved.
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