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Viva Italia: Qatar finds lucrative business partner

By Francesca Astorri ROME: For a booming Qatari economy trying to spread its investment footprint across borders, Italy offers lucrative opportunites.

In 2009, Qatar's investments in Italy increased by 619 percent, thanks to supplies of Liquefied Natural Gas (LNG), the mainstay of the Qatari economy. According to the Italian Trade Commission, in the first 6 months of 2010, Italy imported LNG worth 619m euros from Qatar. The single biggest Qatari investment abroad is in Italy -- the 1.2bn euro LNG pipeline in the Adriatic Sea, built by Qatar Petroleum and the Italian Edison company.

But oil and gas is not the only sector in which Qatar is an interesting commercial partner of the European industrial power.

Italy also imports chemical products and jewellery from Qatar.

Last year, Qatar's chemical exports to Italy increased by 21 percent, while jewellery exports registered a rise of over 70 percent.

Qatar's private sector also seems interested in investing in Italy. Qatar Investment Authority bought one of the most prestigious hotels in Milan, the Excelsior Hotel Gallia, for 100m euros. Qatar's investment expansion in the Italian market is very recent.

Qatari businessmen would invest even more in the tourism and industrial sectors, but no response seems forthcoming from Italy, sources told The Peninsula.

Experts say that Qatar has tried to invest in Venice, but there is some kind of resistance from Italian economic and political lobbies which are hard to penetrate and are not open to competition.

The Italian Confindustria has said many times that the federation would have visited Doha, but it never happened. Qatar has also promoted the construction of The Italian Industrial Park in Qatar, but there was no response from Italy.

In spite of obstacles like the lack of attention from Italy, its formidable lobbies, the onerous fiscal system, the bureaucratic tangle and numerous laws, the Qatari private sector spans a wide horizon and is expanding all over Europe.

Barwa Real Estate bought 7 hotels in Belgium and Switzerland, an investment worth $454m, and the International Convention Center in Paris for $522m.

Qatar's exports to Italy worth about $60bn

The European sectors in which the Qatari private sector is most interested in investing are real estate, automobiles and finance. Sainsbury supermarkets, Barclays bank, Volkswagen-Porsche, Songbird estate, Harrods, Vinci Group were bought or partially acquired by Qatari Diar or Qatar Investment Authority . And these are only some examples of Qatari investments in Italian and European markets.

Qatar has exports worth around $60bn which are increasing every year, but the Italian market is not very competitive with restrictive policies toward non-EU countries, high taxes and bureaucratic red-tape.

These are some of the reasons why Italian exports to Qatar decreased by over 66 percent in 2010, as SACE Export Credit Agency data say. At the same time, Italian imports from Qatar increased by 209 percent just in 2010.

Qatar in fact has built a series of fiscal facilities, investment incentives, exemptions, in order to turn into an attractive market for foreign investments.

© The Peninsula 2011