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Qatari Prime Minister on Challenge of Maintaining Growth

This is a transcript of top stories presented by China's CCTV Business Channel as produced by CNBC Asia Pacific.

A big hello to our viewers across China. I'm Saijal Patel and you're watching "Asia Market Daily".

Gold futures hit yet another all-time high today — the second record result in as many sessions.

The precious metal is surging, on the back of concerns about the turmoil in the Middle East and North Africa, as well as Portugal's bailout request.

Frank Holmes, of U.S. Global Investors Inc, says any investment portfolio should consist of a 10 percent weighting in gold, with a mix of both the physical metal and non-hedged equities.

He predicts gold prices could double over the next five years, because gold is "under owned, and under loved".

(SOT)Frank Holmes, CEO & CIO of U.S. Global Investors, Inc:
Everyone's so caught up with what I like to call the fear trade. And the fear trade gets most of the coverage. Really, really what's key here is the love trade. And the love trade is where you have rising GDPs per capita and this is very key in what you see in China and you're seeing all through the Middle East etc., and you have this affinity for gold for religious giving.

Holmes says what happened earlier this year is what he calls a congestion in the love-trade, which was especially evident in India during the season of lights festival, or Deepavali.

The holiday, which just happened to coincide with the announcement of QE2, caused a spike in demand for gold.

But because investors were focusing on the U.S. Fed's second round of quantitative easing, that 'love trade', as he likes to put it, didn't get as much attention.

Meantime, the surge in commodities prices is boosting Qatar's economy.

The nation holds the title of the world's wealthiest country per capita, thanks to its massive natural gas reserves.

CNBC's Maria Bartiromo has more.

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The small Persian gulf state of Qatar has become the leading economy growing in the world today, with GDP in Qatar expected at 20 percent for 2011. Its growing wealth the result of having the third largest natural gas reserves in the world, giving Qataris the highest per capita. The leadership is using that wealth to diversify and invest globally. The country's Prime Minister, Sheikh Hamad wears three hats, as Prime Minister, Foreign Minister, and Head of the country's Sovereign Wealth Fund. He told me this week he's targeting some $35 billion to allocate in real estate, retail and financial services globally among other areas. This year Qatar broke ranks with some in the region, becoming the first to commit capital to the no-fly zone over Libya. I asked Sheikh Hamad about the unrest in the Middle East, his infrastructure build ahead of the World Cup, and investing those dollars today.

Maria Bartiromo, CNBC:
Let me ask you about the development and what's happening in Qatar today. You've been investing in infrastructure and development. You're looking forward to some major events happening in the country, the World Cup, of course, soccer tournament. You're also aiming to provide housing for a population projected to climb 50 percent, to 2.6 million by 2030. That's a huge jump in population. What is behind the surge, and tell me how you will manage investing new money in infrastructure and getting ready for the next ten years.

Sheikh Hamad Bin Jassim Bin Jabr al-Thani, Prime Minister of Qatar:
Well, I think for the infrastructure, I think between 5 and 7 year, we will finish all the infrastructure in Qatar. And there will be minimum $70 billion is already located for that. We have also the train coming to do the railway, and then... then, in whole Doha. So there is a lot of infrastructure going in Doha, but I hope within 7 year maximum, all this infrastructure will finish. That will allow us to accommodate the expansion in the population. The challenge is what to do after to keep the same growth — not the same growth, but to keep, to manage the growth of over five percent in the country. Because now it's not normal, it's around 20 percent. That cannot be managed, done forever. But I think 5 and 8 percent is manageable for Qatar for another 10 years from now. And this is where the challenge. Okay, within 3, 4 years, when we finish most of our work, we don't want the growth to collapse, we need a good growth to continue. And that's what we are working on it now, how to have the services, how to put the country on the map, to have a normal growth, but not 20, but not 3 or 4.

Maria Bartiromo:
And in the meantime, while you are investing in the country, you are investing the sovereign wealth fund outside of the country. I understand there is an objective to invest $35 billion outside of Qatar, is this right?

Sheikh Hamad:
Yes, we invested last year over $20 billion something. And this year, I think there will be around $30 billion to $35 billion to be invested in outside, if we have the right opportunity.

Maria Bartiromo:
Where else are you investing? The last time we spoke, we talked about your investment in Credit Suisse, we talked about your investment in Barclays, which you had cut, from the highs. Are you still warm to financial services in the United States?

Sheikh Hamad:
I think we did in Brazil Santander Brazil a few months ago, we bought 5 percent of it. And we bought Agricultural Bank of China, two point something percent. So, we are doing some financial when it is right, and we find the right opportunity. In Spain, last month, 6.5 Iberdrola, you know, we bought 6.5 percent of Iberdrola. I think there is... the retail also is important and good in the United States, and we are looking at it at the moment. And energy is also a place where we are looking at it in the United States.

Maria Bartiromo:
In terms of energy, oil price is at $108 a barrel. Gas prices, well natural gas, of course, very different than crude oil. But do you think based on where oil is today that it makes sense, it's justified in terms of the supply demand dynamic?

Sheikh Hamad:
We have to be realistic between the supply and the demand. The supply is there, I think. There is an anxiety because of what happened in the Middle East at the moment. This is why we see the prices of Brent over $120 per barrel.

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That's the latest "Asia Market Daily". I'm Saijal Patel from CNBC, thanks for joining me.

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