Qatari Prime Minister on Growth, Libya and Emerging Markets

Qatar hosts its first Business & Investment Forumin New York. The country is planning to invest over $35 billion outside of Qatar this year. Sheikh Hamad bin Jassim bin Jabr Al-Thani, Prime Minister and Minister of Foreign Affairs of Qatar sat down with Maria Bartiromo in a CNBC Exclusive.

Qatari Prime Minister Sheikh Hamad
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Qatari Prime Minister Sheikh Hamad

Here's the transcript of the interview.

MARIA BARTIROMO: You are conducting the Qatar Investment Forum in New York this week. This is the first time you're doing it in New York. What are you trying to accomplish?

SHEIKH HAMAD: We usually do it in London, Paris and in Europe. And a lot of business people from this part of the world, they say, "We need it to be done in New York." Actually, they say that Washington. And for me, Washington is a place where I like to go and work and live. So I said, "Okay, we do it in America, but we do it in New York." We have a lot of people attending this, as you know. There will be hundreds of people. And we stop receiving people, because there is no place to have everybody. I think this could be a good model to show them what we are trying to do, what is our interest. We know what we can have from the people here, any new ideas about business in this part of the world.

For us, it's a new opportunity. We know most of the people here, but it's good to have a dialogue with them. Also, we have over 250 businessmen from Qatar and from the region which, it's healthy to have both of these people talk to each other, because I'm sure they will come with the good ideas, which will help, you know, the two sides.

MARIA BARTIROMO: The influence of Qatar and the impact is so substantial. It's hard for people to understand how substantial and powerful the country is, being the size that it is. So let me talk to you a bit about your priority. You are wearing three hats; Prime Minutes, Foreign Minister, and the Investment Portfolio Head. What are your priorities, Sheikh Hamad?

SHEIKH HAMAD: The priority is Qatar. And Qatar, it means that we need to work in different angles and different aspects. So, we are trying to first of all to work from inside to outside. And inside, that mean I'm talking about our education, about our healthcare, about our prosperity of our people, help use the wealth, the extra wealth which we have from the oil and gas to protect our next generation.

That mean we should invest it right. We are doing enormous work in infrastructure in Qatar. So we think that first of all, we need to start from inside Qatar. And if we have the strong base in Qatar from all the aspects, then we have-- we are thinking to go outside.

Business and Investment in Qatar Forum, New York
Business and Investment in Qatar Forum, New York

When we're talking about the outside, investment, political, when you talk about Libya, we are in Libya, you know, thinking that what happened to the Libyan people, they don't deserve it. For us, a small country, we want to show an Arab country a model that we can join the international community to help the people of Libya.

I'm sure not all our brothers are doing the same, but if part of them do so, that's good. So I think we need to show the Libyan people they are not alone, that there is an Arab state is helping in the coalition. If we are talking about the foreign policy, we are trying to reach all the hot spots in our region, and try to help them as maximum as we can, either in Darfur or in Yemen, or in Libya, or in Palestine.

So, this is part of our vision for Qatar and His Highness, the Emir vision for Qatar. So it's difficult, because that mean we need to make a lot of work. Because for us, a small country, a rich country, we can invest, to put Qatar in the map in all aspects.

MARIA BARTIROMO: Qatar has emerged as a major international player in this Libya crisis. The country was the first to join the alliance, commit capital to the no-fly zone. Was that tough initially going against, or breaking ranks with the GCC?

SHEIKH HAMAD: Well, it is tough. But you have to be-- first convinced that what you are doing is right. And we are not-- shy, if it's not correct, to correct it. We think we have to take these measurements, even if we are small country. But this measurement, first of all, we are helping other wealthy Arab nation. They do not have the prosperity, which they should have, or they should deserve in Libya.

So, that's one of the things. The second things, we would like to see the Middle East with a model, model that we can work as one unity, the Middle East, stability of the Middle East. Most of the problem in the Middle East is because of the economy, because of a lot of people doesn't have jobs. So we believe that we would like to help other in the peacetime, or in the wartime, according to our capacity.

MARIA BARTIROMO: What are your hopes then, for Libya? Is the best-case scenario for Gaddafi to go?

SHEIKH HAMAD: I think he should go. I think he should take this decision and I said this a few weeks ago. He should take this brave decision to leave, and to leave the people of Libya decide what they want to do in their country.

MARIA BARTIROMO: We're seeing an influx of people and wealth as a result of the crisis in Libya, people moving to London, people moving to Dubai, other areas of the Mid-East. Are you seeing an influx similar to that in Qatar? What do you think the implications are for the GCC in terms of this influx of people and new money coming from Libya and other areas?

SHEIKH HAMAD: We see a lot of movement in Qatar coming from outside. We saw it from Egypt, some of the big companies, they start moving to Qatar. Of course, they move to Dubai or other places. But we can see this. Unfortunately, we have the regulation, what to come, what not to come in Qatar, because we need to be part of the international you know, monetary way of fund, how it come.

We are little bit careful in that aspect. But we could see there, there is a flow of people, talented people, flow of companies, money in Doha, you've been there. If you go to the financial center now, or to Qatar, you will see that things has changed, and it's more people working there. It's good for the economy of Qatar.

MARIA BARTIROMO: 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: I think for the infrastructure, I think between five and seven year, we will finish all the infrastructure in Qatar. There will be minimum $70 billion is already located for that. Which, it is under our ability, it's manageable in term of financial side. In term of the work side, that's disturbing the people, because there's a lot of roads blockage in Qatar, there's a lot of work going on.

We have also the train coming, to do the railway, then in whole Doha. So there is a lot of infrastructure going in Doha, but I hope within seven year maximum, all this infrastructure will finish. That will allow us to accommodate the expansion in the population. The problem is the quality of population, that's what the next challenge will come.

Right now, we have a lot of people coming as a labor force. And that labor force will disappear or be less when the work is finished. The challenge is what to do after to keep the same growth, not the same growth, but to manage the growth of over five percent in the country. Because now it's not normal, it's around 20 percent.

I think five and eight percent is manageable for Qatar for another ten years from now because of what we need to do in the country. So I'm not worried from the growing in the population more than the quality of that population, how it is. Is it population of producing work, what sort of work, is it financial, is it only manufacturing? Is it for oil and gas, or is it for retail? You know, that's where we have to make our mind and to strive to make the balance.


MARIA BARTIROMO: The growth rate of Qatar is extraordinary. Twenty percent in 2011. The fastest growth rate in the world, today. What's driving that growth?

Qatari Prime Minister Sheikh Hamad
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Qatari Prime Minister Sheikh Hamad

SHEIKH HAMAD: Part of it because our gas production has been 77 million ton reached last year. Second things, we have a lot of project related to oil and gas, which also becomes a lot. There is a lot of construction, there is a lot construction going in the country all in the same time.

I wish that we can expand it and stretch it for ten or 15 years and do it and to have normal growth, ten percent. Ten percent is not normal, but ten percent is good growth. And this is where the challenge. Okay, within three, four 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 in 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 three or four.

MARIA BARTIROMO: 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 invest last year over $20 billion something. 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: So let me ask you about allocating that money. You have started a big project in Washington D.C. This is the Qatari Diar Real Estate $700 million development. Why that area, and is this a prelude to more investment in the United States in real estate? Talk to us about this big real estate deal you just did.

"There is a good story in Brazil and Latin America. For us, we would like to expand there, and to own a bank in there, or own part of the bank." -Prime Minister, Qatar, Sheikh Hamad

SHEIKH HAMAD: Washington, you know, it's a city where it is not affected a lot in the real estate especially in offices, in housing, because it's the capital of the United States. And there is a lot of agencies in Washington. So, there is demand in Washington.

I think for United States, we are looking for properties, commercial properties in the United States, because we think in some cities, not every all the cities, because we think it's the right moment to move to that. So we are doing with the moment and we are checking and discussing some deals in United States.

Real estate is always stable investment if you bite in the right time. Unfortunately, nobody knows when is the right time. But maybe now the right time to talk with the banks, which they have a lot of these commercial properties which they want to get rid of, if they want cash. Then sometimes we might find the right deal to do.

MARIA BARTIROMO: So you are looking for commercial real estate in the United States


MARIA BARTIROMO: Are there specific measures that you're looking for in terms of choosing what properties to invest in?

SHEIKH HAMAD: Of course, quality, position, where it is, the good tenant. That's the main elements.

MARIA BARTIROMO: Very interesting. 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 Brazilian bank, Banco Santander Brasil a few months ago, we bought five percent of it. And we bought, Agricultural Bank of China, about two-point percent. So, we are doing some financial when it is right, and we find the right opportunity. It doesn't mean that we are only doing financial, but we are also doing other transactions.

MARIA BARTIROMO: What's attractive about Santander and Brazil to you?

SHEIKH HAMAD: We are interested in the growth in Brazil. There is a good story in Brazil and Latin America. For us, we would like to expand there, and to own a bank in there, or own part of the bank. It could be our eyes for other opportunities. In term of it's good investment first of all, and at the same time, it's an investment where it could lead it to other investment, because the bank is like the you know, the filtration (SIC) of everybody business.

MARIA BARTIROMO: So that's what's attractive to you about financial services?


MARIA BARTIROMO: Because it's sort of the crux of growth in the economy…

SHEIKH HAMAD: Exactly, exactly.

MARIA BARTIROMO: The United States financial services, it doesn't sound like the opportunity is now?

SHEIKH HAMAD: We are doing some, we are doing some. We own some financial, not a big space, but we own in the banks of the United States some stakes.

MARIA BARTIROMO: Are there other areas in the U.S. that you find compelling right now away from real estate, away from financial services?

SHEIKH HAMAD: I think there is the retail also is important and good in the United States, and we are looking at it at the moment. Energy is also a place where we are looking at it in the United States.

Business and Investment in Qatar Forum, New York
Business and Investment in Qatar Forum, New York

MARIA BARTIROMO: Energy in terms of what? Let's talk about energy for a moment. In terms of energy, oil prices 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 the it makes sense, it's justified in terms of the supply demand dynamic?

SHEIKH HAMAD: I think the market is-- drive now by anxiety, part of it. And I believe that the energy price, 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 over $120 per barrel.

But I always think $100 is the right price. I know always we said, you know, when it is $70, we said between $70 and $80 is a good price, and when it is $90, we say between $80 and $90 is a good price. That's part of the policy. But I believe the oil price and the gas price should be not too low and not too high. First of all, because it's the engine of the economy of the world.

But also if you need more supply in the future, you need to pay the right price so we can produce more, we can explore more, because there is a lot of investment in energy.

Ten years ago, there was almost no investment in oil and gas, because the prices doesn't let, if the prices of the oil is $17 and $15, and at least $7, you don't need to invest in oil. And this is the shortcoming because of that prices. So it's very important to have always prices which could let us invest, and let you have it in the right price.

MARIA BARTIROMO: In terms of gas, LNG you're seeing new demand coming from Japan on the heels of the disaster there. Talk to us about the amazing, insatiable demand in Asia, first off. And whether or not you've seen a change or an incredible as a result of what has gone on in Japan.

SHEIKH HAMAD: You know, in Asia, we sell our gas three or four time higher than what we sell it in United States. But that is important for us. But our natural market is Asia, frankly speaking. And yes the demand surge, and now with are trying to help our friends in Japan. We supply them with more gas, more LNG, because we think that they need that.

MARIA BARTIROMO: Russia has become increasingly a competitor on this, LNG. How do you see the playing field changing in terms of the supply?

SHEIKH HAMAD: We think the market can absorb all of us, Russia and Qatar. And for us, we have a very good understanding with Russia, and I think that the market need both of us. Very important not to make, we are not trying to compete each others, but we are trying to complement each others, in my opinion.