+ A
A -
Tribune News Network
Doha
It is now a certainty that a global recession is under way and there is nothing governments can do to prevent it. Governments can, however, take steps to limit the humanitarian impact of the recession and ensure that economies can recover quickly once the pandemic subsides, Professor Jack Rossbach, assistant professor of Economics, Georgetown University in Qatar (GU-Q), has said.
“Countries must ensure that individuals at risk of losing their income streams are able to remain in their homes and do not lose access to utilities and other essentials. This protects vulnerable individuals while also encouraging compliance with emergency measures put in place to limit the spread of the virus,” he said.
“On the spillover front, a country must provide short-term debt relief to prevent a cascade of defaults, as this would eliminate any hope of a quick recovery. Qatar’s QR75 billion ($20.5 billion) relief package is targeted towards exactly these goals and shows that the government is responding quickly to the most immediate economic concerns,” said the QF-partner university Professor.
With the growing outbreak of coronavirus and businesses taking a hit, Qatar’s government has implemented a series of measures to protect its economy. A financial package to provide incentives amounting to QR75 billion ($23bn) has been injected to support the private business sector during the outbreak. Banks have been encouraged to postpone loan instalments from the private sector by extending grace periods to six months. Besides, food and medical goods, small and medium-sized businesses, and the tourism and logistics industries are exempted from custom duties for a period of six months.
In the longer term, the government will likely want to consider measures to ensure individuals stay employed so that businesses can quickly resume operations, as well as a broader economic stimulus package to ensure that consumer confidence and spending return to their previously high levels, the professor noted.
“This pandemic has brought with it an unprecedented economic crisis. Qatar’s initial steps, however, should instil confidence that the country will ultimately emerge from the pandemic relatively unscathed,” Professor Rossbach said.
He said while Qatar’s government tackles the impact coronavirus it having on its economy, the oil price war is another critical element that is keeping officials on their toes.
According to him, Qatar, along with the United Arab Emirates and Kuwait, has a deeper fiscal buffer than Saudi Arabia, and can afford oil price weakness for longer. Although crude oil price has slipped to around $24 a barrel, expansion projects of many of the region’s low-cost gas and oil projects will continue, and will be needed to meet the growing energy demands of the future in order to offset declines according to analysts at S&P Global Platts.
“The oil price war is a painful short-term development for Qatar and other oil producing nations. Fortunately, Qatar is in a good position to weather the short-term pain, as Qatar can survive low oil prices longer than either Saudi Arabia or Russia due to a low cost of production, a strong history of fiscal surpluses and healthy foreign reserves. I do not foresee the current oil price war resulting in any adjustments to Qatar’s national vision or its response to the pandemic,” Professor Rossbach said.
Doha
It is now a certainty that a global recession is under way and there is nothing governments can do to prevent it. Governments can, however, take steps to limit the humanitarian impact of the recession and ensure that economies can recover quickly once the pandemic subsides, Professor Jack Rossbach, assistant professor of Economics, Georgetown University in Qatar (GU-Q), has said.
“Countries must ensure that individuals at risk of losing their income streams are able to remain in their homes and do not lose access to utilities and other essentials. This protects vulnerable individuals while also encouraging compliance with emergency measures put in place to limit the spread of the virus,” he said.
“On the spillover front, a country must provide short-term debt relief to prevent a cascade of defaults, as this would eliminate any hope of a quick recovery. Qatar’s QR75 billion ($20.5 billion) relief package is targeted towards exactly these goals and shows that the government is responding quickly to the most immediate economic concerns,” said the QF-partner university Professor.
With the growing outbreak of coronavirus and businesses taking a hit, Qatar’s government has implemented a series of measures to protect its economy. A financial package to provide incentives amounting to QR75 billion ($23bn) has been injected to support the private business sector during the outbreak. Banks have been encouraged to postpone loan instalments from the private sector by extending grace periods to six months. Besides, food and medical goods, small and medium-sized businesses, and the tourism and logistics industries are exempted from custom duties for a period of six months.
In the longer term, the government will likely want to consider measures to ensure individuals stay employed so that businesses can quickly resume operations, as well as a broader economic stimulus package to ensure that consumer confidence and spending return to their previously high levels, the professor noted.
“This pandemic has brought with it an unprecedented economic crisis. Qatar’s initial steps, however, should instil confidence that the country will ultimately emerge from the pandemic relatively unscathed,” Professor Rossbach said.
He said while Qatar’s government tackles the impact coronavirus it having on its economy, the oil price war is another critical element that is keeping officials on their toes.
According to him, Qatar, along with the United Arab Emirates and Kuwait, has a deeper fiscal buffer than Saudi Arabia, and can afford oil price weakness for longer. Although crude oil price has slipped to around $24 a barrel, expansion projects of many of the region’s low-cost gas and oil projects will continue, and will be needed to meet the growing energy demands of the future in order to offset declines according to analysts at S&P Global Platts.
“The oil price war is a painful short-term development for Qatar and other oil producing nations. Fortunately, Qatar is in a good position to weather the short-term pain, as Qatar can survive low oil prices longer than either Saudi Arabia or Russia due to a low cost of production, a strong history of fiscal surpluses and healthy foreign reserves. I do not foresee the current oil price war resulting in any adjustments to Qatar’s national vision or its response to the pandemic,” Professor Rossbach said.
