Qatar

Arab countries like other developing countries have embarked since the early 1990s on financial sector reforms.

Financial reforms have already brought about significant improvement in monetary and credit aggregates in . Financial sector reform has certainly had a noticeable impact on the cost of intermediation: real interest rates and Gross interest margins.

However, there is scope for even more improvements over the next years as competition enhancing measures and administrative costs reduction interventions are adopted.

is a small peninsula located on the West coast of the Persian Gulf, between , and the Plain Arab Emirates.

It holds nearly 300 billion cubic meters of gas reserve with North Field and nearly 15,2 billion oil barrils. The emirate considerably developed its gas exploitations for becoming the first Liquefied Natural gas exporter (LNG)!  In parallel, the country obtained a significant petrochemical   industry (plastic, aluminium...)! 

In the last decade; , has made significant progress in building a modern financial sector. It has embarked on economic and financial reforms in recognition of economic growth and stability that are often associated with increasing financial deepening and in response to the need to quickly adopt to rapid globalization.

For the most part, the financial and monetary authorities have implemented financial sector liberalization programs. These programs have included deregulating, interest rates liberalization and the gradual opening up of the financial sector for foreign participation, privatization of banks and other financial institutions and increasing competition.

The implementation of financial reforms has already caused major improvements in monetary and credit aggregates in the banking sector in . Very few Arab central banks have issued guiding principles for bank management standards even fewer have regulated and supervised non-banking financial institutions such as Islamic Banking,

However, there appears to be plenty of room for even more improvements over the next few years the scope for structural improvements is even greater. In Arab countries, the banking sector is still mainly catering to the public sector. The existence of inherent biases against the private sector attaining banking credit should be amended. There is a need for the monetary authorities of this country to strengthen and promote private sector activities and ensure that the public sector does not crowd it out.

These challenges and reforms need to go hand in hand with structural reforms, including privatization, deregulation and liberalization, as well as sustained efforts to maintain financial stability through prudent fiscal and monetary policies and prudential supervision measures. There is also an urgent need to establish a central risk bureau not only in but in all Arab countries.

Finally, Arab stock markets remain largely underdeveloped, small and face various constraints. For the most part, corporate securities and secondary markets for government bonds have not emerged as significant vehicles for linking money and capital markets or as an engine for extending financial sector depth. Those can be revitalized by an acceleration of the privatization drive; supporting the structural changes in the banking sector in the period ahead and empowering the financial sector to effectively compete in the global economy.

                                                    Sublata