Political, Economic, and Social System of Qatar - Coursework Example

Qatar has become one of the fastest growing economies in the world. With its persistence economic growth and economic development, the country observed a phenomenal growth rate of 18.9 percent between the years of 1999 to the year of 2004. As a result, by the end of 2005, the GDP per capita in the country was around QAR 157,000 equivalent to USD 43,000 the GDP estimates released by the Qatar Central Bank. The financial and capital sectors of Qatar have been strengthened in the past couple of years (Fasano 41).

Particularly in the year of 1997, the Doha Securities Market (DSM) was established, increasing average rate of 16 percent a year through the culmination of 2001. And, the Central Bank has already raised the minimum capital adequacy ratio to 10 percent and successfully completed the liberalization of interest rates on deposits in the local currency, though a more recently created public development bank assists a long-term soft loans including the reserve requirements were simplified by setting the unremunerated cash reserves tantamount to 2.

75 percent of the total deposits including foreign deposits instead of 10 percent of total demand deposits which was previously in effect. Moreover, the Central Bank has also introduced a new short-term instrument named as the Qatar monetary rate (QMR) enhancing the process of liquidity management in the country. The interest rate attached to this facility works as a facility and earns interest at the QMR instead of forwarding to other countries as was previously the case. The Central Bank also tightened non-performing loan classification criteria and made it necessary for banks to appoint independent auditors assessing the current levels of provisioning.

Qatar’s financial sector is well equipped and capitalized as well. Currently, the financial sector is heavily supervised and remains largely profitable. However, there are around 15 banks; in which the Qatar National Bank, which is 50 percent owned by the Government, accounts for a substantial portion of the sector’s total assets.