Sheikh Mohammed bin Abdulrahman bin Jassim Al Thani, the Qatar PM, reaffirmed that it was the proper decision for his country to purchase the London department store Harrods and that the country’s gas-driven economy is doing so well that there are no plans to enact income taxes.
In his first interview since taking office as head of state on March 17, 2023, Sheikh Mohammed bin Abdulrahman bin Jassim Al Thani said that Qatar wanted its USD 450 billion sovereign wealth fund to rank among the top five in the world.
In a rare televised meeting between the head of the Gulf state and the general public, the sheikh was questioned about the foreign purchases made by the Qatar Investment Authority.
In 2009, Qatar purchased a 17% stake in the German automaker Volkswagen, and then in 2010, it reportedly paid USD 1.7 billion to purchase Harrods. Volkswagen is still recovering from the scandal despite the coronavirus outbreak significantly impacting the venerable London retailer, which reported losses for 2020 and hundreds of job cuts.
The football team Paris Saint-Germain, which has spent hundreds of millions of euros on players like Kylian Mbappe and Lionel Messi but has yet to win a European championship, is owned by Qatar Investment Authority.
Al-Thani, an essential leader in the QIA, justified the purchases.
“Harrods was bought with the profits of our investment in Volkswagen for only one year, and its value is now five times higher. QIA invests internally and externally, and its mission is to fill a gap in the economy,” the PM stated further.
He also noted that foreign purchases are based on “purely commercial” judgements and compete with other sovereign funds.
Qatar has grown to be one of the wealthiest nations in the world thanks to its investments in natural gas during the 1990s.
Qatar maintained a budget surplus of about USD 25 billion in 2022 despite the global economic downturn due to rising natural gas prices.
“In just 30 years, we have experienced economic growth of 38 times,” claimed Al Thani.
To secure the future of the Gulf state, which has been ruled by the Al-Thani family for more than 150 years, he swore that the oil sector would become more and more locally controlled.
The prime minister declared, “We have made significant progress in (diversification), and Qatar intends to be one of the world’s five most significant sovereign funds.”
Most of the largest sovereign wealth funds today have over USD 1 trillion in assets.
Al-Thani declared there was no immediate plan for a value-added tax and that “income tax is not part of the government’s plans.”
If a VAT was implemented, he said it would only apply to a “limited segment” of commodities and would not “deduct anything from citizens’ income.”