Qatar, a major investor in US and European assets, is worried that haphazard attempts by countries to shore up their economies could weaken the dollar and the euro, its prime minister said.
“What should happen is we should have a full package with a full strategy to solve the problems,” Sheikh Hamad bin Jassim al-Thani, who also heads the country’s sovereign wealth fund, Qatar Investment Authority (QIA), told US financial broadcaster CNBC in an interview.
This month the US Federal Reserve announced a programme of heavy purchases of mortgage-backed securities in an effort to boost employment, but the US government has so far failed to reassure financial markets that it has an effective plan to cut its budget deficit and boost economic growth.
The European Central Bank has also said it will buy bonds to protect economies from the euro zone debt crisis, but governments of weak countries such as Greece and Spain have not persuaded investors their debts can be cut to safe levels.
Sheikh Hamad said the central banks were right to act to prevent worse crises, but added: “With more printing money, without having a strategy, I believe the value of the money will go down very soon.”
He did not give details of the economic measures which he believed Western countries should be taking, but said the risk of further volatility in markets was making investors such as Qatar cautious. Analysts have estimated the size of Qatar’s sovereign wealth fund at around $100 billion.
“There are some questions with no answer up to now,” he told CNBC.
However, Sheikh Hamad added that Qatar would retain holdings of strategic stocks and buy when prices dropped, and that it would continue to make new investments in promising assets.
He said he was optimistic about the longer-term future of the banking industry, since better regulation and capital-raising would strengthen banks after some years. He noted that QIA had a strategic stake in Credit Suisse, and owned about 1 percent of Bank of America and 5 percent of Santander Brasil among other banks.
The country has bought more than $5 billion or $6 billion of real estate assets over the last four to five months, mostly in the US and Europe, Sheikh Hamad said. “If there is some good opportunity, why not,” he said of investing in crisis-hit Europe.