How embargo affects Qatar investment in Indonesia

The stream predicament in a Middle East following a cut in tactful family between Qatar and Arab countries including Saudi Arabia, Egypt, Bahrain, Yemen, United Arab Emirates, Libya and even a Maldives have turn a talks of a universe leaders.

The 9 countries indicted Qatar of aiding militant classification and carrying too tighten family with Iran.

The embargo imposed on Qatar has lifted concerns about a country’s mercantile condition and a impact on other countries. Qatar is a tiny yet abounding country, that according to IMF data, is a richest nation in a universe with per capita income of US$146,000, a utterly high compared to Indonesia’s  per capita income that is usually $10,700.

As a rich country, Qatar has a vast volume of investments abroad including Indonesia. How will a embargo impact a Indonesia’s investments if it lasts for a prolonged time?

This essay will plead a impact on Qatar’s investment and a financial complement fortitude in Indonesia, such as in financial institutions and, companies and Indonesia’s migrant workers.

Starting from a financial institution, generally in banking. Qatar by a state-owned Qatar National Bank (QNB) controls a 82.59 percent interest in Bank QNB Indonesia. The merger was done in 2011.

Based on a published 2016 Annual Report, by bank organisation formed on core capital, (Commercial Bank Bussiness Group – BUKU), QNB Indonesia is in a BUKU 2 group. It means with such a collateral category,  QNB Indonesia is not authorised to have unfamiliar collateral appearance bearing i.e. can usually work in Indonesia even yet a bank can control business activities in rupiah and unfamiliar currency.

The expansion of QNB Indonesia’s resources after being acquired by QNB was poignant and even perceived an idAA rating with Stable” opinion from Pefindo. The share of credit owned by QNB Indonesia is still tiny during around 1 percent; this is also in line with a share of third celebration fund.

While per a independence with other banks, QNB Indonesia is utterly active in a interbank income marketplace and a infancy of a purpose as a borrower. Although, a favoured is not too poignant since a bank’s collateral is utterly good.

Furthermore, from a corporate aspect, Qatar is investing in one of Indonesia’s largest mobile providers.  Qatar telecommunication association Ooredoo (formerly Qatar Telcom) is a infancy shareholder of Indosat, with a 65 percent stake. The Indonesian supervision has a 14.3 percent interest and a open holding a remaining 20.7 percent). Based on a 2016 Financial Statements, Indosat, now called Indosat Ooredo, has short-term liabilities to banks around Rp 6 trillion, while long-term debt is around Rp 12.4 trillion. However, a ratio of debt to collateral (DER) stays fast to 1.67 percent, definition that so distant a association has no problem in profitable all a obligations.

Also, a ratio of collateral returned to a owners of a primogenitor is also tiny that is equal to 8.3 percent. So, this numbers means that a owners of a account does wish a sustainability of a company’s business in a prolonged run, not for short-term functions only.

How a predicament will impact Indonesian migrant workers. According to a information of a Agency for a Placement and Protection of Indonesian Migrant Workers (BNP2TKI), in 2016 there are 1,355 Indonesian workers in Qatar. The series declined from 16,616 people in 2011. Remittances from migrant workers in Qatar in 2016 amounted to US$74.7 million. Compared to other Middle Eastern countries, a numbers is usually next those in Saudi Arabia, UAE, and Jordan.  Foreign exchanges warranted by migrant workers in Qatar have contributed almost to a Indonesian financial system.

Reflecting on a information and facts, a embargo gifted by Qatar might not be too poignant in conversion a fortitude of Indonesia’s financial system. However, it stays to be heedful of deliberation that if a problems confronting Qatar continues, Indonesia could remove a intensity for larger investment in a future.

Furthermore, if tensions in a Middle East continue to expand might means countries with mercantile family with Qatar to be ostracized by Saudi Arabia, and other colleague’s countries and this positively will move poignant impact on Indonesian financial complement stability. Let’s wish it does not happen.


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