April 1, 2023

Qatar Pushes for a Larger Role on the Global Stage

LONDON — At first glance the willingness of Al Jazeera, the satellite network owned and financed by Qatar, to pay in the neighborhood of $500 million for Current TV, Al Gore’s struggling channel, seems like a vanity project. And it may turn out that way.

But in recent years Qatar has developed what is one of the more energetic and sophisticated foreign investment strategies of the Gulf oil and gas producers. Al Jazeera’s expansion plan in the United States can be seen as part of its overall plan to put itself on the map and make itself heard globally.

The Qatari leadership want to propagate “a Qatari-sponsored narrative of events in the Middle East and elsewhere,” said Kristian Coates Ulrichsen, a Gulf analyst at Chatham House, a London research institute. “Being able to shape that narrative and how it is being seen in the U.S. is extremely important.”

When he overthrew his father in 1995, Qatar’s ruler, Hamad bin Khalifa al Thani, took control of what was a small and vulnerable country jutting out into the Gulf from the Arabian Peninsula. He has assiduously worked to change Qatar’s circumstances, most notably by bringing in partners like ExxonMobil and Royal Dutch Shell to build the liquefied natural gas installations needed to exploit Qatar’s enormous North Field.

As a result, Qatar, which had been a relatively small oil producer, is now the world’s dominant L.N.G. power with financial surpluses in the range of $30 billion to $40 billion a year, according to Rachel Ziemba, an analyst at Roubini Global Economics in London.

The oil and gas money has given the ruler and his key collaborator, Prime Minister Hamad bin Jassim al Thani, the means to transform the once sleepy capital, Doha, into a Dubai-like cityscape that has become a preferred location for international conferences like the recent COP 18 summit meeting and prestigious sports events like the 2022 World Cup in soccer.

Qatar is also now the world’s wealthiest country per capita. Income was close to $100,000 per person in 2011, according to the C.I.A. World Factbook.

Having so much money to spend has helped make the Qataris key global deal makers in both business and politics.

“The leadership of Qatar is probably the most dynamic and ambitious of any senior leadership in the Gulf,” Tarik Yousef, chief executive of Silatech, a Qatari nonprofit that helps young people in the Middle East set up businesses, said in an interview last year. “They not only have ambitions and drive, but they have phenomenal financial resources.”

That ambition and drive have been conspicuously in evidence of late. In a high-profile gambit involving mediation by Tony Blair, Britain’s former prime minister, Qatar helped force Glencore to increase its takeover bid last autumn for the miner Xstrata, in which Qatar’s sovereign wealth fund held a large stake, increasing the price of the multibillion-dollar deal 9 percent, said Jeff Largey, an analyst at Macquarie in London.

Despite being a tightly controlled monarchy, Qatar is the only Gulf country that has enthusiastically bought into the Arab Spring revolutionary movements that have roiled the Middle East over the past two years. Qatari aid was instrumental in toppling the Libyan dictator, Col. Muammar el-Qaddafi, and its leadership was early in calling for the departure of President Bashar al-Assad of Syria. Qatar has backed the government of President Mohamed Morsi of Egypt with promises of billions in investment, including money for an oil refinery near Cairo.

Some of these decisions, like investing in the Xstrata deal or Qatar’s supplying new capital to Britain’s Barclays bank during the financial crisis — a matter that is now under investigation in Britain — make good business sense. So does Qatar’s stake-building in major Western companies including Shell, the German construction giant Hochtief and Volkswagen. But they also help accentuate Qatar’s political clout. When buying large shareholdings “you are gaining access to a network. It’s almost a means of doing politics,” said a senior Western investment banker in the Gulf last year, who declined to be identified because it might affect his business.

Being the site of billions of dollars in investment by major oil companies including ExxonMobil, Shell and Total also enhances Qatar’s relevance, as do its L.N.G. contracts with countries like Japan and China. The Qataris are thinking “if you have many long-term partners around the world, you won’t be sacrificed in a time of need,” said Mr. Ulrichsen of Chatham House.

In this context, Al Jazeera’s plan to expand in the United States may be seen as another part of Qatar’s global outreach campaign, though Al Jazeera has changed its tactics from its early days.

Al Jazeera’s English channel, introduced in 2006, has helped at least partially change its image from that of a network used as a vehicle by Al Qaeda and hostile to the United States to that of a professionally run news channel that has won prominent U.S. journalism prizes, including George Foster Peabody and George Polk awards last year. The Polk prize came for coverage of unrest in Bahrain, another small Gulf emirate.

“The key question is whether this is to give Al Jazeera in English more exposure in its current relatively objective form or to buy a forum for sending more of a Qatari and Arab message to U.S. viewers,” said Anthony H. Cordesman, a Gulf security expert at the Center for Strategic and International Studies in Washington.

The English channel has struggled to find viewers in the United States. It reaches only 4.7 million homes and far fewer actual viewers. The deal for Current TV will multiply potential viewers almost tenfold. “This is intended to be a commercial venture,” said Stan Collender, a spokesman for the company. Al Jazeera made the purchase only after “several years of study,” he said.

Article source: http://www.nytimes.com/2013/01/07/business/global/07iht-jazeera07.html?partner=rss&emc=rss

Today’s Economist: Bruce Bartlett: Republicans Champion ‘Voluntary Taxes’


Bruce Bartlett held senior policy roles in the Reagan and George H.W. Bush administrations and served on the staffs of Representatives Jack Kemp and Ron Paul. He is the author of “The Benefit and the Burden: Tax Reform — Why We Need It and What It Will Take.”

The Republican-controlled House of Representatives took a break last week from doing nothing to pass a bill to facilitate voluntary taxation. Almost simultaneously, Mitt Romney released his final tax return for 2011, showing that he voluntarily overpaid his taxes by taking less of a deduction for his charitable contributions than he was permitted.

Today’s Economist

Perspectives from expert contributors.

The legislation was H.R. 6410, “The Buffett Rule Act of 2012.” Those not acquainted with the misleading titles often given to Congressional bills might at first glance think this one has something to do with raising taxes on the ultrawealthy.

Of course, Republicans would never actually raise taxes on the ultrawealthy; they think, or at least assert publicly, that the deficit results from too many poor people not paying taxes. But it would be very helpful to them to have a fig leaf that looks as if they had found a way of getting the rich to pay more. That is by encouraging them to voluntarily pay more, as Mr. Romney did.

Named for the billionaire Warren Buffett, what came to be known as the “Buffett rule” is a proposal by Democrats that all those with incomes of $1 million or more pay at least 30 percent of their income in federal income taxes.

Mr. Romney and his wife had an effective federal income tax rate of just 14 percent, including the voluntary overpayment, on incomes over $13 million in each of the years 2010 and 2011, the only ones for which they have released tax returns.

In April, Senate Republicans filibustered an effort by Democrats to enact a real Buffett rule. Thus there was no chance that Congress would actually legislate higher taxes on the wealthy this year. But apparently, House Republicans feel pressured by voters to respond to the low effective tax rates that many rich people pay, which contribute significantly to historically low federal revenues as a share of the gross domestic product and, hence, to the deficit and the debt.

Republicans recognize that the Buffett rule is politically popular. An April Gallup poll found that Americans favor the Buffett rule by 60 percent to 37 percent, an Ipsos/Reuters poll in March found people supporting it by 64 percent to 30 percent, and a February Associated Press/GfK poll found 65 percent in favor of the Buffett rule and only 26 percent opposed.

H.R. 6410, which was introduced on Sept. 14 and passed the House by voice vote on Sept. 19 with no hearings and just a few minutes of debate, would allow taxpayers to designate on their tax returns a contribution to the federal government, over and above their tax liability, for deficit reduction. Of course, the Treasury has had a fund since 1843 to accept gifts, so the new legislation doesn’t really do anything. So far this year, $7.6 million has been donated.

Representative Chris Van Hollen, Democrat of Maryland, characterized the Republican legislation as a “pretty please” bill. As he put it, “Pretty please, Warren Buffett, pretty please, Mitt Romney, won’t you help contribute a little bit more toward reducing our deficit?”

One could perhaps take the Republican proposal more seriously if it also required a statement on application forms for Social Security and Medicare that those qualified should consider voluntarily forgoing benefits to reduce the deficit. The forms that farmers use to apply for agricultural subsidies could suggest that they put deficit reduction ahead of their personal interest, and so on.

The political reality is that Republicans don’t really support taxation at any level. Of course, none will go on the record saying that they favor abolition of all taxation; they just support every single tax cut and oppose every single tax increase. I have not heard any Republican in recent years acknowledge that the deficit results in any way from lower revenues; rather, they say, the deficit is caused only by excessive spending on everything except the military. Implicitly, therefore, the only kind of taxation a Republican can support is voluntary taxation.

Extreme libertarians, such as the novelist Ayn Rand, have long held that this is the only legitimate form of taxation. As she wrote in a 1964 essay reprinted in her book “The Virtue of Selfishness”:

In a fully free society, taxation – or, to be exact, payment for government services – would be voluntary. Since the proper services of a government – the police, the armed forces, the law courts – are demonstrably needed by individual citizens and affect their interests directly, the citizens would (and should) be willing to pay for such services, as they pay for insurance.

As we know, the Republican vice-presidential nominee Paul D. Ryan has expressed admiration for Rand’s views, and many Republicans in Congress, influenced by the Tea Party movement, support abolition of important government programs along with more tax cuts for the rich.

Interestingly, there actually are instances of voluntary taxation. The New York Times reports that the mayor of Bogotá, Colombia, once asked his citizens to voluntarily pay more taxes and 63,000 of them did. The Times has also reported that cities now often ask tax-exempt organizations to make voluntary payments in lieu of taxes and are turning to parents groups to fill holes in school funding and to community groups to take over park maintenance and other tasks.

Other examples of voluntary methods of financing governmental services include the bond drives of World War II, lotteries, tontines and political campaign contributions. Public universities often solicit private funds to pay for new buildings or programs and remittances by migrants living abroad are a kind of private foreign aid. And of course private charities often engage in social welfare, as well as providing facilities like hospitals and museums (some of which are also provided by government).

While there is no doubt that there are creative methods by which local governments might be able to raise additional revenue and encourage the private sector to take over some of their responsibilities, there is little, if any, scope for this by the federal government. Too much of what it does falls into the category of pure public goods that government must provide, like national defense, or entitlement programs like Social Security and Medicare.

Realistically, voluntary taxation is not a viable alternative to broad-based taxes. Those who oppose raising taxes on the wealthy and are concerned about the number of people exempt from federal income taxes ought to consider a national sales tax, as every other major country has. As Alexander Hamilton explained in Federalist 21, one virtue of consumption taxes is that they are to some extent voluntary.

Article source: http://economix.blogs.nytimes.com/2012/09/25/republicans-champion-voluntary-taxes/?partner=rss&emc=rss