Qatar, an emirate that is slightly smaller in land size than Connecticut, has leapt onto the global economic scene with its vast natural resources, wealth, and relative stability. Ruled by Emir Hamad bin Khalifa Al Thani since 1996, it's one of the fastest growing economies in the world, growing by 19.4% in 2010 alone.
Executives from several of Qatar’s major corporations as well as government leaders will convene at the Waldorf Astoria in New York City April 6-7, 2011, for the Business & Investment in Qatar Forum to discuss development and investment opportunities in the fast-growing country.
So, what should you know about Qatar, and what are some of its key economic characteristics? Click ahead for an economic tour.
By Paul Toscano
Posted 5 April 2011
Doha, the capital city of Qatar, is home to approximately 80% of the country’s population. Qatar’s largest energy companies, including Qatar Petroleum, Qatargas and RasGas are headquartered in Doha.
In recent years, due to a “modernization” program by Sheikh Hamad bin Khalifa Al Thani, the Qatari economy is trying to diversify away from oil and natural gas. As a result, the city has experienced a real estate boom, a population boom , and an influx of corporate and commercial activity. The city is also home to the country’s only international airport, a number of sports stadiums, and Qatar University.
Ras Laffan is an industrial city located approximately 50 miles north of Doha, serving as the main site for production of liquefied natural gas (LNG). The port of Ras Laffan is one of the largest LNG ports in the world and is host to some of the country’s largest companies.
Ras Laffan utilizes an artificial harbor, recently expanded by 51 square miles in order to accommodate marine traffic into 2024. The port city has been identified by the Qatari government as strategically important to secure a “solid economic future for the state of Qatar.”
Established in the mid-20th century by Qatar Petroleum, Mesaieed served as Qatar’s only deep water port for more than 20 years. Located about 30 miles south of Doha, Mesaieed serves as a major industrial city and is the principal terminal for oil exports. According to the Qatari Embassy, there are numerous major industrial projects underway in Mesaieed, as well as several planned projects.
According to the Mesaieed Industrial City website, commodities imported and exported through the Mesaieed port account for 60% of the state’s GDP, with over 1,000 vessels per year being serviced by the port. As a result, Mesaieed has been nicknamed the “Gateway to Qatar”. Mesaieed is also known for its arid climate, and was also the site of the endurance competition during the 2006 Asian Games.
Planned to open in 2012, Qatar’s “Entertainment City” promises to be one-of-a-kind in the region, with over 1,000 square kilometers of development space, including 12 five-star hotels, a theme park, air conditioned pedestrian walkways, water taxis, 4,500 residential units, and a world-class shopping mall.
Entertainment City has received investment from the Abu Dhabi Investment House, which identifies Entertainment City as a “$10 billion global mega mixed-use development initiative.”
Currently the tallest building in Doha, the Aspire Tower was built for the 2006 Asian Games, hosted by Qatar. The tower was a focal point of the Asian Games, with the top of the structure featuring a burning flame that was visible throughout the city for the duration of the event.
The building was designed as a “celebration of earth and sky” and cost approximately $190 million to complete, according to a European consulting firm. The tower includes a two - floor reception area, a three-floor sports museum, revolving restaurant, observation deck, a swimming pool, and 17 floors of five-star hotel accommodations.
Qatar’s rapid growth over the past few decades and the country’s immense wealth are powered by vast oil and gas reserves. Qatar is sometimes referred to as the Saudi Arabia of natural gas, with the third - largest reserves in the world after Russia and Iran, with approximately 14% of the world’s share, according to the U.S. Energy Information Administration (EIA).
The bulk of Qatar’s natural gas is found in the North Dome Gas Field (also known as North Field) off the northeastern coast of the country in the Persian Gulf. Portions of the field also are found on land. The North Dome is contiguous with Iran’s South Pars Complex, which is traversed by the maritime border between the two countries. According to the EIA, the North Field contains “nearly all” of Qatar’s 896 trillion cubic feet of natural gas reserves, although there is a moratorium on new projects until at least 2014.
As a result of these massive reserves, Qatar is the world’s leading liquefied natural gas (LNG) exporter, with primary export destinations being Japan, South Korea, India, Belgium, the United Kingdom and Spain. These countries comprise 90% of Qatari LNG exports.
Pictured: Facilities of the Qatar Liquified Natural Gas Company, Ltd. (Qatargas) who handles the exploration, processing and sales of natural gas from the North Dome gas field.
As a result of Qatar’s vast energy wealth, the country was able to transition from a poor British protectorate known for pearling , into a modern country with a standard of living on par with the world’s most developed nations. According to the IMF, Qatar’s per capita GDP stands at $88,232, which nearly doubles that of the United States, at $47,131.
In addition to vast wealth coming from its energy production, there is no personal income tax on employee wages, although individual may be taxed on Qatari-source derived from business activities under Qatar’s corporate tax law, according to Deloitte. Qatar also benefits from one of the lowest reported unemployment rates in the world, at 0.5%, according to the CIA World Factbook’s estimate for 2010.
However, despite the wealth of the country, Qatar has been criticized for its handling of several human rights issues, including human trafficking and forced labor, which are highlighted in the U.S. State Department’s “Trafficking in Persons” report.These abuses are illegal in Qatar, but critics say these laws have not been enforced sufficiently. In these cases, the promise of high-paying jobs have drawn people from Southeast Asia and India to the country in what has been described as a form of indentured servitude.
The most globally recognized media outlet in the Middle East, Al-Jezeera is headquartered in Qatar’s capital, Doha. After the BBC’s Arabic language station fell apart in 1996, Aljezeera was launched and has been controversial in the region ever since. In the first five years of its existence, Qatar’s Sheikh Hamad bin Khalifa Al Thani helped sustain the network with a loan of approximately $130 million and established the network via Emiri decree.
Unlike most news outlets in the region, Aljezeera is considered a more trustworthy source of information, compared to government-owned and censored media in other Middle East countries. Al-Jezeera is available via satellite, which helped the network in its early stages to reach viewers in other Arab countries as well as around the world.
In 2022, Qatar will become the first Middle Eastern country to host a FIFA World Cup after beating the United States by a vote of 14-8 in FIFA’s final round of selection. Qatar’s climate and potential “operational risks” were of concern to FIFA planners, but the country’s plans for climate controlled stadiums and relative stability were enough to swing the vote.
Qatar is planning to build or expand a total of 12 stadiums for the event, five of which are currently underway. The plans are to include alternative energy components, such as solar panels , to help manage the energy required for climate control and keep them carbon-neutral.
In the week after the announcement that Qatar would host the World Cup, the Qatar Exchange shot up 9 percent, with investors expecting large influxes in infrastructure spending. In the buildup to the event, the Qatar First investment Bank projects investments totaling $59.4 billion that will be put toward stadiums, accommodation, and infrastructure. The bank has identified health care and educationas key sectors of expected growth from the World Cup.
Just like several other Middle East nations, Qatar has been working toward diversification of its economy away from oil and natural gas. Qatar is striving to become more competitive on a global scale by putting an emphasis on education and the development of new technology.
Nowhere is this more evident than in Qatar’s Education City, in which global universities, such as Cornell, Georgetown, University College London, Northwestern , and Carnegie Mellon maintain branch campuses.
Within Education City is the Qatar Science & Technology Park (QSTP), which hosts several multinational companies, including GE, ExxonMobil, Microsoft and Shell, as well as local startups, according to the official website. The QSTP is seeking to encourage foreign companies to invest and develop resources within Qatar with the potential to commercialize their products in the country.