Chronicle of the Middle East and North Africa

Economy of Qatar

Economy of Qatar
Fishermen fix a net on the corniche of the Qatari capital Doha on July 2, 2017. (Photo by STR / AFP)


Qatar’s oil and natural gas resources are the country’s main economic engine and government revenue source, driving Qatar’s high economic growth and per capita income levels, robust state spending on public entitlements, and booming construction spending, particularly as Qatar prepares to host the World Cup in 2022. Although the government has maintained high capital spending levels for ongoing infrastructure projects, low oil and natural gas prices in recent years have led the Qatari Government to tighten some spending to help stem its budget deficit.

According to the CIA World Factbook, Qatar’s reliance on oil and natural gas is likely to persist for the foreseeable future. Proved natural gas reserves exceed 25 trillion cubic meters – 13% of the world total and, among countries, third largest in the world. Proved oil reserves exceed 25 billion barrels, allowing production to continue at current levels for about 56 years. Despite the dominance of oil and natural gas, Qatar has made significant gains in strengthening non-oil sectors, such as manufacturing, construction, and financial services, leading non-oil GDP to steadily rise in recent years to just over half the total.

Following trade restriction imposed by Saudi Arabia, the UAE, Bahrain, and Egypt in 2017, Qatar established new trade routes with other countries to maintain access to imports.

Gross Domestic Product

Qatar’s gross domestic product (GDP) growth rate slowed to 1.6 per cent in 2017, the weakest it has been in more than two decades.

This was primarily due to the diplomatic dispute with the Gulf Cooperation Council over Qatar’s alleged support for terrorism, culminating in the severing of diplomatic and trade relations in mid-2017.

Growth also came under pressure from efforts to control public spending in response to declining oil prices.

Quarterly data show that the economy has successfully adapted to the shock, with the growth rate rising to 3.3 per cent in the fourth quarter of 2017, compared to an average of 1 per cent in the previous three quarters.

The World Bank predicted that the growth rate would reach 2.3 per cent in 2018, an increase of 3 per cent in the medium term.

In addition, rising energy export revenues have helped to ease public finance constraints, freeing up funds for infrastructure spending ahead of the 2020 FIFA World Cup and the $10 billion Barzan gas project, which is expected to begin operations by the end of 2019.

Economy of Qatar
Sources: International Monetary Fund (IMF), World CIA Factbook, World Bank Data and World Trade Organization (WTO). @Fanack
Indicatorsmeasuring unit20162017Change ±
GDP (at constant 2010)Billion US$170.685173.3812.696
GDP growth (annual)%2.11.6-0.5
GDP per capita (constant 2010)US$66,41965,694-725
GDP (at current value)Billion US$151.732166.92915.197

Source: World Bank.

International Market Position

Qatar is the second most competitive economy in the Arab world and ranks 25th globally (down from 18th). The drop is largely due to the decline in oil and gas prices, which had a significant impact on the country’s financial situation and saw it move from a fiscal surplus of 10.3 per cent in 2015 to a deficit of 4.1 per cent of GDP in 2016.

Meanwhile, public debt increased from 35.8 per cent to 47.6 per cent of GDP in the same period. However, the macroeconomic environment remains strong, ranking 20th globally and first in the region, as do the infrastructure facilities, commodity markets and levels of health and primary education. Going forward, the country will need to ensure better access to digital technology for individuals and businesses and to strengthen educational institutions.

IndicatorRank (out of 138) 2016–2017Rank (out of 137) 2017–2018Change in rank ±
Macroeconomic environment220-18
Health and primary education2734-7
Higher education and training3037-7
Goods market efficiency715-8
Labor market efficiency1719-2
Financial market development2125-3
Technological readiness3334-1
Market size5051-1
Business sophistication1822-4
Global Competitiveness Index1825-7

Source: Global Competitiveness Index 2016/2017 and 2017/2018

Agriculture, Industry, Services

Agriculture and fishing – once the mainstays of Qatar’s economy – account for a miniscule 0.07 percent of GDP.

Since at least the 1970s, the country’s government has talked about ‘diversification’, by which they mean the development of alternative industries and services to reduce the nation’s dependence on hydrocarbon commodities.

As one of the main components of economic development, the agricultural sector in Qatar is getting a lot of attention from the government, who has been working to remove natural obstacles that impede extension of agriculture by supporting farmers and encouraging national investments in the agricultural sector.

The agricultural activity in Qatar focuses on developing modern irrigation systems, categorizing farms, improving the quality of agricultural production, introducing modern scientific and technological techniques, and diversifying farming production.

One of the practical steps taken in this direction was the agreement with the University of Qatar to introduce a program in the Faculty of Science to instruct national cadres in agricultural sciences.

The Agricultural Development Department is responsible for drawing up agricultural and livestock development plans and programmes, establishing experimental and model farms, marketing the products of these farms, providing farming services for farmers, issuing agricultural licenses and applying agricultural and veterinary quarantine procedures.

The Agricultural and Water Researches Department is responsible for carrying out field experiments and studies on horticulture, crops, forage, utilization of irrigation water, water conservation and implementing scientific and technological means of agricultural and water development.

The Department of Fish Resources is responsible for protecting, developing, manufacturing and optimizing the utilization of the resources of marine life and supervising the implementation of this policy, managing fishing affairs, modernizing fishing techniques and equipment, securing the requirements of the fishing profession and licensing fishing professionals and fishing boats. Fishermen and farmers are offered loans to enable them to increase their productivity. Deterring actions are taken to prevent fishing in protected areas, and fishing by means of dredging is prohibited in order to conserve aquatic life and fish resources.

Governmental experimental farms work in the field of agricultural experimentation, with the aim to produce locally suited breeds of agricultural products. Agricultural experiments have also been carried out on horticulture in a controlled environment as part of the research to produce better and new varieties. Varieties of tomatoes were also farmed in a green house under a special drainage system with the use of sand and organic fertilizers.

Qatar has its sights set on banks involved in project finance and private banking, as well as commercial and investment banking.

The fruits of the country’s booming economy can be seen in investment across all sectors, stretching to education and health care facilities. More than ten billion USD of public funds are being pumped into roads, sewerage and a new airport, in a four-year infrastructure upgrade aimed at addressing the needs of a rapidly expanding economy.

Meanwhile, the private sector is investing billions of dollars in new residential, commercial and hotel space to cater for the influx of companies, professionals and visitors. Qatar Airways signed a deal for a fleet of 60 Airbus A350s, worth 10.6 billion USD.

Qatar is investing up to 500,000 USD per citizen over the next five years in the economic and social infrastructure, notably in education. More than 8 billion USD has been set aside for health care research, and according to the government this is the largest cash endowment of its kind anywhere in the world.

Instead of pouring all hydrocarbon revenues into the local economy, in 2005 the government created a sovereign wealth fund called the Qatar Investment Authority (QIA). The QIA, headed by Hamad bin Jassim bin Jabir, is an investment fund which absorbs surplus hydrocarbon revenues and acts as insurance for Qatar’s future wealth. ‘Our energy sector won’t last forever,’ Sheikh Hamad bin Jassim told The Financial Times in 2007, ‘so we need to secure a good life so they [the future generations] can continue the same standard of living. We will have lots more money over the next few years. The challenge is where to invest it.

Labour Force

According to the 2009 survey by the Qatar Statistics Authority, Qatar has an economically active population of 1.26 million people, 10 percent of whom are female. For 2004 these figures were 437,000 economically active people, of whom about 15 percent were female. Of the ‘economically inactive’ males, most (72.9 percent) are students. Most of the ‘inactive’ women (69.2 percent) are housewives.

An overwhelming majority of 88.6 percent of the employed Qataris work in the public sector. This does not leave much room for non-Qataris in government offices or companies: 78.4 percent of them work in the private sector. This means that only about 11 percent of the ‘national’ labour force work in the nation’s private sector.

The unemployment rate (2007) is very low at 0.5 percent (down from 3.9 percent in 2003 and 0.9 percent in 2006). The unemployment rate for non-Qataris was even lower, at 0.3 percent, but this last figure is influenced by the fact that non-nationals have to leave the country when their contract expires and they are unable to find a new job. The unemployment rate for ‘nationals’ is 3.2 percent.

The unemployment survey also shows that non-Qataris work longer hours (53 hours a week) than Qataris (38 hours a week). No information is available on average payments to the different nationalities.

For Qatari women, unemployment is a substantial 6 percent (Qatari men: 1.7 percent). Non-Qatari women have the same unemployment rate as Qatari men: 1.7 percent. No information is available on salary differences between the sexes.


Economy Qatar - Infrastructure
Qatar Infrastructure

In the Qatar National Vision 2030, the blueprint for the social and economic future of the country released in October 2008, one of the goals was ‘having a world-class infrastructure backbone’. Estimates set the budget for Qatar’s four major infrastructure projects at 21.6 billion USD. Among these developments is a 2.7 billion USD causeway that will link Qatar with the island state of Bahrain, the construction of the New Doha International Airport, which will be completed in 2015 and will be able to handle 24 and eventually 50 million passengers a year (it handled 15 million passengers and 360,000 tons of freight in 2007), and a large new port project at Mesaieed, 35 kilometres from the capital.

Of great importance and impact will be the country’s first foray into rail. The German firm Deutsche Bahn will design the country’s first railway network, encompassing a light rail project in and around Doha, along with heavy freight and mainline passenger services. The project foresees a passenger and freight railway along the eastern coast, linking the Ras Laffan industrial complex with Doha and the port of Mesaieed, and across the planned bridge to Manama in Bahrain.

Furthermore a freight link to Saudi Arabia, a metro system in Doha and a light rail system connecting the urban centres of Lusail, West Bay and Education City is planned. The projects are designed to move towards a broad based economy, and moving away from dependence on energy. Qatar is trying to position itself as a major cargo handling centre for the region.

Apart from Doha International Airport, Qatar has four other airfields, of which two are paved. There are four commercial ports: Doha, Ras Laffan, Halul Island and Mesaieed. In Mesaieed a new port, officially called New Doha Port, is under construction. There are two terminals for transport of offshore oil and gas production: al-Shaheen and al-Rayyan.

Currently Qatar has a total road network of 7,790 kilometres (2007 estimate), of which 1,107 kilometres are paved. The network is linked to Hofuf in Saudi Arabia and Abu Dhabi in the United Arab Emirates.

External Commerce and Foreign Investment

While the foreign capital invested in Qatar’s oil and gas industry is overwhelmingly Western, it may come as a surprise that Qatar’s main export markets, totalling 56.6 billion USD (2008), are in Asia.

In 2008, 79.4 percent of export earnings came from non-Arab Asian countries. Japan is Qatar’s main export market with a 39.9 percent share in 2008, followed by South Korea (19.9 percent), Singapore (9.9 percent), India (5.1 percent) and Thailand (4.9 percent). Among Arab countries the UAE are by far Qatar’s largest export market with a 4 percent share. With a mere 0.4 percent, the United States form an almost negligible export market for Qatar. Spain and Belgium are the only Western countries to form a substantial export market.

Conversely, on the other side of the balance sheet, the United States turns out to be the biggest supplier of commodities on the Qatari market (total imports in 2008: 25.1 billion USD). According to official Qatari statistics the US accounted for 13.3 percent of imports in 2008, followed by Italy (10.8 percent), Japan (8.9 percent), France (7.9 percent), Germany (7.3 percent). The United Kingdom (5.7 percent), South Korea (5.6 percent), the UAE (5.1 percent) and Saudi Arabia (4.3 percent) were the Emirate’s main import markets.

Roughly one third of Qatar’s imports consist of machinery and mechanical appliances, a quarter are base metals, almost 15 percent are vehicles and other transport equipment, and about 5 percent are food products.

Economic Power and Financial Transparency

The economic buying power of the Gulf States has come under increasing scrutiny by Western politicians in recent years. They publicly warn against the perceived threat of the oil-rich Gulf States using their swollen investment vehicles for political aims. The answer from the accused governments is invariably that they are only in it for the money. However, there can be no doubt that multimillion dollar investments come with at least some political influence.

Economy Qatar - Map Projects New Orleans Katrina Fund

The fact that Qatar has invested heavily in real estate in Syria, thereby propping up the latter’s ailing economy, has certainly been beneficial to mutual relations between these two countries.

Qatar also has more direct ways to gain political profit and influence through the external distribution of petrodollars. When New Orleans was hit by Hurricane Katrina in 2005, Qatar sent USD 100 million in aid to support its victims. This was a great public relations feat, primarily aimed at Qatar’s main military ally, the United States. Moreover, this generous gift gave the Emir the moral leverage to send millions of dollars to Palestinians in the Gaza Strip under Israeli siege, and even more millions to Lebanon for reconstruction of the Shia south after the Israeli air attacks of 2006.

Continuing accusations of financial opaqueness, which are considered more disturbing with the growing economic power of Qatar, have led the authorities to introduce some government reforms.

Most importantly, in July 2007, it was announced that a unified regulatory authority for the financial services sector, modelled on global standards, would be created. These measures should increase financial transparency and efficiency.
See also: and

Qatar’s Investments

The Qatar Investment Authority (QIA), Qatar’s sovereign wealth fund, is in charge of domestic and foreign investment. It was established in 2005. Its mission, according to Article 5 of Emiri Decision No (22) of 2005 (the QIA Constitution), is to ‘develop, invest and manage the state reserve funds and other property assigned to it by the Supreme Council in accordance with policies, plans and programs approved by the Supreme Council’.

The QIA is chaired by Sheikh Tamim bin Hamad Al Thani. The Chief Executive is Sheikh Hamad bin Jassim bin Jabr Al Thani.

Most decisions are made under their patronage although QIA claims to be a professionally managed investment fund.

According to the QIA, its task is to diversify the Qatari economy by taking steps inside and outside its territory to expand the non-hydrocarbon industry. Measures include promotinal activities for the Asian Games; the creation of the Qatar Financial Centre Authority; property and project development by Qatari Diar Real Estate Investment Company; creation of Qatar Airways; and the establishment of new educational facilities.

Outside Qatar, the QIA invests in asset classes such as equities and fixed income and private equity, as well as through direct investment.

QIA has taken advantage of the consequences of the financial crisis, i.e. the collapse of large institutions and international banks downsizing in their non-core markets. Among their shares and stakes, the QIA holds 10-15 percent of Fisker Automotive with an investment of USD 65 million to develop the hybrid sports car called Karma. The QIA was part of the investment group that purchased Miramax Films from The Walt Disney Company in 2010.

QIA was also linked to a takeover of Everton F.C. in a deal worth USD 320 million. Qatar Holding, an indirect subsidiary of QIA, purchased the Harrods Group, including the Knightsbridge department store. QIA is also the largest shareholder in Sainsbury’s. In addition, it has also acquired stakes in LVMH, the French luxury group that owns Louis Vuitton leather goods, Christian Dior perfume and Moët et Chandon champagne, and Tiffany, the US jewelry retailer.

In 2007 Qatari property group Barwa Real Estate bought an international conference centre near the Arc de Triomphe for USD 525 million and the Royal Monceau hotel for USD 325 million. The QIA bought, for USD 572 million, HSBC’s head office at Avenue des Champs Élysées in 2009. Qatar’s sovereign wealth fund has reportedly agreed to pay more than USD 650 million for a retail and office building on Avenue des Champs Élysées in June 2012, also granting the ensemble of the French suburbs an endowment of USD 130 million. Qatar also holds also stakes in the French Total oil company.

In February 2012 QIA completed the acquisition of Credit Suisse’s headquarters in London. QIA holds a 6 percent stake in Credit Suisse and owns shares in Songbird, the majority owner of Canary Wharf Group. Qatari Diar, a property arm of the fund, along with Canary Wharf, won a USD 480 million deal to redevelop the Shell Centre in London that houses the Royal Dutch Shell’s London headquarters. In May 2012, it acquired a stake below 3 percent in Royal Dutch Shell. A 3 percent take would be worth USD 6.4 billion based on Royal Dutch Shell’s current share price, and would make Qatar the third largest shareholder in Shell.

Qatar will also invest up to USD 5 billion into the funding of infrastructure development in Bangladesh; an investment that would cover the power sector, roads, airports and river dredging. Qatar will furthermore deposit USD 1.8 billion into the Central Bank of Bangladesh.

Qatar National Bank
Qatar National Bank (QNB) was established in 1964 as the country’s first Qatari-owned commercial bank, 50 percent of which is owned by Qatar’s sovereign wealth fund. It is currently the largest lender in the Middle East with USD 91 billion in assets (2012).

QNB has been expanding by acquiring European subsidiaries in the Middle East. QNB holds stakes of 39,9 percent (2012) in Dubai’s Commercial Bank International (CBI) and is in the process of buying France’s Société Générale’s majority stake in the Cairo-based subsidiary.


Tourism accounts for 11.4 percent of Qatar’s current GDP. In 2004, the government announced a plan to invest 15 billion USD in tourism projects. In 2005 the country received three and a quarter million of tourists, a number that will grow to one and a half million by the year 2011. In the same period the number of 4- and 5-star hotel rooms will increase from 2800 to 16,500.

28 percent of the tourists come from Europe, 20 percent is of domestic origin, 16 percent come from neighbouring countries in the Middle East, 15 percent from the Americas and another 15 percent from the Asia/Pacific zone.

Qatar aims at what the Qatar Tourism Authority calls ‘sustainable tourism’. For that purpose a number of cultural projects has been realized in Doha: the Qatar National Museum, the Museum of Islamic Art (designed by the architect I.M. Pei), the Qatar National Library (architect Arato Isozaki) and the Qatar Photography Museum (architect Santiago Calatrava). With the construction of luxury beach resorts at al-Fareej and al-Mafjar, development of Qatar’s long coastline has finally begun.

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