Qatar can be considered one of the most stable countries in the GCC region, given its combination of valuable natural resources and prudent macroeconomic management. The country is currently undergoing transformation under the National Vision , in which it aspires to achieve an advanced, sustainable, and diversified economy.
The Qatari vision is aimed at diversifying the national economy to reduce dependence on hydrocarbon industries and expanding competitive services industries. As key goal, it is sought to establish Qatar as a services hub in sectors such as financial, air transport, construction, education, healthcare, media and tourism and conference services.
At the same time the aim is to vitalize the creative services sector in the cultural, entertainment, design and artistic services. Significant strides have been made in this direction. Qatar is transforming gains from gas and oil into knowledge — building universities, reforming the school system, improving vocational training and setting up an international forum for finding the most effective forms of innovation.
However, Qatar has had a softer economic landing than most other oil-exporting nations. Faced with a new lower-growth paradigm, the Qatari government is in the process of battening down the fiscal hatches, in synchrony with countries across the region. Current expenditure fell sharply in , with widespread redundancies in central government, public administrations and state-owned enterprises such as Qatar Petroleum and Qatar Rail.
At the same time, many projects regarded as non-essential have been mothballed, including the high-profile Al Karaana petrochemicals project. The government has also hiked tariffs on utilities such as water and electricity and allowed gasoline prices to fluctuate freely. Over the next two years, growth should be lifted by moderately higher oil and gas prices, while the new Barzan gas project will boost gas production by 1. Getting ready for the games is proving to be a gargantuan task, with an eye-watering USD million currently being spent weekly on the construction of stadiums, hotels, roads and sewage works.
Energy prices represent one major downside risk, with recent signs of record U. There is also uncertainty in the LPG market, with fears of a supply glut going forward as new reserves from Australia and the U. In addition, monetary normalization in the U. We see growth of 3. Growth over the last few decades has been achieved largely through increasing inputs.
The government funneled vast amounts of money into large-scale capital projects while the population ballooned, more than doubling in the last ten years. At the same time, total factor productivity growth has remained sluggish.
In order to wean itself off its dependence on oil and develop a knowledge-based economy, progress is needed to improve the business environment, increase human capital and improve the efficiency of public investment.
The government is keenly aware of this fact, and the National Vision plan provides a blueprint for the type of competitive, diversified economy Qatar yearns to nurture, while the soon-to-be-announced National Development Plan will continue to elaborate on how this is to be achieved. The project has so far managed to lure several Western universities, including University College London and HEC Paris, to a purpose-built site on the outskirts of Doha, where they will rub shoulders with local institutions.
Although perhaps, as Qatar has known nothing but transformation for the past few decades, it will be ideally placed to rise to the challenge. Click on the button below to get started. Sign Up. Major Economies. South-Eastern Europe. Sub-Saharan Africa. Central America. Monetary and Financial Sector. Precious Metals. Region Reports.
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