By Dr Abdulaziz A al-Ghorairi
Under the wise leadership of the Emir, His Highness Sheikh Tamim bin Hamad al-Thani, Qatar has expertly mastered the value of project spending as a tool for private sector growth and development. Top-down government spending on large infrastructure, real estate and transport projects means that Qatar dominates the construction sector in the Middle East, which continues at an incredible pace today despite lower oil prices.
Speaking in February this year, HE the Finance Minister Ali Sherif al-Emadi said the government was spending about $500mn a week on capital projects focused on preparations to host the 2022 World Cup. A total of 90% of World Cup projects have been awarded and are expected to be executed on time, and two-thirds of these projects will be delivered in the next 24 months. These projects are of course much more than simply stadiums, most being related to transport. HE the Minister of Finance said that around 65% of road projects in Qatar will be completed in 2017 and 2018, and more than 50% of railway projects have been completed, including 100% of tunnel-drilling operations and 45% of stations.
The result of this incredible rate of spending is that Qatar’s economy is predicted to grow 3.4% to 3.5% this year, with much of this growth attributed to the private sector and within that the construction sector. Qatar will have a set of visually exciting stadiums that will impress a global audience during the World Cup and the most advanced fully multimodal transport network in the Middle East. While the amount spent on projects is high, it is well within Qatar’s means and the 2017 budget deficit is projected to shrink to QR28.3bn in 2017, from the QR46.5bn planned for 2016. The government is also wisely thinking ahead beyond the World Cup in 2022, with an adjusted spending plan and further projects to ensure there is no sudden drop in economic stimulus when the football games end.
Money spent on transport projects is money well-spent. The government has made investment in Qatar’s transport infrastructure a top priority for the next decade to diversify the economy, and transport will continue to drive economic development in Qatar. By air, the iconic Hamad International Airport connects Qatar with more than 150 destinations across the world and welcomes business and leisure tourists in ever-growing numbers. By sea, Hamad Port is one of the largest ever greenfield port developments and is making Doha a world transport and logistics hub. By rail, huge projects associated with the Doha Metro, Lusail Light Rail Transit and a long-distance passenger and freight, will move people and freight around Qatar in a sustainable and efficient way as befits an advanced and highly developed nation.
* Dr Abdulaziz A al-Ghorairi is senior
vice-president & group chief economist and head of Asset Management at
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