By Dr Abdulaziz A al-Ghorairi
Under the vision and policies of the Emir, His Highness Sheikh Tamim bin Hamad al-Thani, Qatar is currently enjoying a very special period of exceptional economic prosperity.
There are many statistics that economists use to demonstrate this, but perhaps the most commonly cited ones include Qatar’s highest GDP per capita in the world and long period of continuous economic growth.
Qatar is well known internationally as the world’s biggest supplier of LNG, and like other GCC countries, is a key player in the world energy market. However, Qatar’s current economic success is due to much more than our abundant natural resources.
Qatar has successfully increased total economic growth by encouraging the expansion of the private sector and diversifying the economy away from a dependence on oil and gas. This has not occurred by accident but due to wise national economic policies first implemented a number years ago, of which we are now enjoying the benefits today.
Qatar’s economy has achieved a consistently high level of economic growth, with an average rate of 15.4% between 2004 and 2012. This year it is expected that economic growth will reach an impressive 6.3% for 2014. This figure is even more remarkable when we take into account that the hydrocarbon sector has not made any significant increases to GDP in 2014. Economic growth has come instead from the non-hydrocarbon sector. The year 2013 saw a total of $2.8bn derived from the non-hydrocarbon sector and growth here is expected to reach 11.5% for 2014.
It is a strong and diverse private sector that makes Qatar stand out amongst its regional peers and become the second biggest economy in the GCC thanks to its knowledgeable policies and contemporary vision. Oil and gas still represent more than half of Qatar’s GDP and 90% of exports, but dependence is decreasing significantly with production capped to last another 100 years and conservative budgets have meant that Qatar’s economy has been unaffected by lower oil prices.
Contributions to Qatar’s growing private sector have come from many different sources, and especially from the financial and construction sectors. Qatari banks are considered to be regional leaders in terms of profit and expansion into new markets such as Turkey, taking advantage of strategic and historic trade flows. Construction has been stimulated by large government projects that are playing a significant and fundamental role in economic growth and development. The cement industry for example is expected to grow by 11.2% over the next five years.
In addition to huge spending on infrastructure, Qatar has wisely used surpluses from hydrocarbon revenues to develop and stimulate its wider economy, notably by allocating large financial resources into education, health and transportation. The country has succeeded in creating a modern educational environment capable of producing a new generation of leaders and innovators who are also in touch with Qatari culture and Islamic values.
In transportation, Qatar Airways has become a leading international company in providing world-class services and Hamad International Airport has made Doha a world aviation hub. Qatar is also growing as a tourist destination with numerous attractions and international conferences drawing visitors from all over the world.
SMEs play a pivotal role economic diversification and the government has supported entrepreneurship through State-lead agencies offering support and training.
The Qatari banking sector is also supporting SMEs by providing specialised banking services, as under normal circumstances SMEs usually find it difficult to access funds with their limited credit history and lack of assets.
To conclude, Qatar has made huge progress through diversifying income streams, improving productivity and using wealth generated from natural resources wisely. The cumulative result is that we are on target to achieving the strategic goal laid out in the Qatar National Vision 2030 of a knowledge-based economy and preparing for a future that doesn’t include oil and gas.
LEAVE A COMMENT Your email address will not be published. Required fields are marked*
Liquidity to solvency – the changing dynamics
Facebook Financial formed to pursue commerce ambitions
China inflation edges up on the back of food prices
India’s top airline to raise $534mn to combat cash drain
Asian markets rise but trade talks, stimulus cause concern
US Treasury to issue more debt to finance $3tn budget deficit
Joe Biden needs Fed’s Powell on board to fix racial wealth gap
Job openings in US rose unexpectedly in June; hiring solid
Consistent upgrades make QSE hopeful of securing 'developed' market category