Qatar has experienced rapid economic growth over the last several years on the back of high oil prices, and in 2008 posted its eighth consecutive budget surplus. Economic policy is focused on developing Qatar’s no associated natural gas reserves and increasing private and foreign investment in non-energy sectors, but oil and gas still account for more than 50% of GDP, roughly 85% of export earnings, and 70% of government revenues. Oil and gas have made Qatar the second highest per-capita income country – following Liechtenstein – and one of the world’s fastest growing. Proved oil reserves of 15 billion barrels should enable continued output at current levels for 37 years. Qatar’s proved reserves of natural gas are nearly 26 trillion cubic meters, about 14% of the world total and third largest in the world. The drop in oil prices in late 2008 and the global financial crisis will reduce Qatar’s budget surplus and may slow the pace of investment and development projects in 2009.
Before the discovery of oil, the economy of the Qatari region focused on fishing and pearl hunting. After the introduction of the Japanese cultured pearl onto the world market in the 1920s and 1930s, Qatar’s pearling industry faltered. However, the discovery of oil, beginning in the 1940s, completely transformed the state’s economy. Now the country has a high standard of living, with many social services offered to its citizens and all the amenities of any modern state.
Qatar’s national income primarily derives from oil and natural gas exports. The country has oil reserves of 15 billion barrels (2.4 km³), while gas reserves in the giant North Field (South Pars for Iran) which straddles the border with Iran and are almost as large as the peninsula itself are estimated to be between 800 trillion cubic feet (23,000 km3) to 80 trillion cubic feet (2,300 km3) (1 trillion cubic feet is equivalent to about 80 million barrels (13,000,000 m3) of oil). Qatar is sometimes referred to as the Saudi Arabia of natural gas. Qataris’ wealth and standard of living compare well with those of Western European states; Qatar has the highest GDP per capita in the Arab World according to the International Monetary Fund (2006) and the second highest GDP per capita in the world according to the CIA World Factbook. With no income tax, Qatar, along with Bahrain, is one of the countries with the lowest tax rates in the world.
While oil and gas will probably remain the backbone of Qatar’s economy for some time to come, the country seeks to stimulate the private sector and develop a “knowledge economy”. In 2004, it established the Qatar Science & Technology Park to attract and serve technology-based companies and entrepreneurs, from overseas and within Qatar. Qatar also established Education City, which consists of international colleges. For the 15thAsian Games in Doha, it established Doha Sports City, consisting of Khalifa stadium, the Aspire Sports Academy, aquatic centres, exhibition centres and many other sports related buildings and centres. Following the success of the Asian Games, Doha kicked off an official bid to host the2016 Summer Olympics in October 2007. Qatar also plans to build an “entertainment city” in the future.
Qatar aims to become a role model for economic and social transformation in the region. Large scale investment in all social and economic sectors will also lead to the development of a strong financial market.
The Qatar Financial Centre (QFC) provides financial institutions with world class services in investment, margin and no-interest loans, and capital support. These platforms are situated in an economy founded on the development of its hydrocarbons resources, specifically its exportation of petroleum. It has been created with a long term perspective to support the development of Qatar and the wider region, develop local and regional markets, and strengthen the links.