After the takeover of Emir Hamad bin Khalifa Al-Thani, the father of the current Emir Tamim, in 1995 Qatar took an almost fairytale rise to an economic wonderland with international charisma.
The wealth of the small country, which is only half the size of Hesse and has fewer inhabitants than Lisbon, is based on the world’s third largest natural gas reserves lying off its coast in the Gulf. Qatar shares this huge gas field with the neighboring Iran on the other side of the Gulf. Emir Hamad bin Khalifa and his ambitious foreign and prime minister Hamad bin Jassim Al-Thani conceived and implemented a plan that made Qatar an influential factor in the region’s economic, domestic and foreign affairs within a few years. Those and other legendary founding figures of the new Qatar shaped the offensive internationalization, which makes Qatar the new dynamic player in the region.
Part of this successful strategy was to export the gas as liquefied natural gas (LNG), an innovative, costly and risky strategy at time. Today, Qatar is the largest LNG exporter in the world. South Korea, Japan and India are the biggest buyers. The strategist behind this project was the legendary energy minister Abdullah bin Hamad Al-Attiyah, who came from a major Emirates family.
Germany is one of Qatar’s main import partners after the United States, France and the United Kingdom. Most of its income from the fossil fuel business is spent on Qatar’s extraordinarily ambitious development towards becoming a country of Arab modernity. Education, health, culture, media, international events and sustainable development have become traits and hallmarks of its national development. For many years and for the foreseeable future, Qatar is and will remain to be a “nation in the making”, which can be seen not only in the countless construction cranes on hundreds of major construction sites in the country. Qatar´s society is in a transition process, the far-reaching plans and high-flying visions have yet to prove themselves. But it is precisely because of its ambitious and far-reaching projects that Qatar was often referred to as a “future lab”.
Qatar National Vision 2030
The government of Qatar plans a steady but controlled growth of its economy. It shall be adapted to the size of the country and be ecologically sustainable. Central to achieving these aspirations is the Qatar National Vision 2030. Its goal is to make Qatar an advanced country that can evolve along the principles of sustainability. It´s success shall be ensured by the interaction of several simultaneous development projects.
The four pillars of the Vision 2030 are:
- The development of Qatar´s economy based on innovative technologies.
- Social development, which takes into account the philosophy of Islam as well as the general values of human coexistence.
- The development of life´s quality based on education, culture and health.
- The consideration of ecological requirements of a growing nation in one of the driest regions of the world.
For the actual implementation of the Vision 2030, the government has adopted the National Development Strategy. It focuses on strengthening the productivity base (total value of resources, institutions, infrastructure, labor), the increase of economic stability (cost planning, reform of the central bank system, connection of the public and private sector, greater liquidity through wider investment), the increase of technical efficiency (energy reduction, Extension of shipping lanes & transport capacities, land use reform) and promotion of economic diversity (growth without fossil resources, Qatar subsidies, promotion of the Qatar Foundation).
Qatar has come a long way on this path until two factors hindered and significantly slowed all developments. The oil price, on which the price of gas also depends, temporarily fell by more than half from its peak in 2012. With that, the government of Qatar had to significantly reduce its spending on developing the country and carrying out its ambitious projects.
Additionally Qatar´s neighboring countries Saudi Arabia and the United Arab Emirates have completely cut off their relations with Qatar in June 2017 for political reasons, from one day to the next. Especially the latter has led to a shock from which the country is only gradually recovering. The borders with Saudi Arabia were suddenly closed; among other things, 70% of all dairy products in the country came from there. Many international companies had organized their business with Qatari companies via Dubai. Again, all connections were suddenly cut off. These are consequences of a targeted closure policy which are reminiscent of the blockade of Berlin.
The government of Qatar refers to the unilateral and without any warning imposed blockade and the boycott of the neighbors as an inflammatory “violation of international rights and violation of the principles of international relations between countries and against human rights conventions”. Various demands of the boycotting countries such as closure of the television station Al-Jazeera and waiver of the FIFA World Cup 2022 were criticized by the government in Doha as an inadmissible interference in internal affairs and curtailment of civil liberties. Qatar is now receiving support in his protest from many international institutions such as the OHCHR, a UN body for human rights violations. The allegation by Saudi Arabia and the UAE that Qatar supports terrorists has long since been dismissed by the government, with arguments that are shared by many institutions and governments in the Western world.
For the small country in the desert, which produces only about three percent of its food itself the consequences of the closure were and are significant: The state budget was significantly reduced, as a result investments in the own country had to be scaled back, including those in science and education. The average income sank by almost a third.
Meanwhile, Qatar is recovering from the political and economic shock. The government by now even believes in the beneficial effects of the blockade. Qatar is striving for a bigger and long-lasting independence from neighboring countries (the neighbors Kuwait and Oman have not participated in the boycott anyway). In addition, the boycott has helped to accelerate its efforts to diversify the country’s economy, say government officials.
Despite all confidence, there is concern in Doha that the massive demonstration of power by its big neighbors may cause serious wounds.
Meanwhile, Doha, the largest city of the emirate continues to grow. The large-scale buildings for the FIFA World Cup 2022 and the construction of a modern infrastructure including public transport are driving domestic economic growth, to at least a good 3% in 2017. The capital Doha is not only the cultural but also the economic center of Qatar. Here you will find the branches of national and international companies. Among them, the largest oil and gas companies Qatar Petroleum, Qatargas and RasGas.
About half of the export of oil and above all gas accounts for the economic growth. The Qataris, however, want to significantly expand their service sector. Again, this is part of the National Strategy. Qatar National Bank and the Qatar Development Bank have their headquarters in Doha. New parts of the city are growing out of the ground. Qatar has an extremely high density of 5-star hotels.
Hamad International Airport has become one of the most modern and largest airports in the region. It is the home airport of the national airline Qatar Airways. With a new fleet, flights around the globe and a number of awards, Qatar Airways is one of the best airlines in the world.
The Qatar Investment Authority (QIA), the sovereign wealth fund of Qatar, has shown its confidence in the economic potential of friendly countries by investing billions in foreign companies. For example, shares in Barclays Bank, the London Stock Exchange and Credit Suisse were acquired on the European market. Investments in German companies such as VW, Siemens, Hapag-Lloyd are also among them. Billions have been invested by Qatari investors in Deutsche Bank, in many medium-sized companies, in various hotels and residential and office real estate in Germany.
Sports & Economy
Qatar is a sports-loving nation. For more than a decade, major sporting events have taken place in Doha. Outstanding were the world championships of handball (2015), table tennis (2004), squash (men in 2012 and 2014), weightlifting (2005), athletics indoor (2010), swimming (short course 2014) and the Road Cycling Championship (2016). International annual tennis tournaments like the Qatar Open feature the global stars of the scene. The artistic gymnastics world championship will follow in 2018 and the 2019 World Indoor Athletics Championships.
The biggest sporting event in Qatar to date has been the Asian Games in 2006. Qatar is regionally considered to belong to Asia and therefore sends its teams and individual athletes to Asian competitions. Currently, Qatar is preparing intensively for the FIFA World Cup 2022. Qatar is the first Arab country to host a football World Cup. It is also the first Muslim country with a World Cup as well as the first country in a desert area.
These were all important points in the FIFA’s decision to nominate Qatar as the host country. The master plan for the Qatar application was developed by the renowned German architecture firm Albert Speer & Partner. A noteworthy component of the application was yet another innovation: The major event will take place CO2-free. Sustainable energy will provide the cooling of the stadiums and fan zones. Qatar had prepared for a football World Cup in the hot summer, and thus on an unprecedented challenge. The decision to host the World Cup in winter was rather regretted by many Qataris, who were already looking forward to using highly innovative sustainable technology. Many companies, including those from Germany, had already worked together with institutions in Qatar to develop sustainable technologies. New stadium concepts are being tested with the capability of reconstruction. A re-constructible stadium can be re-erected in another country.
The FIFA World Cup creates thousands of jobs. It has been and still is a big challenge for Qatar and for involved construction companies from Europe, Asia and other parts of the world to create suitable working conditions on the country’s countless construction sites. Contrary to distorting reports in the media, the conditions on the construction sites of the World Cup stadiums are comparatively good. The statistics of the Qatar Supreme Committee shows that by the end of 2017, two people were killed in workplace accidents at world championship construction sites and nine others died in accidents unrelated to construction, e.g. traffic. International labor organizations such as the ILO are by now praising Qatar for its progress.
The 2022 FIFA World Cup gives the economy of Qatar a significant boost. It requires a massive expansion of infrastructure, including highways, a metro and tram network, a deep-sea port and nine stadiums. Major projects have been awarded to well-known architectural and engineering firms such as Foster + Partners, WS Altkins and Arup Group. German companies also received orders. Deutsche Bahn International is planning a 325 km long rail network for passenger and freight traffic, which will have metro lines and high-speed lines.