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Qatar Takes Business in The Middle East to The Next Level

Qatar Takes Business in The Middle East to The Next Level

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The Qatari economy is an industry driven one, with oil and gas exports accounting for more than half of its total GDP (which was around $150 billion in 2010). Energy exports also represent some 85 percent of export earnings and 70 percent of government revenues. The economic downturn it faced during the 1980s and mid 1990s with fluctuating oil prices, truly exposed Qatar’s overreliance on the oil industry. Additionally, several reports indicate that Qatar’s oil is expected to run dry soon, if current production levels are maintained.

Building on that realization, the government has turned its focus to the development of its gas sector. The world’s third largest proven gas reserves, exceeding 25 trillion cubic meters, are sitting under its 11,500 sq. km land. Those supplies are 14 percent of the total global gas reserves, and will ensure stable economic growth for the country, as worldwide demand for liquefied natural gas (LNG) continues to rise. Its LNG capacity, as estimated by the IMF, will reach a peak of 77 million tons per year in 2011, compared to only 30 million in 2008, signaling the benefits of these development projects.

Learning from its earlier setback with oil, Qatar is maximizing the potential of its natural gas industry while creating a “trickle-down” effect to other segments of the economy. Through this initiative, primary competencies and competitive advantages gained in the energy industry will be transferred to other industries. Many of Qatar’s main industrial and urban projects are built in close proximity to large oil & gas refineries and vibrant seaports, for example.

Authorities have implemented several economic diversification plans to increase local and foreign investments in non-gas related projects and recent economic policies have emphasized the importance of developing Qatar’s non–energy sectors. Expanding the services sector is now a top priority for the government, especially in finance and tourism. Substantial investments are also being directed towards large-scale infrastructure projects, including transportation and water systems, and social foundations such as healthcare and education services. Other important Qatari industries also include fertilizer production, steel, cement and commercial ship repairing.

purchasing ambien A buoyant financial center

Qatar’s financial sector is vibrant and growing rapidly. An increasing number of employees are taking on financial services jobs every year. The country reportedly created an estimated 5,200 new jobs in the finance sector in 2010 alone, taking the total number of jobs employed by the financial services industry to over 20,000 at the end of last year. Timely governmental interventions and strong support ensured that Qatar was well positioned to weather the global financial crisis, and that its banks and financial institutions remained healthy.

Qatar Central Bank (QCB) supervises the banking industry by monitoring the commercial banking system and formulating relevant monetary policies. QCB, through its newly launched Financial Stability Unit, has been instrumental in guaranteeing the stability of the financial system as a whole. Its efforts have reduced banking exposure to bad loans and risky assets, through such measures as keeping bank credit growth in check, limiting banks’ involvement in proprietary equity investments and the financing of real estate projects, constraining their foreign currency exposure levels and banning banks from providing financing for securities trading purposes. The government had also supported the banks in 2009 by undertaking two rounds of capitalization and through buying up some of the local equity and real estate assets they had piled up before the crisis hit.

The authorities opened up new channels for overseas inward investments when they announced the issuance of several types of bonds in 2009 with the aim of creating a sovereign benchmark yield curve. The move was intended to facilitate bond issuances by state-owned companies and commercial banks, and it did just that. Earlier this year, the IMF reported that “external borrowings” of both sovereign entities and business corporations in Qatar doubled to $70 billion from 2008 to 2010. The report also showed that the country’s “sovereign and guaranteed external debt” is mainly long term and that, given the state of its current debt payments profile, it was unlikely that Qatar would face any refinancing problems in the foreseeable future.

In the latest Global Financial Centers Index (GFCI) ranking, Qatar just overtook Dubai as the highest ranked financial center in the Middle East, and ranked 30th globally. The Emirate of Dubai has been constantly ranked number one in the region with respect to financial services since the twice-a-year index was launched back in 2007, sponsored by Qatar Financial Center Authority. The GFCI also pointed out that Qatar’s finance industry is strongest in reinsurance, captive insurance and asset management services.

average dose of ativan for anxiety 2022 FIFA World Cup


“Expect Amazing” was the slogan of the Qatar Bid committee, which entered into the race to host the prestigious football tournament. The FIFA World Cup is expected to draw roughly half a million visitors and football lovers to Qatar, which is a third of its current population, and it will be the first time the event is held in a Middle Eastern country. The FIFA competition is anticipated to have a major impact on Qatar’s economy during the next decade, as initial estimations suggest that some $65 billion will be spent to prepare the country for such a huge sporting event. Before winning the bid, the government had previously announced its plans to spend up to $100 billion on infrastructure projects as part of its impressive “National Vision 2030” to modernize the country. Landing the World Cup event will now accelerate the completion of many of these projects.

The government is said to be planning to cover $40 billion from the total required investments, with the rest supplied by state entities like Qatar Petroleum. Qatari authorities have declared the launch of 200 projects in different areas only as an initial phase, including major projects in transportation, tourism, healthcare, education and housing sectors. Projects in the pipeline or already started include a $25 billion metro and rail network, a $20 billion sum to build and expand roads and a $10 billion investment on the new Doha International Airport. An additional $4 billion has been set for the construction of stadiums and sport facilities. Qatar’s banks are highly tipped to benefit from increased demand for financing and stronger financial activity on the back of these massive planned projects. A number of European companies have already secured bids for some of the construction developments in Qatar, but many bids are still open and several major Chinese construction groups are reportedly involved in the bidding marathon. Overall, the 2022 World cup is expected to considerably raise the Foreign Direct Investment flow into the country.

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With Qatar’s ample resources, especially in LNG, and China’s ever-hungry economy for energy to fuel its continuous growth, it is no wonder that the two countries have been working towards strong bilateral relations. Recent agreements have facilitated enhanced cooperation between governments and corporations on both ends, especially in the utility and infrastructure sectors. Huawei, Sino-Hydro and some 30 other Chinese entities are doing business in Qatar; according to the Chinese embassy in Doha, they had gained contracts worth over $3 billion up till the end of 2010.

During the past two years, two major energy-related deals were signed between China and Qatar, both of which were focused on gas exploration. China’s CNOOC, the nation’s third largest oil company, had signed a 25-year agreement with Qatar Petroleum for offshore gas exploration in the Arabian Gulf state. That deal included the drilling of three wells in five years. CNOOC’s chairman, Fu Chengyu, forecasted China’s need for Liquefied Natural Gas to hit 40 million to 60 million tons a year by 2020. Last year, China National Petroleum Corp (CNPC) and Shell, inked a 30-year exploration and production agreement with Qatar Petroleum that covers over 8,000 sq. km, located on both land and sea in Qatar.

Conversely, 2011 witnessed the launch of a $10 billion petrochemical joint venture between the same parties (CNPC, Shell and Qatar Petroleum), but on Chinese soil. The proposed refinery is to be built in Zhejiang province, in Eastern China, where local authorities have also signed the framework deal. The project follows a giant supply agreement between both governments, and is the first solid foothold for Qatar and Shell in China.

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