Qatar: Introduction
Qatar is a country in the Middle East occupying the Qatar Peninsula on the larger Arabian Peninsula. It is bordered by Saudi Arabia and the Persian Gulf. Much of the country is desert. The government system is an emirate. The chief of state is the Amir, or Sheikh, and the head of government is the Prime Minister. Qatar has a mixed economic system in which the economy includes a variety of private freedom, combined with centralized economic planning and government regulation.
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Qatar: Statistics
| Airports | 6 (2012 ) |
|---|---|
| Cellular Telephones | 2,302,000 (2011 ) |
| Highways | 7,790 (2006 ) |
| Internet Hosts | 897 (2012 ) |
| Internet Users | 563,800 (2009 ) |
| Telephones | 306,700 (2011 ) |
Sources:
CIA World Factbook
Oil formed the cornerstone of Qatar's economy well into the 1990s and still accounts for about 62% of total government revenue. In 1973, oil production and revenues increased sizably, moving Qatar out of the rank of the world's poorest countries and providing it with one of the highest per capita incomes. In 2007, Qatar's per capita income of nearly $67,000 was the fifth-highest in the world.
Qatar's economy suffered a downturn from in the mid-1990s. Lower Organization of Petroleum Exporting Countries (OPEC) oil production quotas, a fall in oil prices, and the generally unpromising outlook on international markets reduced oil earnings. In turn, the Qatari Government cut spending plans to match lower income. The resulting recessionary local business climate caused many firms to lay off expatriate staff. With the economy recovering in the late 1990s, expatriate populations have grown again.
As of 2007, oil production was around 835,000 barrels a day (bpd), and was expected to reach 1.1 million bpd by 2009. At the current production pace, oil reserves are expected to last more than 40 years. Moreover, Qatar's proven reserves of gas are the third-largest in the world, exceeding 900 trillion cubic feet (14% of the world's total proven gas reserves). Qatar shares with Iran the largest single non-associated gas field in the world, the North Field. Qatar is the world's largest producer of liquefied natural gas (LNG), with a capacity of more than 31 million metric tons per annum (mmta) as of 2007. By 2010, Qatar produced more than 77 mmta for LNG exports, accounting for over one-third of the world's LNG supply.
The 1991 completion of the $1.5-billion Phase I of the North Field gas development project strongly boosted the economy. In 1996, Qatar began exporting liquefied natural gas to Japan. Further phases of North Field gas development costing billions of dollars are in various stages of planning and development, and Qatar has concluded agreements with the U.A.E. to export gas via pipelines and to Spain, Turkey, Italy, the U.S., France, South Korea, India, China, Taiwan, and the U.K. via ship. However, the government halted any further expansion of gas production until 2010, as it assessed its plans for future exploitation of the field.
Qatar's natural gas liquefaction facilities and related industries are located in Ras Laffan Industrial City, site of the world's largest LNG exports of more than 31 million metric tons per year. Qatar's heavy industrial base, located in Messaieed, includes a refinery with a 140,000 bpd capacity, a fertilizer plant for urea and ammonia, a steel plant, and a petrochemical plant, and several new petrochemical plants will be built in the coming years. All these industries use gas for fuel. Most are joint ventures between U.S., European, and Japanese firms and the state-owned Qatar Petroleum (QP). The U.S. is the major equipment supplier for Qatar's oil and gas industry, and U.S. companies are playing a major role in the development of the oil and gas sector and petrochemicals.
The country's economic growth has been stunning. Qatar's nominal GDP, estimated to be $129 billion for 2010, has recently been growing at an average of 15%, with an inflation-adjusted 2010 growth rate estimated at 17%. Qatar's 2007 per capita GDP was $138,000, the highest in the world. The Qatari Government's strategy is to utilize its wealth to generate more wealth by diversifying the economic base of the country beyond hydrocarbons.
Qatar pursues a program of "Qatarization," under which all joint venture industries and government departments strive to move Qatari nationals into positions of greater authority. Growing numbers of foreign-educated Qataris, including many educated in the U.S., are returning home to assume key positions formerly occupied by expatriates. In order to control the influx of expatriate workers, Qatar has tightened the administration of its foreign manpower programs over the past several years. Security is the principal basis for Qatar's strict entry and immigration rules and regulations.
Qatar's economy suffered a downturn from in the mid-1990s. Lower Organization of Petroleum Exporting Countries (OPEC) oil production quotas, a fall in oil prices, and the generally unpromising outlook on international markets reduced oil earnings. In turn, the Qatari Government cut spending plans to match lower income. The resulting recessionary local business climate caused many firms to lay off expatriate staff. With the economy recovering in the late 1990s, expatriate populations have grown again.
As of 2007, oil production was around 835,000 barrels a day (bpd), and was expected to reach 1.1 million bpd by 2009. At the current production pace, oil reserves are expected to last more than 40 years. Moreover, Qatar's proven reserves of gas are the third-largest in the world, exceeding 900 trillion cubic feet (14% of the world's total proven gas reserves). Qatar shares with Iran the largest single non-associated gas field in the world, the North Field. Qatar is the world's largest producer of liquefied natural gas (LNG), with a capacity of more than 31 million metric tons per annum (mmta) as of 2007. By 2010, Qatar produced more than 77 mmta for LNG exports, accounting for over one-third of the world's LNG supply.
The 1991 completion of the $1.5-billion Phase I of the North Field gas development project strongly boosted the economy. In 1996, Qatar began exporting liquefied natural gas to Japan. Further phases of North Field gas development costing billions of dollars are in various stages of planning and development, and Qatar has concluded agreements with the U.A.E. to export gas via pipelines and to Spain, Turkey, Italy, the U.S., France, South Korea, India, China, Taiwan, and the U.K. via ship. However, the government halted any further expansion of gas production until 2010, as it assessed its plans for future exploitation of the field.
Qatar's natural gas liquefaction facilities and related industries are located in Ras Laffan Industrial City, site of the world's largest LNG exports of more than 31 million metric tons per year. Qatar's heavy industrial base, located in Messaieed, includes a refinery with a 140,000 bpd capacity, a fertilizer plant for urea and ammonia, a steel plant, and a petrochemical plant, and several new petrochemical plants will be built in the coming years. All these industries use gas for fuel. Most are joint ventures between U.S., European, and Japanese firms and the state-owned Qatar Petroleum (QP). The U.S. is the major equipment supplier for Qatar's oil and gas industry, and U.S. companies are playing a major role in the development of the oil and gas sector and petrochemicals.
The country's economic growth has been stunning. Qatar's nominal GDP, estimated to be $129 billion for 2010, has recently been growing at an average of 15%, with an inflation-adjusted 2010 growth rate estimated at 17%. Qatar's 2007 per capita GDP was $138,000, the highest in the world. The Qatari Government's strategy is to utilize its wealth to generate more wealth by diversifying the economic base of the country beyond hydrocarbons.
Qatar pursues a program of "Qatarization," under which all joint venture industries and government departments strive to move Qatari nationals into positions of greater authority. Growing numbers of foreign-educated Qataris, including many educated in the U.S., are returning home to assume key positions formerly occupied by expatriates. In order to control the influx of expatriate workers, Qatar has tightened the administration of its foreign manpower programs over the past several years. Security is the principal basis for Qatar's strict entry and immigration rules and regulations.
Qatar has been inhabited for millennia. Several families, including branches of the Bani Naim, lived in the peninsula, with the Al Thani and Al Misnad clans becoming the strongest. The Al Khalifa family (which now rules Bahrain) largely dominated the area until 1868 when, at the request of Qatari nobles, the British negotiated the termination of the Khalifa claim, except for the payment of tribute. The tribute ended when the Ottoman Empire occupied Qatar in 1872. When the Ottomans left at the beginning of World War I, the British recognized Sheikh Abdullah bin Jassim Al Thani as ruler. The 1916 treaty between the United Kingdom and Sheikh Abdullah was similar to those entered into by the British with other Gulf principalities. Under it, the ruler agreed not to dispose of any of his territory except to the U.K. and not to enter into relationships with any other foreign government without British consent. In return, the British promised to protect Qatar from all aggression by sea and to lend their good offices in case of a land attack. A 1934 treaty granted more extensive British protection.
In 1935, a 75-year oil concession was granted to the Qatar Petroleum Company, a subsidiary of the Iraq Petroleum Company, which was owned by Anglo-Dutch, French, and U.S. interests. High-quality oil was discovered in 1940 at Dukhan, on the western side of the Qatari peninsula. However, the start of WWII delayed exploitation of Qatar's oil resources, and oil exports did not begin until 1949.
During the 1950s and 1960s gradually increasing oil revenues brought prosperity, rapid immigration, substantial social progress, and the beginnings of Qatar's modern history. When the U.K. announced a policy in 1968 (reaffirmed in March 1971) of ending the treaty relationships with the Gulf sheikdoms, Qatar joined the other eight states then under British protection (the seven trucial sheikdoms--the present United Arab Emirates--and Bahrain) in a plan to form a union of Arab emirates. By mid-1971, as the termination date of the British treaty relationship (end of 1971) approached, the nine still had not agreed on terms of union. Accordingly, Qatar declared independence as a separate entity and became the fully independent State of Qatar on September 3, 1971.
In February 1972, the Heir Apparent, Sheikh Khalifa bin Hamad, deposed his cousin, Amir Ahmad, and assumed power. Key members of the Al Thani family supported this move, which took place without violence or signs of political unrest.
On June 27, 1995, the Deputy Amir, Sheikh Hamad bin Khalifa, deposed his father Amir Khalifa in a bloodless coup. An unsuccessful counter-coup was staged in 1996. The Amir and his father are now reconciled, though some supporters of the counter-coup remain in prison. The Amir announced his intention for Qatar to move toward democracy and has permitted a freer and more open press and municipal elections as a precursor to expected parliamentary elections. Qatari citizens approved a new constitution via public referendum in April 2003, which came into force in June 2005.
In 1935, a 75-year oil concession was granted to the Qatar Petroleum Company, a subsidiary of the Iraq Petroleum Company, which was owned by Anglo-Dutch, French, and U.S. interests. High-quality oil was discovered in 1940 at Dukhan, on the western side of the Qatari peninsula. However, the start of WWII delayed exploitation of Qatar's oil resources, and oil exports did not begin until 1949.
During the 1950s and 1960s gradually increasing oil revenues brought prosperity, rapid immigration, substantial social progress, and the beginnings of Qatar's modern history. When the U.K. announced a policy in 1968 (reaffirmed in March 1971) of ending the treaty relationships with the Gulf sheikdoms, Qatar joined the other eight states then under British protection (the seven trucial sheikdoms--the present United Arab Emirates--and Bahrain) in a plan to form a union of Arab emirates. By mid-1971, as the termination date of the British treaty relationship (end of 1971) approached, the nine still had not agreed on terms of union. Accordingly, Qatar declared independence as a separate entity and became the fully independent State of Qatar on September 3, 1971.
In February 1972, the Heir Apparent, Sheikh Khalifa bin Hamad, deposed his cousin, Amir Ahmad, and assumed power. Key members of the Al Thani family supported this move, which took place without violence or signs of political unrest.
On June 27, 1995, the Deputy Amir, Sheikh Hamad bin Khalifa, deposed his father Amir Khalifa in a bloodless coup. An unsuccessful counter-coup was staged in 1996. The Amir and his father are now reconciled, though some supporters of the counter-coup remain in prison. The Amir announced his intention for Qatar to move toward democracy and has permitted a freer and more open press and municipal elections as a precursor to expected parliamentary elections. Qatari citizens approved a new constitution via public referendum in April 2003, which came into force in June 2005.
Principal Government Officials
Chief of State: Tamim bin Hamad Al Thani
Head of Government: Prime Minister Abdullah bin Nasser bin Khalifa Al Thani
Head of Government: Prime Minister Abdullah bin Nasser bin Khalifa Al Thani
The head of state is the Amir, and the right to rule Qatar is passed on within the Al Thani family, specifically to the current Amir’s sons. Shaykh Tamim bin Hamad, the Amir’s second son by Shaykha Moza bint Nasir al-Misnad, is the Heir Apparent and Deputy Amir, and has no rivals for succession. Politically, Qatar is evolving from a traditional society to one based on more formal and democratic institutions to meet the requirements of social and economic progress. The country's constitution formalizes the hereditary rule of the Al Thani family, but it also establishes an elected legislative body and makes government ministersaccountable to the legislature. In current practice, the Amir's role is influenced by continuing traditions of consultation, rule by consensus, and the citizen's right to appeal personally to the Amir. The Amir, while directly accountable to no one, cannot violate the Shari'a (Islamic law) and, in practice, must consider the opinions of leading families and the religious establishment.
The opinions of the people are institutionalized in the Advisory Council, an appointed body that assists the Amir in formulating policy. Elections in 1999, in which both men and women participated, resulted in the formation of a municipal council. One woman candidate was elected to the municipal council in 2003. Municipal elections were held for the fourth time in 2011, and Advisory Council elections will be held for 2013.
There has been no serious challenge to Al Thani rule. As the most visible sign of the move toward openness, the Al Jazeerasatellite television station based in Qatar is considered the most free and unfettered broadcast source in the Arab world. In practice, Al Jazeera rarely criticizes the ruling Al Thani family or addresses Qatar’s domestic issues.
The opinions of the people are institutionalized in the Advisory Council, an appointed body that assists the Amir in formulating policy. Elections in 1999, in which both men and women participated, resulted in the formation of a municipal council. One woman candidate was elected to the municipal council in 2003. Municipal elections were held for the fourth time in 2011, and Advisory Council elections will be held for 2013.
There has been no serious challenge to Al Thani rule. As the most visible sign of the move toward openness, the Al Jazeerasatellite television station based in Qatar is considered the most free and unfettered broadcast source in the Arab world. In practice, Al Jazeera rarely criticizes the ruling Al Thani family or addresses Qatar’s domestic issues.
FOREIGN RELATIONS
Qatar achieved full independence in an atmosphere of cooperation with the U.K. and friendship with neighboring states. Most Arab states, the U.K., and the U.S. were among the first countries to recognize Qatar, and the state promptly gained admittance to the United Nations and the Arab League. Qatar established diplomatic relations with the U.S.S.R. and China in 1988. It was an early member of OPEC and a founding member of the GCC.
In September 1992, tensions arose with Saudi Arabia when Saudi forces allegedly attacked a Qatari border post, resulting in two deaths. Relations have since improved. In December 2008, Qatar and Saudi Arabia signed a land and maritime border agreement while pledging mutual cooperation on a number of industrial and commercial issues.
For years, both Qatar and Bahrain claimed ownership of the Hawar Islands. The case was eventually referred to the International Court of Justice (ICJ) in The Hague. The ICJ issued a ruling in June 2001, which both sides accepted. In the agreement Bahrain kept the main Hawar Island but dropped claims to parts of mainland Qatar, while Qatar retained significant maritime areas and their resources.
Qatar achieved full independence in an atmosphere of cooperation with the U.K. and friendship with neighboring states. Most Arab states, the U.K., and the U.S. were among the first countries to recognize Qatar, and the state promptly gained admittance to the United Nations and the Arab League. Qatar established diplomatic relations with the U.S.S.R. and China in 1988. It was an early member of OPEC and a founding member of the GCC.
In September 1992, tensions arose with Saudi Arabia when Saudi forces allegedly attacked a Qatari border post, resulting in two deaths. Relations have since improved. In December 2008, Qatar and Saudi Arabia signed a land and maritime border agreement while pledging mutual cooperation on a number of industrial and commercial issues.
For years, both Qatar and Bahrain claimed ownership of the Hawar Islands. The case was eventually referred to the International Court of Justice (ICJ) in The Hague. The ICJ issued a ruling in June 2001, which both sides accepted. In the agreement Bahrain kept the main Hawar Island but dropped claims to parts of mainland Qatar, while Qatar retained significant maritime areas and their resources.
A number of excellent resources focused on international cultures are available online. Below are links to country-specific cultural information for Qatar. For a complete list of culture resources, please visit globalEDGE's Global Resource Directory
Qatar: Centre for Intercultural Learning
The Centre for Intercultural Learning (offered by Foreign Affairs and International Trade Canada) offers resources related to developing and refining the intercultural skills vital to a successful international experience. Available resources include over 100 “Cultural Insights” providing a local and Canadian prospective on culture for countries all over the world, the Centre's Intercultures Magazine, and freely available research and discussion papers. Also available in French.
Qatar: Culture Crossing
This website provides cultural profiles for a great number of countries. The information includes basic cultural guides as well as guides for business professionals and students. Some of the country pages on the globalEDGE website include Culture Crossing as a culture resource as well.
Country Rating1
Rating: A2
Business Climate Rating1
Rating: A3
Risk Assessment2
Return to less dynamic growth after several exceptional years
Qatar posted exceptional growth rates for several years thanks to new natural gas liquefaction mega units, a gas-to-liquids factory and increased oil production.
In 2013 growth will continue the deceleration begun in 2012, while still retaining the strongest in the region.
Activity in the dominant hydrocarbon sector will remain steady despite the moratorium on exploring the main gas field (North Field) until 2015 at least. In the non-hydrocarbon sector, growth is likely to be spurred by ongoing efforts to diversify the economy, especially in petrochemicals. And, large-scale infrastructure is under construction or planned – under the National Development Strategy (2011-2016) and also with a view to the 2022 Football World Cup – as the new Doha airport, a metro, a deep-water port and also, in the future, a rail network linking some Gulf countries and a bridge to Bahrain.
For the future, there are questions surrounding the impact of the surge in shale gas on natural gas prices. In current conditions, however, Qatar’s economy is enjoying increased demand for LNG from developed countries (Japan, South Korea, Germany, United Kingdom) and emerging countries alike, especially in Asia. Furthermore, long-term export contracts covering and its dominant market position, together with low production costs, will no doubt allow the country to maintain its export volumes and respectable margins.
Substantial twin surpluses that help reduce the burden of external debt
Hydrocarbons, which represent two thirds of fiscal revenues, are expected to help maintain a solid though smaller fiscal surplus in 2013, due to the sharp increase in operating expenses – public sector salaries and pensions – and investment – education, health, infrastructures.
As a source of over 90% of foreign currency earnings, hydrocarbon exports will doubtless make it possible to maintain a very substantial current account surplus, even if it is being eroded. Their growth will more than offset the rise in imports of consumer and capital goods – linked mainly to the Football World Cup – as well as capital outflows in the form of profit repatriation by foreign firms and transfers by expatriate workers.
Foreign debt has grown rapidly since 2008, with development projects financed by international loans. However, as these are productive investments, the debt burden will decline due to surplus growth and exports. In addition, the country has substantial assets abroad (valued at $210 bn in 2012), which makes it a net external creditor.
A solid banking sector but room for improvement in the business environment
With a capital ratio well above Basel II norms, the banking sector is well capitalized, liquid and profitable, with a low rate of non-performing loans. Since the Dubai World financial crisis in 2009, the commercial banks have been more selective in granting loans, whose growth, nonetheless, has benefited the state and the public sector. This could prompt greater transparency on the part of private companies in a business environment where there is room for improvement and marked in particular by considerable administrative obstacles and insufficient investment protection.
Succession through continuity and international compass
Emir Hamad ben Khalifa Al Thani abdicated at the end of June 2013, ending an 18 year reign, in favor of his son. As a result Tamim bin Hamad al-Thani, 33, has become the youngest monarch in the Gulf. The handover of power was accompanied by a significant ministerial reshuffle, introducing a slightly younger governmental team but one that would seem to emphasize continuity overall.
The previous Emir announced elections at the end of 2013 for two-thirds of the members of the Consultative Council (Majlis al-Shura), which only has very limited powers. These elections, required under the 2003 Constitution but so far never implemented, could well once again be postponed.
Insofar as the government has made efforts to spread the benefits of the wealth of the Emirate amongst the population, the uprisings in other parts of the region are thus unlikely to be reproduced in Qatar.
Insofar as the government has made efforts to spread the benefits of the wealth of the Emirate amongst the population, the uprisings in other parts of the region are thus unlikely to be reproduced in Qatar.
Qatar has also been working to extend its presence on the international stage by means of its financial wealth and its Al Jazira television channel, with somewhat uneven outcomes. The Emirate has been acting as a mediator at the regional level, such as in Yemen and Palestine in 2012, and has also adopted an active role and in 2011 joined the NATO military intervention in Libya and, as of 2012, has supported the rebellion in Syria. It would seem however that the new Emir will concentrate as a priority on domestic matters and thus restrain the level of Qatar’s activism on the international diplomatic stage.
Strengths
- World’s third largest gas reserves and world’s leading exporter of liquefied natural gas(LNG)
- Diversification well under way (industry, finance, tourism)
- Net external creditor position, due to extensive assets abroad (mainly via theQatar Investment Authoritysovereign fund).
- Stability of the Sheik Hamad bin Khalifa al-Thani regime and desire to play an international diplomatic role
Weaknesses
- Dependence on hydrocarbon sector (two thirds of fiscal revenues and over 90% of exports)
- Uncertainty over future price of natural gas due tothe shale gas boom
- Dependence on foreign workforce
Dollar amounts given in Billions USD.
Name
|
globalEDGE Industry
|
Sales*
|
Profits*
|
Assets*
|
Market Value*
|
|---|---|---|---|---|---|
| Ooredoo Telecom | Media and Communications | $9.30  | $0.80 | $25.90 | $10.00 |
| Industries Qatar | Chemicals | $5.10 | $2.30 | $11.00 | $26.50 |
| Qatar National Bank | Financial Services | $4.00 | $2.30 | $100.80 | $25.70 |
| Commercial Bank of Qatar | Financial Services | $1.10 | $0.60 | $22.00 | $4.50 |
| Qatar Islamic Bank | Financial Services | $0.90 | $0.30 | $20.10 | $4.60 |
| Doha Bank | Financial Services | $0.80 | $0.40 | $15.20 | $2.80 |
| Masraf Al Rayan | Financial Services | $0.70 | $0.40 | $16.90 | $5.10 |
| Ezdan Holding Group | Financial Services | $0.20 | $0.10 | $10.70 | $11.70 |
 |
| Global Exports in 2008 by Qatar | Market Value: 48,843 (millions) |
| Exports To | Trade Value | Share | Growth |
| (thousands) | (%) | (% 5yr) | |
 Japan | 18,851,353 | 38.60 | 142.34 |
 South Korea | 11,957,816 | 24.48 | 307.66 |
 Singapore | 6,420,385 | 13.14 | 278.82 |
 India | 2,856,799 | 5.85 | 184.04 |
 Thailand | 2,030,264 | 4.16 | 296.75 |
 Belgium | 1,366,712 | 2.80 | 48,585.49 |
 Spain | 1,355,226 | 2.77 | 290.86 |
 New Zealand | 1,083,418 | 2.22 | 1,479.67 |
 United Arab Emirates | 790,078 | 1.62 | 28.23 |
 China | 575,420 | 1.18 | 175.55 |
| Show All Countries |
| Trade Value in (thousands) |
| Last Updated: 03/2010 Data Updated Annually Qatar: Indices
Corruption Perceptions Index (2012-)
DHL Global Connectedness Index Score
Ease of Paying Taxes Rank
Freedom of the Press
Global Competitiveness Report
Global Enabling Trade Report
Index of Economic Freedom
International Logistics Performance Index (LPI)
Inward FDI Potential Index
KOF Index of Globalization
Management Index (Political Leadership Towards Democracy and a Market Economy)
Networked Readiness Index (NRI)
Open Budget Index
Status Index (Political and Economic Transformation)
Additional rankings and indices are available in the Rankings section of the globalEDGE Resource Directory.
Other ResourcesGuide to Business Etiquette in Saudi Arabia and Qatar
This publication of Enterprise Ireland, Guide to Business Etiquette in Saudi Arabia and Qatar discusses how to conduct phone calls, dress, and negotiate in these countries. The site also talks about other cultural differences within the countries. The file opens in PDF format.
Qatar: Doing Business in Qatar
This publication of Enterprise Ireland, Doing Business In Qatar provides information on investment restrictions, company structures, imports and exports, taxation, real estate, free zones, and much more in Qatar. Opens in PDF format.
Qatar: Qatar Chamber of Commerce & Industry (QCCI)
The Qatar Chamber of Commerce & Industry (QCCI) was created to serve the commercial, industrial and agricultural interests of its participants in the private sector. Some of the resources the site provides are a business directory, activities and events, and business news. Site is available in Arabic and English.
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