Economic Environment Of Qatar Economics Essay

In last eight years the economy of Qatar has shown a remarkable growth, according to the report of World Economic Forum, among the Arab economies, Qatar stands first while globally it ranks 17th. Country’s authorities in the financial crisis sought to protect the local banking sector with direct investments into domestic banks. GDP bounced back in 2010 largely due to the elevated oil prices and growth was also supported by Qatar’s investment in expanding its gas sector in 2011. Economy of Qatar mainly concerns developing Qatar’s nonassociated natural gas reserves and increasing investment of private and foreign in non-energy sector. Still Qatar’s more than 50% GDP is from oil and gas and 85% of export earnings and 70% of government revenue are accounted by oil and gas. Due to oil and gas Qatar has highest per-capita income country – ahead of Liechtenstein – and the country with the lowest unemployment. Country has 25 billion barrels of oil in reserve which is equal to 57 years’ output at current level. Qatar also has proved reserves of natural gas exceeding 25 trillion cubic meters which is equal to 13% of the world total and third largest in the world.

Qatar’s economy is mainly based on petroleum which accounts more than 70% of its government revenue, more than 60% of gross domestic product and 85% of export earnings. Qatar promotes investment, innovation, free trade, open competition and access to resources that will continue to bring long-term economic development to Qatar and much-needed energy to the world’s growing economies.

Macro-economic trend

Qatar is now the richest country in the Muslim world. Current GDP per capita registered a world record-breaking peak growth of 1,156% in the Seventies. This became quickly unsustainable and Qatar’s current GDP per capita contracted 53% in the Eighties. But rising global oil demand helped current GDP per capita to expand 94% in the Nineties. Diversification is still a long-term issue for this over-exposed economy.

This is a table of gross domestic product of Qatar at market prices estimated by the International Monetary Fund with figures in millions of Qatari Rials.

Year

Gross Domestic Product

US Dollar Exchange

Inflation Index

(2000=100)

Per Capita Income

(as % of USA)

1980

28,631

3.65 Qatari Rials

53

266.18

1985

22,829

3.63 Qatari Rials

64

104.82

1990

26,792

3.64 Qatari Rials

77

67.85

1995

29,622

3.63 Qatari Rials

85

55.75

2000

64,646

3.63 Qatari Rials

100

86.03

2005

137,783

3.64 Qatari Rials

115

127.05

For purchasing power parity comparisons, the US Dollar is exchanged at 5.82 Qatari Rials only. Mean wages were $59.99 per manhour in 2009.

In February 2012, the International Bank of Qatar reported that GDP grew by 19.9% in 2011, but estimated that 2012 growth would slow to 9.8%.

Economic outlook of Qatar

Currency

Qatari riyal

Trade organisations

OPEC WTO

GDP

$181.7 billion (2011 est.)

GDP growth

18.7% (2011 est.)

GDP per capita

$102,700 (2011 est.)

GDP by sector

Agriculture (0%), Industry (79%), Services (20.9%) (2011 est.)

Inflation

(CPI 2.8% (2011 est.)

Labour force

1.32 million (2011 est.)

Unemployment

0.4% (2011 est.)

Main industrie

Crude Oil Production and Refining,Ammonia, Fertilizers, Petrochemicals,Steel Reinforcing Bars, Cement, Commercial Ship Repair

Export goods

Liquefied Natural Gas, PetroleumProducts, Fertilizers, Steel

Main export partners

Japan 30.3%, South Korea 13.1%, India8%, Singapore 7.7%, United Kingdom4.2% (2010)

Imports

$25.33 billion (2011 est.)

Import goods

Machinery and Transport Equipment,Food, Chemicals

Main import partners

United States 15.5%, Germany 9%,United Arab Emirates 7.3%, South Korea 6.5%, United Kingdom 6.1%,Japan 5.6%, Saudi Arabia 5.4%, Italy5.3%, France 4.5%, the People’s Republic of China 4.2% (2010)

Gross external debt

$82.05 billion (31 December 2011 est.)

Public debt

8.9% of GDP (2011 est.)

Revenues

$112.79 billion (2011 est.)

Expenses

$37.88 billion (2011 est.)

Economic and Social Development

From the time when H.H. the Emir Sheikh Hamad Bin Khalifa Al Thani has taken his position on 27th of June 1995, Qatar has entered into a new era of national work and strategy. From that time, Qatar has made huge steps towards constructing its economic and political structure. Objectives and vision of this new era in Qatar’s modern history has focused on widening public participation in national decision-making processes and emphasizing the role played by the Qatari people in running their country’s affairs. This was realized through strengthening democracy, principle of liberty, and election instead of appointment in many governmental bodies and authorities. For the first time in Qatar, it went ahead to acknowledge and support Qatari women right to be nominated and elected in municipal elections. Furthermore, this new era was designed with elevating interest in Qatari youth through adopting academic and educational curricula that perfectly meet the community needs and satisfy the country requirements for qualified human resources and providing employments for Qatari fresh graduates. It has also approved and implemented a new approach in planning the national economy and exploiting and investing national natural resources. This approach was based on drawing new strategies and long term plans, encouraging private sector, as well as achieving the optimal use of national and expatriate expertise and cadres, and creating good economic climate to tempt investments.

Standard Living of Qatar

In 2007, Qatar has gained records with unprecedented economic growth rate of above 14% per annum. It is expected that this rate is going to head still upward in the next years. Also government spending is increasing; as the state budget has recorded a growth rate of 23.6% in 2007-2008. In 2008, for instance, the state budget has exceeded QAR 72,465.72 billion, compared to QAR 59,901.8 in 2007.

The state of Qatar is considered one of the highest living standard on earth, it has occupied the 33rd rank in 2009 Report of Human Development, issued by United Nations Development Programme (UNDP). The report stated that Qatar has achieved a major achievement when it reached to the 33rd rank

The new ranking shows what Qatar has got in issues related to human development. The report added that human development index in the state has jumped from 0.875 to 0.910. This index reflects progress and improvement achieved in areas related to health, education and GDP. In education sector, for example, the index indicates illiteracy rate going down to 6.9%, while school admission rate goes up to 80.4%, compared to 77.7% in 2008. Furthermore, in health sector, life expectancy rate increased from 75 years last year to 75.5 this year. The state of Qatar has realized a big hike in income per capita which reached USD 74.882 in 2009.

Qatar National Vision 2030

By 2030, Qatar projects to be an advanced society capable of maintaining its development and catering a high standard of living for its entire people. Qatar’s National Vision defines the long-term outcomes for the country and provides a framework within which national strategies and implementation plans can be developed. The National Vision addresses 5 major challenges facing Qatar: 

Modernization and preservation of traditions

Needs of this generation and the needs of future generations

Managed growth and uncontrolled expansion

Size and the quality of the expatriate labor force and the selected path of development

Economic growth, social development and environmental management

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The National Vision foresees development through four interconnected pillars:

Human Development: development of its entire people to enable them to maintain a progress of society.

Social Development: development of a just and caring society based on high moral standards, and capable of playing a significant role in global partnerships for development.

Economic Development: development of a competitive and diversified economy capable of meeting the needs of, and securing a high standard of living for, its entire people both for the present and for the future.

Environmental Development: management of the environment such that there is harmony between economic growth, social development and environmental protection.

Qatar National Vision 2030 was approved by Emiri Decision (44) for the year 2008.