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Qatar National Vision 2030 Economics Essay

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Qatar National Vision 2030, launched in October 2008, builds a bridge from the present to the future. It aims to transform Qatar into an advanced country, sustaining its development and providing a high standard of living for all its people-for generations to come. It foresees a vibrant and prosperous Qatar with economic and social justice for all. It envisages all Qataris working together in pursuing these aspirations, with strong Islamic and family values guiding their collective energies.

QNV 2030 builds on a society that promotes justice, benevolence and equality. It embodies the principles of the Permanent Constitution, which protects public and personal freedoms, promotes moral and religious values and traditions, and guarantees security, stability and equal opportunities. In line with these principles, Qatar National

Vision 2030 (QNV 2030) rests on four pillars:

Human development-to enable all of Qatar's people to sustain a prosperous society.

Social development-to maintain a just and caring society based on high moral standards and capable of playing a prominent role in the global partnership for development.

Economic development-to achieve a competitive and diversified economy capable of meeting the needs of, and securing a high standard of living for, all its people for the present and for the future.

Environmental development-to ensure harmony among economic growth, social development and environmental protection.

QNV 2030 thus defines broad future trends and reflects the aspirations, objectives and culture of the Qatari people. Illuminating the choices available, it inspires Qatari people to develop a set of common goals related to their future, and it provides the framework for Qatar's National Development Strategy 2011-2016.

Qatar's management of its hydrocarbon resources will continue to secure improvements in standards of living, but those improvements cannot be the only goal of society. The National Development Strategy 2011-2016 thus aims to balance five major

challenges identified in QNV 2030:

First, moulding modernization around the preservation of Qatari culture and traditions.

Second, balancing the needs of this generation and those of future generations.

Third, managing growth and avoiding uncontrolled expansion.

Fourth, matching the size and quality of the expatriate labour force to the selected path of

development.

Fifth, aligning economic growth with social development and environmental anagement.

Formulating the National Development Strategy 2011-2016

This National Development Strategy 2011-2016, Qatar's first, is the culmination of extensive stakeholder consultations, dialogues and analyses. The positive and unprecedented engagement of multiple sectoral and intersectoral stakeholders reflects a genuine desire for reform that is in the best interest of the country. The consultation process began with ministers and key leaders from government, private sector and civil society and moved out into society. Reflecting the broad reach of the Strategy, crosssectoral task teams comprised representatives from government ministries, agencies, private companies and civil society organizations. The extensive intersectoral consultations, including interviews, discussions, debates and research, were important for building a strategy that would enjoy strong and positive public ownership from the outset.

The Strategy builds on situational analyses, diagnostics, regional and international benchmarking and detailed strategies for each of 14 sectors. The situational analyses identified priority areas using baseline analyses of Qatar's situation and benchmarking against best practices in other countries, both in the region and around the world. The 14 sector strategy reports identify the priority areas and the many transformation initiatives to support each proposed programme and project, including core requirements, esponsibilities, timelines and key indicators.

Aligned to the QNV 2030 goals, the programmes and projects identified in the National Development Strategy 2011-2016, including outcomes and targets, are from the 14 sector strategies. Developed through an extensive consultative process and taking into account the many cross-sectoral links, the strategies provide profound and transparent analysis, benchmarking, diagnostics and priorities for each of the programmes and projects at a much more detailed level than is possible in this Strategy.

The targets in the Strategy, a subset of those in the sector strategies and developed with stakeholder inputs, focus on the results to be achieved by 2016. Both quantitative and qualitative, they will be reviewed and refined, as necessary, by key stakeholders at the beginning of programme and project implementation.

The sector strategies provide indicative resource requirements for each programme and project- identifying the key stakeholders in the projects and the risks and mitigation measures for successful implementation. Especially important, each strategy contains a basic monitoring and evaluation framework, supported by selected monitorable indicators, to enable adjustments during implementation.

Qatar's National Development Strategy 2011-2016 is a plan of action. It presents new initiatives while building on what already exists. For projects, policies and institutions already under way, it provides added impetus and focus.

Achievements and the outlook for 2011-2016

Qatar has built a solid foundation for embarking on the National Development Strategy 2011- 2016. Rapid growth in the 2000s, the fastest in the world, has given Qatar one of the world's highest levels of per capita income (measured in purchasing power parity terms). High saving, both private and public, has been reflected in substantial domestic investment and the accumulation of a substantial pool of foreign currency assets.

To meet new demands in a more complex economy and to strengthen performance, Qatar has embarked on a variety of reforms. The reforms aim to bring together decisions of national significance within an integrated framework for making deliberate and concerted choices about Qatar's future. At an operational level the reforms emphasize improvement in public services and delivery of "value for money", thereby enhancing opportunities and conditions for the country as a whole as well as for individual citizens. By clarifying national development priorities and direction, the reforms provide greater predictability for the private sector and civil society, leading to better alignment of interests across the country.

A significant rationalization of the functions and roles of ministries and agencies is under way, aimed at promoting tighter policy cohesion, improving service delivery, eliminating waste and enhancing public sector accountability and performance. Implementing these changes across the whole of government is now proceeding, with the General Secretariat of the Council of Ministers having been given the mandate for planning and performance monitoring across government. An initiative of particular importance is the expansion of the role of the former Ministry of Finance to include economic policy support, advice and coordination. In recognition of this expanded mandate, the Ministry was renamed the Ministry of Economy and Finance in 2008.

To look ahead towards the longer run development needs of the state, the General Secretariat for Development Planning was created in 2006 and given responsibility for managing longer term development planning. It was mandated by Emiri Decisions 39 and 50 to coordinate the formulation of QNV 2030 and to support implementing ministries and agencies in executing it. QNV 2030 was completed in 2008, and now, this document, Qatar's first National Development Strategy 2011-2016, has been formulated

and approved by the country's high authorities.

The trajectory of Qatar's economy is tightly linked to developments in the hydrocarbon sector. Hydrocarbons still dominate the economic landscape, but Qatar is branching out into new areas.

A supply of cheap hydrocarbon feedstock and energy has helped prime the development of downstream industries in the petrochemical and metallurgy sectors, with some subsectors, such as fertilizers, growing at a fast clip. A foothold has also been established in new areas, including air transportation and media services. The Qatar Science and Technology Park now tenants more than 30 ventures in such areas as life sciences, oil and chemicals, environment, electronics and software engineering. Qatar's financial sector has also seen rapid development serving the needs of a larger and more complex economy.

Physical investments have fast caught up with needs. Bottlenecks in infrastructure, which contributed to high project costs and inefficiencies, are being tackled across a broad front. Investments in healthcare have been significant, supporting workforce productivity and fostering social cohesion. Thanks to the heavy investments in high-quality health services and delivery systems, mortality levels have declined markedly, and the prospects of survival at vulnerable ages have improved. A diverse complex of health facilities now meets widely divergent and often highly specialized needs, supported by more than 13,000 personnel, almost all with specialist medical and technical skills.

Education and training investments have also been significant. Recognizing deficits in its education system and in broader capabilities within the country, Qatar has invested heavily. Government education spending has steadily increased to about 5% of GDP in 2008, making Qatar second only to Saudi Arabia among Gulf Cooperation Council countries on this metric. Tertiary initiatives include expanding the Qatar Foundation Campus, reforming Qatar University, creating a new community college and introducing

vocational and technical education streams.

Although these new directions are expected to be beneficial and support QNV 2030, they have suffered from a lack of integration and alignment. In addition, some measures have taken place only on paper or suffer from lags in implementation. While Qatar's National Development Strategy 2011-2016 will leverage existing initiatives, it must also provide a framework that can fill gaps and provide effective integration and alignment across sectors.

Economic outlook broadly favourable

Qatar's economic outlook for 2011-2016 is broadly favourable, with the global recovery continuing, thanks to robust growth in emerging markets and rebounding world trade. The growth of hydrocarbon income will tail off in 2012-2013 as Qatar's highly successful 20-year investment programme in hydrocarbons culminates. Further significant investment in hydrocarbons must await expiration of the moratorium on production in the North Field, which is not expected before the end of 2015. Declines in crude oil production can also be expected as 2016 approaches, though efforts are under way to stem them.

While growth in 2012-2016 will be at a lower pitch than in the earlier years, income levels will remain high, and robust expansion of the non hydrocarbon economy will help support aggregate GDP growth. Transport and communications, along with business and financial services, could grow vigorously. Construction will grow steadily, and manufacturing performance should improve. With the non hydrocarbon sector expected to pick up the reins, aggregate GDP growth in 2012-2016 is expected to average just over 5%, but with virtually no contribution coming from hydrocarbons. The real domestic income generated by this growth will still depend on the trajectory of hydrocarbon prices, which have a decisive influence on Qatar's terms of trade. The baseline assumes some modest gains over average prices in 2010.

Qatar's investment pattern will reflect the decline in hydrocarbon capital spending. During 2011- 2016, total gross domestic investment might be about QR 820 billion. Of this amount, perhaps half will come from the nonhydrocarbon sector. Central government ("public") investment is estimated at QR 347 billion. Based on current plans, public infrastructure spending will peak in 2012. This trajectory reflects existing plans for the launch of mega projects.

The government's fiscal position is expected to remain strong and will certainly be adequate to support future capital investments and the initiatives under the National Development Strategy 2011-2016. Gross national savings are likely to remain above 40% of GDP through 2014, but might edge down in the later years. The overall fiscal balance would narrow from current highs to around 6% of GDP by 2016, still very healthy. Double- digit surpluses could be maintained if revenue sources expand. The current account balance will remain firmly in surplus.

Modest increases in population will accompany the expected economic expansion. The total population of Qatar is expected to grow steadily at an average of about 2.1% a year during 2011-2016, with the total population rising from 1.64 million at the end of 2010 to just less than 1.9 million in 2016. The rapid population growth of the recent past is not expected to continue. This assumption aligns with the conjectures on output growth (above), but sees some advances in productivity, reducing employment per unit of output. The assumed structural shift to higher valued economic activity presupposes steady advances in the skill content of the labour force and further capital deepening.

Swing factors could change the outlook

Predicting the future is always a hazardous activity, and some swing factors could materially change the outlook. Of particular interest to Qatar is the outlook for hydrocarbon prices. For a hydrocarbon- based economy like Qatar, a future of low hydrocarbon prices (at least in the medium term) would have a considerable impact on the financial resources available, with implications for sustainable growth paths.

A view that crude oil prices will average about $74 per barrel during 2011-2016 alters the baseline outlook (which assumes an average of $86 per barrel). Applying the lower oil price assumptions suggests that the average nominal GDP level would shrink 2% relative to its baseline level by 2016. With expenditure more or less tracking GDP as in the baseline, the overall fiscal balance narrows. By 2016 the assumption of lower oil prices cuts the overall fiscal balance from just under 6% of GDP to about 4%

Gas prices could be an even more significant swing factor. In spot markets, gas and oil prices have uncoupled. Although Qatar is shielded from short-term fluctuations in spot gas prices through its long-term agreements with purchasers, prolonged weaknesses could put the price of Qatar's liquefied natural gas price basket under pressure. If gas prices are assumed to fall by 30% from their baseline (a modest decline compared with what has been experienced in spot markets) negative income and fiscal effects would follow. Because the share of liquefied natural gas in total output will rise over the period, the impact of falling prices on income is large. Cumulative losses over the period are QR 357 billion, a 9% reduction from the baseline level of cumulative GDP. The overall fiscal balance under these assumptions for lower gas prices, with expenditure held steady, could be reduced to 3.4% of GDP by 2016, more than 2 percentage points lower than the baseline.

In addition to coping with uncertainty, Qatar will face hard constraints on human and institutional resources that could affect implementation of the National Development Strategy 2011-2016. Qatar needs strengthened public sector institutions to achieve the goals of QNV 2030. That will require concerted institutional and organizational capacity building, efficient and transparent delivery of public services, fruitful public-private cooperation and partnerships as well as a vibrant climate for business and a larger space for civil society.

FIFA World Cup 2022 and higher government spending?

Hosting the FIFA World Cup 2022 presents Qatar with new opportunities. Over the early part of 2011- 2016 the economic impacts of the World Cup are likely to be modest, but Qatar must prepare for the sizeable investments in infrastructure that will follow. These investments will be significant relative to the size of the economy, and their macroeconomic and longer term development impacts warrant close attention. Well beyond 2022, the World Cup may present opportunities to strengthen the structure and performance of Qatar's nonenergy sectors.

In the immediate future (2011-2012) the World Cup could affect trade and speculative investment. The impacts would likely be temporary, and the government will monitor them to prevent abuse of market power and protect the broader public interest.

From the perspective of Qatar's economic diversification ambitions, the World Cup presents new opportunities for the country. Public-private partnerships may benefit some projects and should be considered within wider public investment decisions. On the business front the World Cup will create opportunities for domestic enterprises to form

strategic alliances externally and to connect to global value chains. The World Cup will also accentuate some challenges. Qatar should leverage the World Cup to close gaps in its capabilities. For example, investment agreements could include mechanisms that secure knowledge and technology transfer.

As mentioned, though some World Cup-related investment projects may be commissioned during 2011-2016, the added impact of World Cup activity during this period is likely to be modest. A sizeable pipeline of investments is already in place. In general, the macro-fiscal framework suggests that additional investment spending (whether public or private) is likely to have only a moderate shortrun demand impact on local output and income.

After 2012, when the current expansionary phase of hydrocarbon development ends, calculations suggests that the structure of Qatar's economy will be such that 5 percentage points of additional public sector investment spending would be needed to generate a 0.5 percentage point temporary acceleration of growth in nonhydrocarbon output. The domestic income generated by added capital spending is diluted because a high proportion of the spending is likely to be on imports (capital goods and materials as well as consumption) and because a large share of wage income earned by expatriate workers is likely to be remitted rather than spent locally.

The fiscal impacts of higher public investment spending could be significant because it is unlikely to generate much of a tax offset. There is also a risk of inflationary pressures if the phasing of large-scale projects creates or aggravates supply bottlenecks.

During the period covered by the National Development Strategy 2011-2016, preparations for the World Cup will gather momentum. Institutional arrangements for overseeing and managing World Cup-related activities will be established, and the pipeline of investments to deliver needed infrastructure services will be prepared. From a planning perspective the World Cup is best considered within the broader framework of national development and not as a one-off event. Integrating planning and funding arrangements within broader frameworks for the overall fiscal and budgetary management of the economy will be important. A beneficial legacy will require scrutiny of large World Cup-related capital projects for their long term socioeconomic and environmental impacts.

Sustaining economic prosperity

QNV 2030 articulates three interrelated goals for the economy. It looks to sustain a high standard of living, to expand innovation and entrepreneurial capabilities and to align economic outcomes with economic and financial stability.

It defines sustainability as meeting the needs of the current generation without compromising the ability of future generations to meet their needs. To embed sustainability in Qatar's economy, progress is needed in three parallel, mutually reinforcing directions. First, the country will enlarge the value of the productive base, which is necessary to sustain prosperity in a growing population and to expand potential for future generations. Second, the government will guard against economic instability and promote increased efficiency. Third, the government will work in partnership with the private sector to diversify the economy and encourage a culture of innovation

and discovery.

Expanding the productive base

The need to grow the productive base places speed limits on what the country can consume while preserving wealth for future generations. As Qatar's hydrocarbon income tapers off (either through declines in production or reduced unit rents), alternative sustainable sources of income must be created to support public consumption and cover Qatar's import bill. This will require high rates of saving and a steady flow of dividends on investments for the foreseeable future. A conjunction of far-sighted depletion policies, sound fiscal management and wise investment will support sustainability.

Qatar's planned investments in physical and social infrastructure are an essential part of a broader strategy to ensure continuing expansion of its productive base, and to attract further investments from the private sector. Qatar's infrastructure needs will in general be well met through 2016. Major investments are in the pipeline, and attention is being given to areas where the country must catch up (as in roads, industrial land and information and communication technology). Qatar's investment in foreign currency assets is also an important part of its broader strategy to diversify its future income base.

Because Qatar's hydrocarbon assets are property of the state, the government has a responsibility to maximize the value it captures from their exploitation. It may do this through fiscal measures, contract arrangements or some combination of both. In principle, the state will strive to capture all rents embodied in the mineral assets it owns and to ensure an adequate return on any capital that it invests. If hydrocarbon rents are efficiently targeted, the volume of private investment should not be affected (investment neutrality) because private investors will still earn their required risk-adjusted rate of return. But while the principle of optimal rent capture and investment neutrality will continue to serve as a useful guideline, pragmatism will require the application of frameworks that reflect reality and can be implemented.

In the future, as in the past, the government will ensure that the structures governing hydrocarbonlinked investments, upstream and downstream, provide adequate flexibility to deal with project specifics and changing cost or market conditions. Equitable risk-sharing arrangements will also be important. While the state will take all steps to eliminate sources of risk within its control, the elimination of operational or commercial risks through state guarantees or other means will be detrimental if it dilutes incentives for the private sector to perform. In cases where hydrocarbon rents are shared with private investors, the state will seek to ensure that these rents are compensated by other benefits that flow to the country (such as the acquisition of technology, infrastructure or knowledge and skills).

Qatar will leverage its cheap domestic feedstock and energy to contribute to the expansion of its productive base and long-run diversification. The relevant test is that associated investments provide an acceptable risk-adjusted return on the totality of the resources committed by the state. Several opportunities exist. Industries that gain advantage by eliminating transport and distribution costs and relocating closer to sources of energy and feedstock provide one avenue for investment. Another long-term opportunity would be to integrate along the energy supply chain. For example, Qatar might export surplus power generated from gas to the region and beyond. Potentially Qatar enjoys advantages in areas that would be viable even if the country had no domestic hydrocarbon production. Qatar has an established advantage in production and transportation and a potential advantage in vertical integration of connected activity in distribution and storage.

Qatar Petroleum Industries and other entities in the energy sector have performed well in spearheading investments, but as Qatar works to diversify its economy beyond carbon, a strengthened policy and coordination function may be useful. In some other countries high-level independent agencies have played central roles in advising government and in implementing investment and industry development policies.

Enhancing economic stability

Hydrocarbon dependency exposes Qatar to gyrations in global energy markets, leaving economic planning prey to high levels of uncertainty. For a hydrocarbon-exporting economy such as Qatar, energy price shifts hit the fiscal revenue stream directly, creating ripple effects throughout the economy. The inherent unpredictability of energy prices makes it particularly difficult for policy- makers to judge the most constructive fiscal stance. There is always the risk that errors in fiscal calculations accentuate volatility. Given the unpredictability of global oil prices, it is virtually impossible to know whether price changes are temporary or lasting. Recognizing the challenges, and the need for high levels of saving and a broader fiscal base, the government will launch a budget reform programme, built around a reorganization of the Ministry of Economy and Finance. The key goal is successfully implementing a comprehensive legal and budgetary framework for public finance, consistent with the Permanent Constitution.

A fiscal transformation programme with five core elements will support this goal:

• A new budgetary law embodying the principles of efficient public finance.

• A functional classification for all spending using the United Nations Classification of Functions of Government to support sector wide and programmatic budgeting.

• A macro-fiscal framework that helps decision- makers analyse the fiscal and macroeconomic implications of commitments they are considering.

• A public investment programme to ensure that capital projects deliver the highest social worth and are well coordinated.

• A monitoring and evaluation function.

Meeting these commitments over the next six years will require institutional adjustments and concerted capacity strengthening, as well as the recruitment of technical experts in the Ministry of Economy and Finance and in line ministries and agencies. Partly because of limited expertise in Qatar in macro-fiscal policy and strategic and operational planning, the five-step programme will be rolled out gradually, at a pace the Ministry of Economy and Finance and other arms of government can manage.

A coordinated public investment programme will strengthen the government capital budget by ensuring that project objectives are aligned with the National Development Strategy 2011-2016. It will preserve and expand national wealth through the rioritization and selection of capital projects that create lasting value. It will address trade-offs among potential investments, committing resources where the benefit is greatest.

There are five basic requirements in establishing the public investment programme:

• Formalize the programme through relevant laws and instruments.

• Create public investment units within suitable agencies, with capable staff.

• Establish supporting processes and systems, including technically sound appraisal and evaluation techniques.

• Implement capacity-building initiatives to strengthen project preparation, implementation and evaluation skills.

• Pilot projects to test and refine key features of the public investment programme system.

On a case by case basis, private sector participation in public projects may prove beneficial. An increased private sector role can improve project and investment planning, management and operations. The government will ensure that public-private partnerships fit within the larger investment plan and provide a pathway for the transfer of skills to the country.

The requirements to establish an effective public investment programme process are similar to those to support budgetary reform. New systems and processes will be required in the central functions of government and in the line ministries and agencies making major capital spending decisions. New legal and regulatory infrastructure may be needed to support new roles, decision processes and institutional relationships.

Other avenues for enhancing stability will receive attention. The Ministry of Economy and Finance and Qatar Central Bank will work together to develop deeper and more liquid money and bond markets. The monetary and liquidity implications of fiscal and state-linked spending and investment decisions need to be better coordinated. The possibility of establishing a new financial mechanism to support fiscal stabilization objectives will also be considered but cannot substitute for sound fiscal policy.

Enhancing efficiency

Opportunities for efficiency gains proliferate, cutting across sector boundaries. By attacking inefficiency in technology, physical infrastructure, institutions and processes, the government can make a lasting contribution to improve the use of resources over time. With an abundance of hydrocarbon resources but a scarcity of other vital resources such as water and arable land, a drive for efficiency is central to creating and capturing value, preserving and expanding the productive base and encouraging the private sector to develop through discovery and economic diversification.

Improved efficiency has other benefits, too. By improving the use of capital assets, efficiency measures save fiscal resources by deferring or eliminating the need for replacement investments or capital expansion. Some efficiency gains reduce waste and unwanted by-products such as carbon dioxide emissions and waste water, contributing to environment goals.

Few tangible aspects of Qatar's life and economy are as in need of efficiency reforms as water- crucial to all human activity but in scarce supply. Large volumes of desalinated water (which is expensive to produce in terms of power) are lost in distribution. Precious aquifer water is largely wasted through open field irrigation methods for crops of low value. Large volumes of wastewater go uncollected, untreated and unused.

Qatar's National Development Strategy 2011-2016 identifies a range of initiatives to tackle technical and economic inefficiencies in the production, distribution and use of water. The implementation challenges of water-saving initiatives vary. Stemming losses in the distribution system involves essentially technological fixes. Introducing water saving devices to households is fairly straightforward, as Abu Dhabi and Canada have shown. Encouraging the use of water-saving appliances will require effective communication, but might also need supporting incentives. Water subsidies eclipse the scarcity and true value of the resource and contribute to overconsumption and waste. User charges that more accurately reflect full economic costs could make a significant contribution to redirecting Qatar's precious natural resources to higher value uses. Such efforts might be initially targeted at the non-Qatari population and industrial and commercial users.

Changing water consumption patterns in agriculture is vital to an integrated approach to water management, but it will require a fundamental and prolonged reorientation of farming, involving a range of factors including government subsidies. Recharging the aquifers with treated sewage effluent (if shown to be technically feasible) would ease the looming water scarcity. But without changes in irrigation methods and crop mixes, farming would continue to make heavy demands on Qatar's precious water resources. The government is committed to addressing this challenge and finding solutions within a wider programme of agricultural reform and the development of an agro-food industry.

A fully integrated approach to water management and a rethink of regulatory approaches are necessary to address these challenges. By 2014 Qatar will have established an independent regulator to help accelerate reforms of the water sector. As desalinated water is coproduced with power, these new regulatory arrangements will be integrated with those for power.

Although the country's power needs are fully served by a high-quality and reliable service, Qatar could achieve greater efficiencies through technical enhancements. Together, the changes could substantially cut domestic gas consumption. Although Qatar's abundant gas supplies are expected to last well into the future, improved efficiency creates both environmental and economic gains. By burning less natural gas, Qatar would support the national goal of lowering carbon dioxide emissions, thereby reducing the country's contribution to global climate change. Gas saved at home can be sold overseas, increasing national income.

Infrastructure projects that commit significant financial resources will be reviewed within the framework of Qatar's new Public Investment Planning process. From a national development perspective an integrated portfolio view of proposed capital projects will consider their engineering, financial, economic, social and environmental dimensions within the wider context of development needs and priorities. As noted earlier, Qatar's infrastructure needs through 2016 will generally be well served by high-quality infrastructure. But some projects in the national infrastructure pipeline appear to risk capital commitments that could be substantially in excess of what is required to meet needs (including allowances for uncertainty and adequate safety buffers) well into the future. A review to identify and eliminate these inefficiencies presents an opportunity for early wins for the National Development Strategy.

Ongoing initiatives to improve regulatory and procedural efficiency will be strengthened, including those in the areas of foreign investment, implementation of competition legislation and customs regulation. Efforts will also continue to enhance the quality of regulation in other areas, such as industrial land.

Building a diversified economy

Having achieved enormous gains by developing the hydrocarbon sector, the government is poised to take on another significant challenge-diversification.

A more diversified economy is inherently more stable, more capable of creating jobs and opportunities for the next generation and less vulnerable to the boom and bust cycles of oil and natural gas prices. Qatar, like other countries seeking diversification, will build on areas of strength and potential.

Investing hydrocarbon income in foreign currency assets presents one important avenue for diversifying Qatar's income. But exclusive reliance on foreign currency asset income will not constitute a viable, long-term development strategy. It would create new types of risk, leaving Qatar prey to the vicissitudes of international capital markets. And it would not address Qatar's ambition to become an inquiring, innovative and creative society. The development of a more diversified domestic economic base, with knowledge activities in generating productive and remunerative jobs, is necessary to expand capabilities and support wider societal objectives.

Diversifying the domestic output base is not a stroke of- the-pen shift. Entrepreneurship and innovation need to be learned, embedded in the education system and in the surrounding culture and supported through business friendly policies and regulations. Qatar's private sector will need strengthening, with support and incentives that encourage the acquisition of relevant capabilities and active participation in a wider range of economic activities.

Qatar is not alone in seeking a broader economic base. Other natural resource-based economies around the world are trying to do the same. Within

the Gulf Cooperation Council, Bahrain and Saudi Arabia are working on strategies to encourage more diverse economies. Abu Dhabi also has a

comprehensive plan.

The fact that other countries are pursuing diversification strategies creates opportunities for crosscountry learning. But there are also risks. Many the Gulf Cooperation Council countries are focusing on diversification in the same areas, including petrochemicals, air transport, logistics, real estate, knowledge services, finance, life science and telecommunications. Depending on how these strategies evolve, the Gulf countries face the risk of channelling resources into the same sectors, with each country falling short of achieving an efficient scale of production.

To accelerate the diversification agenda, the government will address the constraints that impede economic discovery and the birth of new economic activities. The government fully recognizes that it must ensure macroeconomic stability, regulatory coherence and the effective delivery of infrastructure services (all examined above) to stimulate investment. In addition, the push to build a more diverse economy will require that special attention be directed to four areas that frustrate innovation and enterprise start-ups: low demand for skills amid surplus labour; a weak private sector and low levels of entrepreneurship; limited capabilities of discovery and innovation; and weak regional integration and connectivity.

A variety of institutions will contribute to Qatar's diversification drive. These include Enterprise Qatar, the Qatar Foundation, in which the Qatar Science and Technology Park is housed, the Supreme Council of Information and Communication Technology (ictQATAR), the Qatar Financial Centre and Qatar Development Bank. The strategies and programmes of these institutions and the National Development Strategy 2011-2016 must be mutually supporting.

Among other initiatives to stimulate diversification, a national plan will be prepared to accelerate the achievement of Qatar's research and development

target of 2.8% of government revenues. To promote the development of the knowledge economy and knowledge businesses, new forms of public- private partnerships will be trialled through a portfolio of pilot projects led by the Qatar Science and Technology Park. Efforts to support private sector development will be redoubled through new services provided by Enterprise Qatar and Qatar Development Bank, that will target small and medium-size businesses. ictQATAR will initiate projects that will ensure that Qatar is ready for the digital age. To address the constraints imposed by geography and scale, the government will leverage opportunities to strengthen regional integration and connectivity.

But ultimately, the success of Qatar's efforts to graduate from an economy based on non-renewable resource inputs to one in which productivity growth and eventually innovation underpin prosperity will require fundamental policy shifts that alter the incentives facing its citizens. To expand opportunities for citizens and to build local capabilities, Qatar must start the process of transforming itself into a high-wage private sector economy.

Promoting human development

The human development pillar of QNV 2030 calls for the "development of all its people to enable them to sustain a prosperous society" and "to meet the needs of this generation without compromising the needs of future generations". Qatar will continue to invest in its people so that all can participate fully in the country's social, economic and political life and function effectively within a competitive knowledge-based international order. It is putting in place advanced health and education systems that meet the highest global standards. It is also supporting the productive participation of Qatari men and women in the labour force, while attracting qualified expatriate workers in all fields, with a growing emphasis on the higher skilled.

This National Development Strategy 2011-2016 identifies the challenges in health, education and productive work. It also presents plans for meeting those challenges by nurturing a healthy, long lived population, building world-class knowledge and skills and fostering a capable and motivated workforce.

Nurturing a healthy population

Qatar is committed to building a world-standard people-centred integrated healthcare system with policies and care designed to meet the needs of its population.

The national health sector strategy-which builds on the Supreme Council of Health's Qatar National Health Vision 2020: Caring for the Future-Establishing a Healthy, Vibrant Society-provides a practical guide for reforms, with far-reaching and fundamental changes envisioned across the healthcare system. It seeks to improve health outcomes by establishing a modern and comprehensive health care system with effective and affordable services for the whole population.

The system will span physical and mental preventive and curative healthcare, taking into account the specific needs of men, women and children. High-quality services will be offered through public and private institutions operating under the direction of a national health policy that sets and monitors standards for social, economic, administrative and technical aspects of healthcare. High calibre research will be directed at improving the effectiveness and quality of healthcare.

To deliver integrated services, Qatar's national health sector will shift the balance towards a preventive, community-based model of care, focusing

on the patient and ensuring access to the right care, at the right time, in the right setting, by the right team. The model will provide a full continuum of care anchored on capable and trusted primary care providers in a healthcare system offering the highest quality diagnostics and treatment.

Building knowledge and skills

As the Qatar economy diversifies from its reliance on gas and oil, success will depend increasingly on the ability to compete in a global knowledge economy. Continuing substantial investments in educating and training of Qataris will be critical to achieving the goals of the National Development Strategy 2011-2016. Beyond preparing citizens to be part of the country's economic engine, education and training offer multiple benefits to society.

Education provides a solid grounding in Qatari religious, moral and ethical values, in national identity and in traditions and cultural heritage. Schools produce well-rounded and engaged citizens and build more cohesive and participatory societies. Education also helps people make better decisions about health, marriage, parenting and social responsibility. Finally, a successful education strategy supports innovation in science, medicine and industry.

Qatar has made great strides towards creating a world-class education system, through the Education for a New Era reforms, begun after the Supreme Education Council was established in 2002, and the reforms of Qatar University, begun in 2003. In addition, Qatar Foundation's Education City has continued to expand and progress over the past decade, with the establishment of a cluster of top-class international universities that are helping to make Qatar a regional leader in innovative education and research.

Qatar's education and training system will become more integrated, stretching from early childhood education through to higher education and additional training. Engrained in this system is the concept of lifelong learning, with individuals encouraged to acquire education and update their skills throughout their lives. This continuum spans three education sectors: general education (kindergarten through grade 12), higher education, and technical education and vocational training. While each sector has a distinct identity, mission and function, the three sectors need to operate within an overarching framework that embodies policy-related principles. And both education and training must establish stronger links with Qatar's labour market.

Further reform of Qatar's education and training system will address quality, equity and inclusiveness, and portability and mobility. These themes will guide policy decisions, along with variety and choice. Strengthened reforms will tackle a number of critical challenges and opportunities affecting both supply and demand for education and training. These include the underachievement in math, science and English language at all levels, and the need to strengthen education administration and the teaching profession. The educational curriculum needs to be more aligned to the needs of the labour market while being supportive of Qatari values. The system needs to offer multiple pathways beyond secondary level to encourage a higher continuation rates.

Quality is critical in ensuring outcomes that address the needs of current and future labour markets. The challenge arises in achieving consistent and sustained quality across sectors. High-quality teachers, trainers and lecturers are a prerequisite, making it mandatory that all sectors monitor teacher training, qualifications and professional development. The current high turnover of Qatari and expatriate teaching staff must be reduced.

To realize Qatar's vision of providing opportunities for citizens to achieve their full potential, Qataris must be able to move easily among education and training options and between those options and the workplace. No longer can education pathways be considered a linear progression through a vertical hierarchy of qualifications. Both vertical and horizontal pathways are needed, within and between sectors and institutions. A National Qualifications Framework will strengthen coordination and integration of the education and training systems.

Qatar has invested heavily in the best models of education pratice and will continue to strive for optimum adaptation and consistency between basic and higher education. This will ensure that a more diversified economy has access to workers with the required skills, while maintaining respect for Qatari cultural values and national heritage.

Integrating sound social development

Qatar's social development policy requires coordinated integration of five interrelated policy sectors: family cohesion and women's empowerment, social protection, public safety and security, and sports and culture. The aim is to bring different programmes, target groups and societal interests under a single framework to support the QNV 2030 social development pillar-to make Qatar a more caring and cohesive society built on sound social principles, for current and future generations.

Integrating the policies of multiple interrelated ectors within one strategy will benefit Qatar in many ways as it pursues a progressive and modern social agenda while upholding traditional family and cultural values. This approach will ensure careful consideration and proper respect of traditional Qatari culture and Arab identity, even as necessary advances are made in social equality, protection and justice. Qatar's families must remain strong and cohesive and provide a supportive environment for all. At the same time, women must be given more opportunity to contribute to the economic and cultural world without diminishing their role in the family structure.

Just as all elements of a family must work together to build a solid and stable household, all elements of a social structure must work together to build a solid and stable society. The objectives for a forward- looking integrated social development policy will be achieved through cross-sectoral strategies with the human, economic and environmental development pillars.

Strengthening family cohesion

The family is the basis of Qatari society, the foundation for all aspects of Qatar's social structure. A dedicated commitment to marriage, a keen understanding of personal responsibility, an appreciation of traditional values, a strong bond between parent and child, a sense of mutual respect among all men, women and children-these are the characteristics of healthy, cohesive families.

Qatar's strong Arab and Islamic identity pervades all aspects of family life and continues to inform the family structure, but changes brought on by external pressures and internal evolution are changing family dynamics. The changes point to a society that is expanding its cultural imprint and progressing in positive ways while staying true to its Arab identity. Women are central to this positive, evolving nature of the Qatari family. Even as they maintain an adherence to valuable traditions, women are adapting to the impacts of modernization. They exemplify the new opportunities available to all Qataris as a result of the country's rapid economic growth and social transition.

Traditional methods of family support, care and unity will not be lost, even as Qatari society adjusts to new global realities. The government will work to assist families in caring for their members and maintaining moral and religious values and humanitarian ideals. The government will also show an increased dedication to enhancing women's capabilities and empowering them to participate more fully in the political and economic spheres.

The National Development Strategy 2011-2016 advocates for the adoption of a holistic approach to child well-being. This approach will enable Qatar to interweave important policies to create a coherent spectrum of programmes for children of different ages to increase child well-being, leading to better human capital outcomes.

Safeguarding social protection and promoting inclusive development

The social capital of Qatari society includes the institutions, relationships, attitudes and values that govern interactions among people and contribute to economic and social development. In these interactions, families are important and critical, but they are complemented by the wider community, including public and private institutions. During times of rapid modernization and development, social capital can change, potentially affecting those vulnerable to diminished income. Protecting individuals from risks that may affect their abilities to contribute to society and offering assistance to individuals in need are the central components of Qatar's commitment to community care and career support.

Through the National Development Strategy 2011-2016, the government will make a firm commitment to establishing a social protection system that preserves the civil rights of all citizens, values their contribution to society and ensures an adequate income for them to maintain a healthy and dignified life. The current system provides generous support to citizens through various means, but it will be strengthened to ensure that all members of society, including the vulnerable and needy, have the opportunities to succeed through expanded employment opportunities in an inclusive society.

In promoting moves from welfare to work, the government aims to create an enabling environment to protect the disadvantaged and vulnerable and to give them an opportunity to support themselves and their families.

Efforts will also be made to broaden partnerships, involving the private sector in the social protection system. Common strategic directions and sustainable solutions will be identified through Qatar's corporate responsibility framework, sealing partnerships between the private sector and government and stakeholders of the social protection system.

Enhancing public safety and security

Just as Qatar has a duty to provide its citizens with a secure and stable society based on strong families and an inclusive social protection system, it has a duty to provide its citizens with a secure and stable society based on effective public institutions that guarantee public safety. A society that cares for its citizens in a respectful and dignified way is a society that operates on the principles of justice, equality and the rule of law. Qatar is committed to being such a society.

Qatar's recorded crime rates are among the world's lowest, despite a massive increase in the country's expatriate population. In 2010 Qatar ranked first within the Arab region, and 15th of 149 countries globally, on the Institute for Economic and Peace's Global Peace Index (GPI), which takes into account public safety and security and the country's external relations.

Qatar's National Development Strategy 2011-2016 for enhanced public safety moves beyond the traditional security concept to embrace the concept of human security and expands the scope of protection.

The public safety and security sector's efforts and performance will be enhanced through a programme to improve the management of crime data. It will strengthen the evidence base for improved policy-making in support of Qatar's criminal justice system.

Promoting an active and sporting society

QNV 2030 aspires to build a safe, secure and stable society and firmly commits to creating a vibrant and prosperous future for the country. From a social development perspective, fulfilling that vision begins with strengthening families and ensuring that all citizens are protected in their homes, jobs and communities. The next step is to ensure long-term excellence beyond the essentials of family and finances by enhancing the physical, emotional and intellectual well-being of individuals, especially youth, through sports and culture.

Preserving and leveraging Qatar's heritage and culture

Despite rapid socioeconomic change over a relatively short period, Qatari society has maintained the essence of its culture and continuity with the past. This continuity includes observing the fundamental principles of Islam, maintaining the inherited status and prestige of the leading families and preserving the family unit as the core of society. A primary and persistent challenge is to maintain a proper balance between modern life and the country's cultural and traditional values.

Qatar is meeting this challenge in many ways, through cultural exchanges, athletic competitions, enriched academic curricula targeting artistic development and more. The Doha Capital of Arab Culture 2010, for instance, was a successful, year-long event celebrating the arts, music and film through conferences, cultural summits and mutual knowledge sharing. Qatar is also increasing attention to its own history through enhanced preservation of heritage sites and an ongoing commitment of resources to new museums and education programmes.

Managing environmental development

Qatar's National Development Strategy 2011-2016 for the first time explicitly aligns the growth of national prosperity to the realities of environmental constraints. By establishing a programme of strengthened environmental management across economic and natural resource sectors, the Strategy sets out a framework for continuing economic growth that avoids penalizing future generations. Advancing specific actions to conserve water, improve air quality, manage waste and protect biodiversity, the Strategy adheres to the foundational concept of intergenerational justice.

The strategy for environmental management calls for interrelated actions that cut across all areas of environmental management. Setting specific targets, it establishes a comprehensive programme to preserve the quality of life for future generations.

Water will be better conserved and protected from degradation. Gas flaring will be reduced. Expanded recycling will greatly improve solid waste management. Careful monitoring and regulation will protect vulnerable species and broadly preserve Qatar's natural heritage. Urban spaces, subject to intense construction over the past decade, will be healthier and more liveable as green spaces are added.

Cleaner water and sustainable use

Among the various environmental concerns facing Qatar, the most pressing is linked to the country's most acute scarcity-that of water. With one of the world's lowest levels of rainfall, Qatar relies on water from desalination, groundwater and recycled water, and all three face stresses. Notwithstanding

the pressures, Qatar's consumption and network leakage rates are high. Per capita water use is one of the world's highest.

Qatar will enact a comprehensive National Water Act establishing an integrated system of quality requirements, discharge controls and incentives for conservation-in place of today's fragmented system of laws and regulations. The goal is a set of policies and regulations for the government to align consumption and supply over time while protecting water quality.

Cleaner air

Qatar has two categories of air quality challenges. First, various local pollutants mix with particulates in the air-including chronically high levels of dust-to cause air quality problems that contribute to respiratory illnesses. Second, carbon dioxide emissions, mostly from energy production, add to greenhouse gases and contribute to global climate change.

Improved waste management

Affluent societies tend to produce large quantities of waste, and Qatar is no exception. With an active construction business, extensive hydrocarbon sector and growing number of high-income households, Qatar creates more than 7,000 tonnes of solid waste each day.

Nature and natural heritage sustainably managed

In Qatar, as in many countries, biodiversity is facing threats from a range of human activities. Population growth and rapid urbanization have put pressure on the delicate balance of natural endowments, crowding out some elements in the biodiversity mix. Construction and industrialization are impinging on fragile coastal habitats and disrupting marine life. International shipping and trade have introduced invasive species that pose threats for indigenous species. Overfishing has emerged as both an ecological concern and a threat to future food supply.

A healthier urban living environment

Doha has grown exponentially, supported by a construction boom of striking contemporary buildings. But the capital lacks the benefits that urban green spaces provide. To continue Doha's expansion without incorporating greenery and open spaces would increase Qatar's sustainability challenges. Urban conditions would become more crowded over time, and more subject to noise and pollution. Bringing a green dimension to urban planning could strengthen sustainability and make cities more liveable.

Significant shifts in the makeup of Doha are envisioned. The government is devoting special attention to the urban environment. Although Doha's initial design did not incorporate green spaces, the government's strategy for improved environmental management calls for the city to be retrofitted in ways that more effectively balance the natural and built environments. To make Doha a greener city, the government plans a network of green spaces as ribbons of tree-lined areas rather than large, open parks.

An increasingly environmentally aware population

Successful environmental management will require active engagement through society. Large commercial corporations and policymakers have important roles, and so does every individual. There is also evidence that a deeper environmental awareness is growing. For example, schools have added environmental studies programmes to the curriculum.

The government will enlist the population in supporting and sustaining improved environmental management. The campaign to protect Qatar's environmental endowment will draw on values embedded in the country's religious and cultural heritage. The notion of protecting the environment for the benefit of future generations has broad appeal.

Strategic partnerships

Addressing environmental concerns is a cross generational, Cross border exercise. One key function of government in the environment sector is to forge strategic partnerships with neighbouring countries as well as private firms and international organizations such as such as the United Nations Educational, Scientific and Cultural Organization, the United Nations Environment Programme and the World Health Organization, which can provide key knowledge, human resources and technology.

Advancing from strategy to implementation

Qatar's National Development Strategy 2011-2016, comprehensive and multidimensional, presents different implementation challenges in its different parts (table 1). While the process of building the machinery for implementation has already started, it needs to be accelerated and the achievements need strengthened.

Successful implementation will depend first and foremost on the demand by the country's leadership for regular information on progress and results. It will also depend on mainstreaming the strategy across the whole government. Ministries and agencies will need to take ownership of the strategy within their own operational plans and accept accountability for delivery. At the centre, the strategy will have to influence processes that drive crucial decisions on how resources get used and provide operational tools that allow specific projects and policy proposals to be assessed in an integrated way. Significant challenges lie ahead, particularly in building the human and institutional capabilities for effective planning and project execution, but also in providing the legal basis for some of the proposed changes.


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