Qatari Economic Growth and Its Contributors

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Different countries have different levels of economic growth. Such a difference may be due to the fact that countries differ in resource endowment and leadership. As such, this explains the difference in the challenges that different countries face in their attempts to build a sustainable source of revenue. This paper, therefore, looks at the economy of Qatar with a special focus on the contributors to the country’s economic growth.

Qatar is a developing country that occupies a very small area in the Persian Gulf. In spite of the small size, the population of the country has been increasing with each New Year. The country has suffered a number of challenges to maintain the increased demands of domestically and internationally following the economic downturn. Even though it has the smallest geographical area, Qatar is the second largest in terms of oil and gas reserves.

The gas reserves of Qatar account for more than 6% of the world’s total gas reserves (Almfraji 1040). This country has been under the leadership of the Al Thani family for a long time. The Al Thani family does not advocate for political rivalry, which explains why they have been in power for a long time. However, the leadership of Qatar under the Al Thani family has been successful in terms of economic growth. The family has driven the country into prosperity through political turmoil, internal and external conflicts over the oil and gas reserves. In addition, this family has started several development projects that have enhanced the living standards of the citizens of Qatar.

There have been numerous investment incentives and opportunities in Qatar following the diversity and growth in the country’s economy, as well as the country’s state of prosperity (Almfraji 1040). The development of its economy is an important part of the country’s development vision in modern days. Economic development in Qatar is considered an engine, which serves as a progress driver in the provision of better avenues, as well as better living standards for its citizens.

An overview of Qatar’s economic development shows that the country has been undergoing a lot of challenges before it gained its present economic growth. In spite of the phenomenal economic development notable in Qatar, the country faced a number of hard times trying to consolidate its strategies in a bid to create a sustainable economy. The population of the country increased twofold between 2000 and 2007. For this reason, Qataris became a minority, as well as suffered a number of challenges to maintain the increased demands following the economic downturn. In addition, the increasing population pressurized the country’s environment and natural resources.

As a result, there was a need for the country to devise better ways of earning revenue as well as providing for its citizens (Ibrahim 9). Such an objective is what pushed Qatar to strike a balance between a knowledge-based economy and one that is oil-based. As such, the country has diversified its economy, as well as guaranteed a business environment that is sustainable and stable.

Main body

The public sector in Qatar, especially the institutions found it hard to keep up with the demands to expand the economy of the country. Such was attributable to the fact that the development of administrative and institutions capacities was delayed (Ibrahim 9). As such, considering the rise in economic and societal complexities in Qatar, there was a need for responsive and flexible institutions.

Such an objective was hard to achieve owing to the fact that Qatar’s public sector adopted a traditional and extremely central approach. As such, the delivery of services to the public sector experienced many challenges until the launch of a reform program that aimed at offering quality services to the public and rationalizing the Qatari government. Therefore, as pointed out by Ibrahim (9), even though the country was successful in ensuring that its economy grew, it is evident that initial diversification, as well as the creation of viable reform initiatives, was a big challenge. This challenge was attributed to the fact that the country did not have better links.

In addition, Qatar lacked a society that was highly permeated. As such, there was a need for better strategies necessary for the provision of services to the public. However, the country’s economy started growing following the establishment of the General Secretariat for Development Planning. The launch of the GSDP marked the turning point for Qatar and its economic growth. It provided fresh, better thinking, as well as leadership strategies that were necessary for the achievement of the national development agenda (Almfraji 1045).

It was through the GSDP that Qatar realized its potential growth in oil and gas, manufacturing, construction, as well as in agriculture. As such, the General Secretariat for Development Planning steered the country into its present high economic growth, with oil and gas being the major contributors to the country’s growth in the economy.

Dating back in the 90s, policymakers in Qatar have had efforts aimed at creating a diversified country that can have a wide source of revenue and is able to control its public expenditures. Such efforts, along with the privatization of major sectors, have improved productivity, as well as led to the long-term growth of the country’s economy (Ibrahim 9). A review of the country’s latest policies shows that the economy of Qatar has been growing on a yearly basis.

Considering the last 10 years, the gross domestic product of Qatar has been averaging on an increase of 6% annually. However, since the year 2008, the country experienced significant growth in its economy, and a gross domestic product reaching 10.7%. Such growth was attributable to the presence of fiscal policies that are more effective, and the creation of a business and economic environment that is favorable for growth. As such, Qatar has experienced development in all sectors. For this reason, the country does not overly rely on a given sector alone. According to Ibrahim (9), the trends in the market predict a continual economic growth in Qatar.

According to a literature review on the economic growth of Qatar, it reveals that economic growth can follow two types of models. One of these models is the Romer growth model, while the other is the Solow growth model. The Solow growth model focuses on the accumulation of capital in a scenario of exogenous technological progress and population growth. As such, same rate of economic growth is expected in a situation where technological progress and population growth are identical.

The implication, thus under the Solow economic growth model is that policy makers have no impact on the long-term economic growth. In a situation where the country experiences a zero change in the capital-labor ratio, with an increasing capital output and stock, and a constant population growth, the expected level of per capital income per individual. However, for the case of Qatar, economic growth follows the Romer model whereby policies and incentives have a significant impact in the long-run. As such, Qatar’s long-run economy is depended on the combination of technological processes and labor force.

Based on the above concept, the prosperity of Qatar can be attributed largely to the availability of natural resources. In addition, the government of Qatar is often working with the aim of ensuring that it diversifies its sources of income, as well as develops a robust economic infrastructure (Almfraji 1040). For example, the Qatari government initiated the expansion of its exploration projects primarily in the sector of oil and gas. In addition to such expansion, the Qatari government offered incentive opportunities that were necessary in attracting both foreign and domestic investors along with gas and oil projects.

As such, the economy of Qatar is one of the economies of the world that has been experiencing an enormous growth and offers various world-class, as well as a variety of innovative services and products to both internal and international community. The Qatari government has an open and strong economy. For this reason, the country is able to commit itself to standards and practices that feature an international economy. Presently, Qatar is working towards the establishment of an excellent business presence following its objectives of a concentrated economy that can be used in leveraging globally.

Macro-economic trend

Qatar has been listed as one of the richest countries in the world. Its per capita gross domestic product in the 70s was 1156% (Almfraji 1043). Ordinarily, the country could not have sustained such a scenario. In the 80s, there was a change from 1156% to per 53%. However, as the country approached the 90s, the gross domestic product per capita moved from 53% of the 80s to 94%. Such expansion was attributable to the increasing demand for oil in both internal and external markets.

From the trend, it is evident that the economy of Qatar has been growing with each year. Such an increased economic growth has placed the country in an international angle whereby it interacts with many countries within the Gulf and beyond. For this reason, the economy of Qatar is likely to continue growing. Such a scenario has led to a discourse about what factors of the country have contributed to its high economic growth. Although different researchers and scholars have different opinions on this subject, it is a fact that Qatar’s involvement and the production of oil and gas, has been highly instrumental in the country’s economic growth.

Factors responsible for the growth of economy in Qatar

For a number of consecutive years, a tremendous growth has been witnessed in Qatar’s economy. Scholars and researchers have been actively trying to analyze the contributors of Qatar’s economic growth. The gas reserves in Qatar are the largest. These gas reserves have played a significant role in the economic growth of this country. However, even though Qatar is known to be one of the largest producers of oil and gas, research has showed that there are other sectors that have contributed to the economy of this country up to its present level. Some of these sectors include the agricultural sector, construction, manufacturing, and the hosting of the 2022 world cup (Ibrahim 9). The combination of revenue from the above areas has been instrumental in the realization of the high economic growth in Qatar.

Agricultural sector and its contribution to Qatar’s economy

The agricultural sector has been one of the main contributors of Qatar’s economy. For centuries, the Qatari government, as a reliable source of revenue, has relied on this sector to boost its economy. In Qatar, agriculture involves activities such as fishing, pearling, nomadic herding, as well as small-scale farming.

These forms of substance farming played a great role in the country’s economic growth before the exploitation of oil in Qatar. Although these activities served a great part in Qatar’s economy, their relevance since the onset of oils has seemed to decline. However, the Qatari government encourages fishing and agriculture as a source of food for self-sufficiency. The agricultural sector in Qatar grew between the 60s and 70s, with the country experiencing an increase in the number of farms.

Looking at the present statistics, it is evident that agricultural farm owners provide most of the job opportunities in Qatar. As such, agriculture has been of high significance in the improvement of the country’s economy. Agriculture in Qatar has offered citizens as well as non-citizens the opportunity to earn their livelihood. Such can be through getting employed on other people’s farms or starting their own. Evidently, agriculture in Qatar has created employment opportunities for many people.

In order to prove that agriculture is important in the country’s economy, the government of Qatar runs an experimental farm. An overview of land use in the 1990s indicates that 48% of the land in Qatar was left for vegetables production, 33% was set aside for the production of dates and fruits. On the other hand, 11% of the total land was used for fodder production, while grains were produced in about 8% of Qatari land.

However, on the side of livestock keeping, it was found that horses, cattle, goats and sheep were kept in large numbers in Qatar, whereby about their products serve as an addition to the country’s economic growth. As such, it is evident that besides oil and gas, Qatar receives a considerable amount of revenue from the agricultural sector (Ibrahim 9). However, the agricultural sector in Qatar has been experiencing severe conditions that have seemed to pull the proceeds from this sector down.

For example, water and fertile soils have been a challenge in Qatar making the sector to decrease its production. Nevertheless, the Qatari government through subsidies increased the production of agriculture. In addition, the government has expanded the agricultural sector through the treatment of sewage effluent for use in the agricultural fields. Thus, the water from the treatment of sewage effluent is used to water most of the agricultural farms in Doha.

The agricultural sector is one of the primary sources of revenue in Qatar, which is the reason why the country has been forced to adopt irrigation systems, categorization of the agricultural farms, and improvement of the production from agriculture, as well as the introduction of technological farming methods that feature modern scientific techniques (Ibrahim 9).

Some of the techniques introduced include intensive, as well as protected farming used in production activities, diversification of the patterns applied in the farming production, as well as the adoption of guides, monitoring and organizational techniques in farming. There have been many changes in the agricultural sector in Qatar lately, with the major aim being to meet the demand for agricultural produce both internally and externally. As such, the government implemented the agricultural census project, designed, as well as established an irrigation network that was based at the Al Khor Park, and developed an advanced way of utilizing and monitoring subterranean water.

In addition, the Qatari government provides seedlings to all municipalities to enhance the growth of agriculture (Ibrahim 9). Following such modern ways of farming, the agricultural sector in Qatar has been able to overcome some of the challenges in this sector leading to improved production and thus high revenue.

Food products are necessary for human survival, and this explains why the Ministry of Municipal Affairs and Agriculture has been on the forefront encouraging the development of agriculture all over the country. For this reason, it evident that agriculture has been highly instrumental in realizing the country’s current economic state. In addition to the cited agricultural products, fishing is also used as a major subsistence source of food in Qatar (Almfraji 1040).

Overly, the proceeds from oil and gas reserves could not be enough in maintaining a balanced economy. This has the implication that without agriculture the Qatari government would spend all the revenue it gets from construction, manufacturing, and other sources in buying food products for its citizens. However, with the agricultural sector in place, money that would otherwise be used in purchasing food products is used in developing the country and its economy further.

Prior to the development of an industry that was based on petrol, Qatar depended on poor pearl fishing. The exploitation of Qatar’s oil and gas delayed up to around 1939. Even though the exploration of oil began as early as in the 30s, revenue from oil and gas did not have a significant influence on the economy of Qatar at once. However, at around 1970s, the revenue from oil and gas began increasing and thus Qatar started registering an improvement in its economy.

In addition, the number of people living below the poverty line reduced with time. Over a short time, Qatar had moved out from the countries that were known to be poor then. In the 80s, the revenue from the energy sector was about QR 20.42 bn. However, the revenue decreased eight years later to about QR 14.83 bn. During this time, natural gas was not a major economic player until in the 90s. The decrease in the revenue from the energy sector was attributable to the global; oil prices clash as a result of supply gut. During this time, Qatar could not spend lavishly. However, in 1997, there was an increase in the revenue from oil and gas, which was registered as QR 21.885bn (Ibrahim 9). There was a progressive growth in the country’s revenue during the year 2004, and 2012.

Contribution of Qatar’s Industry to its Economic Growth

There have been numerous investment incentives and opportunities in Qatar following the diversity and growth in economy, as well as the country’s state of prosperity. The development of its economy is an important part of the country’s development vision presently. The Qatari government considers economic development in Qatar is considered an engine, which serves as a progress driver in the provision of better avenues, as well as better living standards for its citizens.

The economy of Qatar would not have reached its present levels without input from the industry sector. As such, the Qatar’s industry has been on the forefront as far as the country’s planning and diversification is concerned in the attempt to gain maximum revenue from all sources of revenue in the country. For this reason, the country has invested largely in industrial development. Qatar was keen to ensure that its exports were delivered without difficulties. This explains the reason behind the development of Mesaieed and Ras Laffan ports.

These two ports have played a significant part in gaining external currency since they act as the bridge to all products entering and leaving the country. As such, over years, the ports have led to national growth. One of the key contributors in this sector is the Industries Qatar (IQ), which has specialized in the production of steel, fertilizers, and petrochemicals. It is the second largest powerhouse in Middle East.

Nowadays, the manufacturing sector is one of the areas in Qatar that has received a lot of attention both internally and externally. Since the 1990s, manufactured goods have been in high demand and for this reason, it led to the growth of the manufacturing sector in Qatar. For example, manufactured goods serving the transport and communication sector improved the country’s economy following an increase in the gross domestic product from QR 539 million in the 1980s to QR 22.6 Billion, in 2012. However, in the year 2007, the country received one of the highest contributions in terms of GDP from the manufacturing sector (Ibrahim 9).

The country’s industry extends to cover products that are related to fertilizers, petrochemicals, as well as construction materials including steel. During the Gulf area development boom, construction materials were in high demand. The high returns realized from this sector has been channeled in other development projects aimed at offsetting any expected fall in the country’s revenue in the future. As such, the government of Qatar has had plans to expand its manufacturing sector in order to meet the rising demand for manufactured goods.

However, looking at the manufacturing sector as a whole, it is evident that this sector plays a significant part in Qatar’s economy. According to market trends, the gross domestic product within the manufacturing sector has been increasing on yearly basis. Such an increase in the gross domestic product has been instrumental in the growth of small and medium enterprises, which are necessary in any country’s economy.

However, the government has recognized the worth of small and medium enterprises in the growth of the country’s economy. For this reason, the government has been insisting on the promotion of such enterprises to help in the provision of goods and services that are necessary in any country, but are better produced under small scale. However, according to Almfraji (1045), another key player in the economy of Qatar has been the transport Sector. The transport sector has been very instrumental in the economic growth of Qatar. The country has been experiencing a growth in its population for a decade now. As such, there was a need to develop the transport network of the country.

For this reason, the Qatari government has tried to improve its transport development agendas. Considering the fact that most of the products need to be transported from one area to the other, the transport sector thus is a necessity in the country’s development. Overly, the economic growth of Qatar could not have reached its present level without key players noted above such as transport, and the manufacturing sector.

Economic Growth following the Hosting of the 2022 World Cup

Qatar won the bid to host 2022 World Cup. The wining of this bid was followed by a lot of developments in the country following its preparation. This came at a time when there were fears in the country concerning the slump of oil prices. As such, one of the goals of bidding on the 2022 World Cup was to offset the expected decline in revenue from the energy sector. Therefore, the wining of the bid gave Qatar an opportunity of diversifying the country’s economy as a way of avoiding its overreliance in oil and gas. Considering the total revenue in Qatar for the last year, it was evident that the construction sector played a great role in realizing the current economy of Qatar.

Following the win of the 2022 World Cup bid the country has started preparing for the same. As such, interested parties have contributed in the preparation. For instance, the country received funding from the United States of America to spend on its infrastructure. However, even before winning the football bid, Qatar had embarked on major construction projects in the country. There was a need for the country to put up structures aimed at housing the growing population.

As such, the country had started on the construction of new health centers, schools and homes, as well as sanitation systems and highways. Some of the main projects that the country has approved for development include the construction of a better railway network, development of the main city where the finals for the World Cup will be hosted. In addition, new hotels and stadiums are also underway for the preparation of the 2022 World Cup.

Growth and Impacts of Gas Reserves

Almfraji (1040), points out that the achievement of Qatar in oil and gas reserve exploitation was not out of accident, but followed the result of application of the right strategies, bold decisions, as well as good execution. The revenue from gas reserves drew a lot of interest from many parties. As a result, Qatar started moving from an oil-based economy and invested in gas-based economy. Following the high revenues registered in the following years, the country attracted investors from all over the world. Comparing the revenue that was registered by hotels and restaurants in the country, it is evident that there is a considerable increase nowadays.

A review of Qatar’s economic growth for the past few years shows that there are a few parallels (Ibrahim 9). Unexpectedly, the growth was not predetermined by the country’s bountiful sources of carbon, or was it out of chance that the country experienced and economic growth. Research has showed that even though some countries are rich in given resources, they are still not developed economic wise and as a result, they do not prosper.

For the case of Qatar, although resources played a significant role in determining the country’s present position in international market, there were other factors as outlined above in conjunction with the country’s resources, which were very instrumental in the realization of an improved economic growth. In Qatar, the development of the country’s hydrocarbon resources was as a result of the commitment and visionary leadership from the national government, vigorous execution, along with strong and mutually satisfying links from local and international communities (Almfraji 1040).

A significant role has also been witnessed from the geopolitics of the Arabian Gulf, as well as the changing demands for energy from different markets all over the world. With hindsight, the background for the country’s economic growth can be viewed as self-evident. However, an analysis of the facts can reveal that the economic growth of Qatar was as a result of decision-making that involved taking significant development risks. The discovery of the North Field was in 1971. It is one of the largest reservoirs in the world, and is not associated with gas. However, even though it is among the largest, its potential took about twenty years to be established.

Although, Qatar had a lot of potential in the availability of massive gas reserves, the economy did not start growing at once. There were challenges that the country faced such as the country’s distance as well as its location from primary market centers. Such a location did not favor Qatar as far as the proximity to potential clients was concerned. Due to such a challenge, Qatar did not experience profitable exploitation of the gases at that time.

Considering the development of the North Field gas resources, the primary aim of Qatar was to ensure that all the people’s human domestic needs were catered for. In spite of the potential, it was evident that if the reserves were successfully exploited, the quantity would be large enough to call for exports. This shows the extent of the gas reserves, and their potential to meet both domestic and international needs.

Though the country was faced by export challenges, it was necessary to overcome challenges such as the ones facing the exportation of liquefied natural gases. Therefore, the Qatari government was focused on breaking some of the challenges to ensure that it had a wide market for its liquefied gas. However, with time the country managed to get its first shipment reach Japan by the year 1997. This shipment was one of the first sales that improved the economy of Qatar putting it at a high level such that it could manage most of its internal activities easily and without relying on foreign aids.

As such, the opening of export avenues for Qatar’s liquefied gas was a boost to the country’s gas and oil industry since the country was able to manage leadership ties with neighbors, develop infrastructure as well as created new markets for its products through links and referral. As such, the opening of export avenues for Qatar was highly significant as far as the country’s gross domestic product and growth of foreign exchange was concerned.

Through the sale of liquefied gas, Qatar was able to build trade relations with other countries with interest in liquefied gas. As a result, the country was in a position to enter into successful partnerships that involved international and superior companies in the oil and gas industry. Such involvement was instrumental in placing Qatar in the world picture and producer of oil and gas. In addition, its market presence in Japan was significant since it was possible for Qatar to trade its liquefied natural gas in bulk as well as at a profit.

Since the creation of export avenues was the only challenge the Qatar was facing as far as the sale of its LNG was concerned, the country made tremendous improvement thereafter. However, even though Qatar had penetrated Japan’s market for liquefied natural gases, research established that the country needed a dependable infrastructure, robust source of capital, as well as stable management and partners (Almfraji 1040).

Therefore, Qatar depended on the sale of crude oil to get the necessary funds to enable Qatar to sustain its export of liquefied natural gas to Japan and other international countries. In addition, the launch of a gas plant catered the need for a dependable infrastructure. However, following the country’s state of economy, it had to rely so much on revenue from crude oil to fund the construction of the required infrastructure. Having met the cited requirements, Qatar entered the market for the liquefied natural gas in the Far Middle East. The high prices for the product in the Far East market were instrumental in building a reliable economic base in Qatar.

As such, through the country’s venture into this market, the administration of Qatar was able to meet most of its stringent financial needs, as well as the provision of better living standards for its citizens. Following the creation of a reliable export market, Qatar managed to scale up in the production and sale of its liquefied natural gas, downstream integration, as well as the establishment of suppliers and partners who were flexible and highly reliable. The proceeds from the sale of the country’s liquefied natural gases were used in building and improving the country’s living standards for its people. Such an objective was achievable following high revenue from oil and gas sales.

Qatar’s integrated Liquefied Natural Gas Model

The availability of gas reserves led to the establishment on an integrated liquefied natural gas model in Qatar. This model is a unique one that operates activities concerning the gas reserves, as well as works towards the development and provision of liquefaction facilities. This model, as well is tasked with the role of terminal development, receiving and shipping. For this reason, the LNG model is a perfect bridge between customers and reservoir as it serves to provide supplies that are cost effective and reliable to its customers (Ibrahim 9).

This was attributable to the fact that the model aimed at both upstream and downstream, linking the customers to the LNG through creation of a robust transportation and market strategy. For the case of the upstream, strategies were set in place that ensured the use of advanced technological methods, optimized wellhead operations, shifting facilities that were used in dehydration to the onshore, as well as the maximization of the offshore operations. The scaling up the capability of the liquefaction plant was next. As such, the Qatar’s Integrated Liquefied Natural Gas Model has been useful in creating a sustainable economy through the provision of quality services to its customers.

Fuel transport market: Gas-to-liquid fuels (GTLs)

Natural gas has been known to be more superior to oil on the basis of reliable source of energy. Such superiority can be looked at on the aspect of these sources’ efficiency, as well as their impact on the environment. In spite of this, natural gas serves as a subsidiary to oil. After opening avenues and market for Qatar’s liquefied natural gas, the country went ahead to venture into the conversion of lean gas with the aim of getting clean-burning gas-to-liquid type of fuel.

In the 1990s the prices for oil went down. In spite of the low oil prices, Qatar ventured in the GTLs market. The construction of the country’s Oryx GTL was initiated in 2003, and started its production four years later. Presently, Qatar runs one of the world’s largest GTL plant. As such, the introduction of the GTLs and the start of its operation was a boost to the country’s oil sector following the aging of the oil fields and the decrease in the oil prices. Towards the late 1990s, the production of GTLs was one of the major sources of revenue for the country, which led to a boost in the economy following years of slow growth due to the decline in the oil prices.

In addition, the GTLs production and sales opened new avenues for Qatar in the international market. Through its sale, the country developed new ties with influential parties in the GTLs and oil industry. As such, the relationship with different and influential business parties helped the country grow its revenue much higher. For example, through the partnership with parties interested in the GTLs business, the country was able to benefit from the products from its partners, as well as increase the country’s knowledge base.

Knowledge, in this context, was necessary since Qatar got insights on the broader international market picture, and through such a picture, it was able to look for new markets for its products. Evidently, the production and sale of GTLs was highly significant in restoring back the lost revenue following the drop in the oil business. Looking at the international market, it is evident that Qatar serves the world with both liquefied natural gas and the gas-to-liquid fuels.

Presently, the country is able to depend on the sale of GTLs following weak gas prices in the United States of America. For this reason, the country has maintained a global supply chain that has been instrumental in the country’s economic growth since this venture significantly contributes to Qatar’s fiscal and exports revenue. The penetration of a form of market that is extremely large for Qatar in the sale of GTL can be attributed to the country’s robust leadership along with strong and effective strategies set forth towards the achievement of the country’s vision.

Some of the most reliable sources of revenue in Qatar include oil and gas. Qatar prides in the availability of crude oil in the region. However, with time the oil fields grew old, leading to a decline in the quantity of oil the country supplied to the market. In Qatar, the development of oil fields, their appraisal, and exploration was carried out under the production sharing agreements for several of its fields. The country had allowed Qatar Petroleum to run its largest oil fields, since this strategy was useful in the realization of high profits from the sale of oil. The country’s investments in oil and gas have often had considerable high returns (Ibrahim 9).

A review on the market and financial dividends from oil and gas in Qatar indicates that the county has been enjoying large dividends and impressive macroeconomic achievements. As a result of successful oil involvement, Qatar attracted many interested parties. For example, Al-Shaheen entered into a partnership with Qatar and in 1994, the production of oil under this partnership started. This partnership led to the delivery of the largest production, as well as offshore reserves in Qatar.

The country’s growth since 2000 has been tremendous and fast, compared to any other country’s economy. Presently, Qatar names oil and gas as the largest source of its revenue producing a significant high income per capita. Following the considerable growth in the revenue from oil and gas, the living standards of people in Qatar had improved, as well as led to an increase in the consumer spending among the people in Qatar. In addition, some of the revenue from this sector have been saved and used to fund the country’s accumulated debts. The production of oil and gas has been on large scale in Qatar such that at times the country has surplus production.

As such, the surplus products are sold and the revenue used in a number of profitable investments (Ibrahim 9). Due to the growing economy in Qatar, the population has been increasing considerably, with a consequent rise in daily needs. For this reason, the Qatari government has been keen on improving its social and economic infrastructure through the revenue the country gets from oil and gas sales.

As such, it is can be seen that oil and gas have largely contributed in building a stable economy for Qatar. For example, the country uses revenue from the sale of oil and gas in building a legacy that can be depended on by future generations. However, research has established that revenue from oil can be volatile at times. For this reason, Qatar started a considerable financial endowment earlier that could be useful in the provision of continuous, as well as predictable funds for services such as education and health. This follows the knowledge that it can be risky to tie expenses on crucial needs to revenue from oil that can go down at times.

Alternative contributors of revenue

In Qatar, there was a necessity to consider investing in alternative areas that would help in creating wealth for the country. However, the creation of such investments depended on proceeds from the prevailing oil and gas sectors. For this reason, Qatar initiated the Qatar Foundation in the year 1994, which was aimed at the expansion of scientific research and education opportunities to subsidize oil and gas revenues.

In addition, the Qatar Foundation had the aims of promoting community development in Qatar. Later on, Education City was established in 1998, which was a learning environment, as well as a state-of-the-art campus. In addition, Qatar advanced its revenue from oils and gas to form the Quality Investment Authority to serve as a means of sate financial investment. As such, the Quality Investment Authority was significant in that it accumulated proceeds from the sale of oil and gas for use in the future, as well as diversified the asset classes, where the funds were invested. During these years, Qatar depended largely on oil and gas to advance its institutional base (Almfraji 1044).

For example, the country promulgated the Permanent Constitution in 2004. This constitution was significant in that it offered guidelines on all state functions as well as its institutions. On an economic angle, the constitution offered rights to economic freedom and private property. In addition, the constitution was instrumental in establishing the country’s ownership of the natural resources available such as the hydrocarbons.

The fact that oil and gas prices could at times fluctuate made Qatar to diversify its sources of revenue. A considerable percentage of the country’s economic level presently comes from alternative revenue sources, other than oil and gas.

For example, Qatar established the Qatar’s Airways, which is considered the national flag carrier, was launched in the early days of 1994. In addition, Qatar’ economic receives a boost from other areas such as the Al Jazeera, ICT Qatar, Qatar Science Technology Park and the Qatar Financial Centre Authority. As such, there was a need to reform most of the institutions in order to fit into the growing economy. For example, Qatar invested in education sector since education was promising high returns in the future. For this reason, Qatar gave independence to the University of Qatar. In addition, the country started the Supreme Education Council in an attempt to ensure that the necessary reforms in education were implemented as expected.


This paper looked at the general overview of the economy of Qatar before the rise in the economy, its exploration of the gas and oil fields up to the present date. In addition, there was also an analysis about other revenue contributors in Qatar. Looking at the analysis, it was evident that the country has registered a high growth in revenue and an improved gross domestic product. For example, it has been cited that the country since the year 2008 enjoyed a significant growth in its economy, and a gross domestic product reaching 10.7%.

This growing gross domestic product has placed Qatar in the bracket of the richest countries of the world. From the analysis, it was evident that the economy of Qatar grew following the interplay of several factors and sectors. For example, it was found out that the manufacturing sector was highly instrumental in reaching the current state of development in the country. The construction sector in Qatar is yet another area that played a significant role in building the nation of Qatar, as well as its people.

Such was possible considering that the country was undergoing a boost in the population following the growing concerns of industrialization and globalization. For this reason, the country was in need to supply shelter and other necessary services to its citizens. Thus, the involvement of the country in the provision of services in construction spectrum led to the boost of Qatar’s economy. In addition, the economy of Qatar received a boost from the sale of liquefied natural gas.

From the foregoing, it suffices that the achievement of a high revenue growth in Qatar was not an easy task. Despite its potential in the availability of massive gas reserves and oil fields, Qatar’s economy did not begin immediately. This was as a result of a number of challenges such as the country’s distance as well as location from key areas where it could market its products. Evidently, Qatar went through several handles before reaching its present state of developed economy.

Considering all the contributors of the economy, oil and gas have proved to be key players. However, the country has diversified its economy base in order to prepare for uncertainties that might arise considering that the prices of oil and gas at times fluctuates. As such, looking at the economic perspectives, there are key lessons that the administration of Qatar should learn from its economic journey. In order for the country to remain sustainable in its development agendas, the country needs a change from an economy that is based on investments to an economy that is focused on improving efficiency as well as the productivity gains. Such a form of economy is likely to impel growth.

The implication is that diversification opportunities can come if the economy embeds continual growth based on efficiency. As such, the country will not have to rely wholly on one source of revenue, such as the oil and gas, since opportunities for growth and economic advancement will be open. However, it is worth noting that such an economy, which is based on vibrant knowledge, cannot be realized through a pen’s stroke. Some key factors such as infrastructure, incentives, institutions, networks, mindsets, and capabilities are necessary. Therefore, the Qatari government should focus on breaking some of the challenges to ensure that it maintains it current economy while opening up other avenues of growth to avoid its reliance on oil and gas.

Works Cited

Almfraji, Yao. “Economic Growth and Foreign Direct Investment Inflows: The Case of Qatar.” Procedia – Social and Behavioral Sciences, 109.2 (2014): 1040-1045. Print.

Ibrahim, Harrigan. “Qatar’s economy: Past, present and future.” QScience Connect, 2.1 (2012): 9. Print.

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BusinessEssay. (2022) 'Qatari Economic Growth and Its Contributors'. 15 December.


BusinessEssay. 2022. "Qatari Economic Growth and Its Contributors." December 15, 2022.

1. BusinessEssay. "Qatari Economic Growth and Its Contributors." December 15, 2022.


BusinessEssay. "Qatari Economic Growth and Its Contributors." December 15, 2022.