Economy of Qatar

The oil found in Qatar (1939) and its industrial production (since 1949) radically changed the situation in the country, making it possible to achieve unprecedented rates of economic growth. Today, oil accounts for more than 55% of GDP, 85% of export earnings and 70% of all government revenue. Proved oil reserves 14.5 billion barrels. (2002). Thanks to oil production, GDP per capita in Qatar is comparable to the leading Western industrial countries. In addition to oil, the production and export of natural gas is becoming increasingly important, the reserves of which, according to various estimates, exceed 21 trillion m3 (2nd place in the world in terms of volume after the Russian Federation). The reserves found in the giant North Field field will allow the gas industry to continue to grow at an accelerated pace and provide the necessary amount of gas to pass through the planned gas pipelines to Kuwait and the United Arab Emirates. Gas production in Qatar increased from 19.6 bcm in 1998 to 32.5 bcm in 2001.

In 2000, Qatar’s foreign trade surplus amounted to $7 billion. This was mainly due to high world oil prices and a gradual increase in gas exports. This surplus remained in 2001.

According to cheeroutdoor, Qatar has maintained a high rate of GDP growth since the day it declared its independence. On average, they are 8-10% per year. Qatar’s GDP increased from $510 million (1972) to $7.17 billion (1995), i.e. more than 14 times. The dynamics of GDP growth depends entirely on the state of the world energy market and oil prices. For Qatar, the period of a general recession in the world economy and, as a result, a noticeable reduction in oil consumption coincided with a fall in the volume of GDP within the country (4930 million US dollars in 1985 against 5773 million US dollars in 1979). Similarly, the growth of national income per capita fluctuated in GDP: in 1982 it reached 19 thousand US dollars, which allowed the country to take one of the first places in the world in this indicator; in 1995, due to a downturn in the fuel market, it was $12,000. As of 2002, the GDP is 17.2 billion US dollars, the GDP growth rate is 3.4%; GDP per capita 21.5 thousand US dollars. Inflation 1.9% (2002), unemployment 2.7% (2001).

Sectoral structure of the economy: by contribution to GDP (%, 1996): agriculture 1, industry 49, services 50. GDP structure by employment (%, 2000): agriculture 0.4, industry 67.6, services 32.

In addition to the oil and gas industry, which is the basis of the country’s economic well-being, the energy sector has also been widely developed. The total capacity of power plants was estimated at 1863 MW (2000), electricity generation amounted to 9.264 billion kWh (2001). Qatar provides electricity for the domestic needs of its citizens free of charge. For Qatar, desalination is a major challenge (over 113 million gallons per day in 2000). The construction business, the production of building materials and cement are successfully developing. There are three industrial zones in Qatar: Umm Said (oil refining and petrochemicals, more recently also metallurgical and gas industries); Doha (SMEs, repair shops, consumer services, food production); new zone in Ras Laffan (gas processing and transportation).

Unfavorable climatic conditions and the presence in the country of only desert and semi-desert lands led to a very limited use of the agro-industrial complex.

The total area of cultivated land is approx. 7.6 thousand hectares, or 3% of the total area, the share of absolutely unsuitable land is 91.6% of the entire territory of the country. According to the FAO, in 2000 Qatar produced 4,100 tons of barley, 1,800 tons of corn, 53,400 tons of vegetables and gourds, 18,000 tons of fruits and dates; in animal husbandry: 35,900 tons of milk, 4,100 tons of poultry meat, 7,400 tons of lamb meat. The most traditional and successful branch of agriculture is fishing – 4207 tons (2000).

There are no railways in Qatar. The total length of highways is 1230 km, of which 1107 km are paved. The total length of pipelines is more than 892 km (1997), incl. St. 187 km – for pumping oil and more than 700 km – for supplying gas. Maritime transport plays a dominant role in the transport of goods, accounting for over 70% of import cargo and 100% of oil and gas exports. Commercial shipping has only 25 large vessels with a total tonnage of 679,081, including 10 bulk carriers, 6 oil tankers, 7 container ships, 2 oil and ore carriers (2002). The main port of the country is Doha (in the mid-1990s, the total length of the berths was 1699 m) and the completely reconstructed port of Umm Said. Qatar has 4 airports. The largest international airport is located near the capital (in 2000 it received 2.6 million passengers), the rest are used only for domestic transportation. In 2001, Qatar Airways had 15 aircraft. The Qatari authorities plan to increase the volume of cargo transportation and bring the number of aircraft to 22 (2006). In 1998 the country was visited by approx. 451 thousand tourists, but the industry itself is small due to underdeveloped infrastructure.

In Qatar, along with traditional communication systems, in addition to ordinary telephone (167,400 users, 2001), mobile communications (178,800, 2001) and the Internet (40,000 users in 2001) have been successfully developing recently. Qatari radio has existed since 1968, the number of radio receivers in 1997 was 256,000 – one of the first indicators in the Arab East. National television appeared in 1970, broadcasts its programs on 3 channels and has 520,000 viewers (2000). The country has its own satellite communications, the Al-Jazeera satellite TV channel is well known.

The features of the modern economy of Qatar are the availability of cheap energy, large investments and a shortage of local labor resources. This makes Qatar’s economy energy- and capital-intensive, but labor-saving. The country is narrowly focused on petrochemistry, oil refining, the development of the gas sector, and banking. Since Qatar is an absolute monarchy, the emir, together with advisers and the cabinet of ministers, is personally involved in the state regulation of the main proportions of economic development, stimulates the development of the private sector, and monitors the participation of the state in industrial and financial activities. In the field of social policy, Qatar provides its citizens with a number of privileges and material benefits, the right to free education, health care, vocational training, etc.

The national financial system was born in 1971 immediately after Qatar declared its independence. Prior to this, all financial activities were controlled by British banks. Currently, 16 banks and 8 insurance companies are successfully operating in the country. The Qatari Central Bank controls all economic and financial activities in the country, regulates money circulation, and issues new banknotes. The bank has existed since 1966 (the capital is 1.14 billion cat. rials). Other major banks include the National Bank of Qatar (founded in 1965) with a capital of 1.038 billion kata. rials. The exchange rate of the Qatari rial against the US dollar has been stable over the past years and is equal to 3.64.

The budget of Qatar is closely linked to the level of oil prices and the level of production. The sharp rise in oil revenues in the 1970s caused a large budget surplus, allowing Qatar to launch significant industrial programs and new infrastructure projects. In 2001/02 the budget provided a revenue of 18.057 billion cat. rials, expenditure of 17.560 billion, surplus of 497 million cat. Rials (with an average oil price of $16.5 per barrel).

Qatar’s external debt is due to loans to cover the state budget deficit. To con. In 2001, external debt rose to $13.223 billion, of which $7.305 billion was directly government debt. According to Western estimates, debt repayment should rise to $1.435 billion in 2002 (twice as much as in 1998), but a gradual decrease to $380 million by 2005 is planned.

The standard of living of the people of Qatar has increased immeasurably in recent years thanks to the increase in the growth of oil and gas exports. Total industrial wages in 2000 were $240 million. The average wage of an industrial worker, respectively, was $7,571 a year.

Qatar’s economy is almost entirely dependent on the state of its foreign trade. Qatar is forced to import almost the entire range of goods – from food, consumer goods to machinery and equipment. Despite the uneven growth of exports and imports, between 1972 and 1995 Qatar’s foreign trade turnover increased 8.1 times (exports grew 6 times, imports 17 times). Imports increased from $2.9 billion (2000) to $3.9 billion (2002). Main import partners: France (18%), Italy (9%), USA (9%), Japan (8%), UK (7%) (2001). Exports of 11.594 billion dollars, including 6.859 billion dollars from crude oil and 3.300 billion dollars from natural gas (2000), according to data for 2002, exports of 10.9 billion dollars. Qatar also exports chemical products, fertilizers, with the introduction of metallurgical enterprises – metal and metal structures.

Economy of Qatar