[Source: NUSACC's U.S.-Arab Trade Outlook 2013]
Qatar has emerged as the Arab world’s most competitive economy, according to the World Economic Forum’s (WEF) Global Competitiveness Report 2010 – 2011. The report ranks the State of Qatar 17th globally, placing it ahead of all the other countries in the Middle East and North Africa (MENA) region.
In late 2010, Qatar achieved two other “firsts” for the Arab world that will have implications for Qatar’s economy for years to come. In November 2010, Qatar was selected by the International Federation of Association Football (FIFA) to host the 2022 World Cup. This massive undertaking is expected to generate upwards of $100 billion in infrastructure projects between now and the World Cup in 2022 – including roads, bridges, highways, railways, ports and related consultancy services.
Ashghal, the Public Works Authority, has been driving an unprecedented construction boom in recent years in order to help Qatar fulfill its National Vision of 2030 – to become a world-class sports, business and tourist hub. Qatar’s designation as the 2022 World Cup host has accelerated Ashghal’s already very ambitious timetable.
In December 2010, Qatar recorded another “first” for the Arab world when it reached a production target of 77 million tons per annum (Mta) of liquefied natural gas (LNG). This is a milestone for Qatar, which has become the world’s largest producer of LNG, according to Oil and Gas Journal. Hamad Rashid Al Mohannadi, Managing Director of RasGas, described the Mta milestone as a “defining moment in Qatar’s history as a gas producing and exporting nation.”
H.E. Abdullah Bin Hamad Al Attiyah, Deputy Premier and Minister of Energy and Industry, has been directly responsible for overseeing Qatar’s energy policies during the past 15 years. “I am very proud of what we have achieved together to realize the vision of His Highness the Emir,” commented Al Attiyah. “Fulfillment of this vision marks the beginning of the next chapter of our journey together.”
Qatargas Chief Operating Officer Ahmed al-Khulaifi recently confirmed that the final two liquefaction trains will start operating in the first and second quarters of 2011, respectively, increasing Qatar’s share of global production to 30 percent. Qatar supplies gas to 23 nations on four continents and makes up 28 percent of the world’s LNG production.
At the 77 Mta celebration in Doha, David Hamod, President and CEO of NUSACC, noted, “This is a remarkable success story. Qatar serves as an excellent example of how a nation’s natural resources can be harnessed to invest in a higher quality of life for current and future generations.” Qatar sits on top of 14 percent of the world’s natural gas reserves – the fourth largest in the world. Oil and gas production account for more than 50 percent of GDP, approximately 85 percent of export earnings, and 70 percent of government revenues.
In order to avoid over-supply, Qatar is studying its North Field’s long-term production potential against expected world demand. Qatar has placed a moratorium on new gas export agreements until at least 2013, pending this study’s outcome. Qatar delivers energy to regional markets as well as to North and South America, Asia and Europe. The multibillion-dollar joint venture Golden Pass LNG terminal in the United States is 70 percent owned by Qatar Petroleum International (QPI), with minority shareholders ExxonMobil and ConocoPhillips. Golden Pass is now unloading and delivering natural gas to customers in the United States, where demand is expected to increase by over 20 percent in the next 20 years.
Government and business leaders have also redoubled efforts to diversify the economy into downstream and new value-added industries. Qatar Aluminum Company (Qatalum), for example, is one of the largest aluminum plants ever built. It has a production capacity of 585,000 metric tons per year and is capable of expanding to 1.2 million metric tons if export demand increases by an anticipated 4 – 4.5 percent per year. In the same vein, Qatar Petrochemical Company (Qapco) has plans to expand a low-density polyethylene (LDPE) facility at Messaieed.
According to a recent Bank of America Merrill Lynch report, Qatar’s $32 billion 2010 – 2011 fiscal budget is 30 percent earmarked to complete over $112 billion in government medium-term infrastructure projects. Forty percent of the 2010 – 2011 state budget will be spent on roads, airports, ports and utilities, the causeway to Bahrain, railway network and finalizing a 50-mile highway project. A final 30 percent will be spent on healthcare and education, including new schools and hospitals.
Qatar Foundation’s Education City, as well as the Science and Technology Park (QSTP), are attracting investment from academic and scientific institutions around the world. Some of the U.S. universities that are partnering with Education City include the Georgetown School of Foreign Service, Weill Cornell Medical Center, Texas A&M, and Carnegie Mellon. QSTP is Qatar’s first Free Trade Zone and it already houses more than twenty-one companies – including ExxonMobil, Shell, Rolls-Royce and Microsoft.
In addition to placing great importance on developing its educational and scientific infrastructure, the State of Qatar has made strategic ICT investments during the past decade. The telecommunication sector was liberalized in 2006, for example, thereby opening the market to competition. ICT 2015, ictQATAR’s five-year plan, will focus on building an advanced ICT infrastructure.
“In just a few years, we have begun to realize the rewards of information and communications technology,” explained Dr. Hessa Al-Jaber, Secretary General of the Supreme Council of Information and Communication Technology – ictQATAR. “Since 2006, Qatar has jumped ahead in the index because both the public and private sectors are dedicated to leveraging ICT to help Qatar achieve its leadership role in the global economy.”
Qatar plays a critical role in U.S. defense initiatives in the region. While maintaining its own independent defense strategy, Qatar hosts an integrated U.S. missile defense system designed to protect key infrastructure and communications lanes. The Government of Qatar is planning to announce a multi-billion dollar purchase of 24 to 36 jet fighters by the end of 2012. The new planes will replace the Qatar Emiri Air Force Dassault Mirage fighter planes. Currently, bids from French, U.K., Italian and American companies are under evaluation.