Economic Change in Qatar

From the outset, it is important to note that Qatar was one of the poorest countries in the world prior to World War II. At the time, the countrys derived a large portion of its revenue from fishing and pearling (Etheredge 2011:99). This began to change in the 1940s, following the discovery and development of oil reserves. Over the last four decades, Qatars economic growth has been rapid.

Qatar has become a wealthy country, with a free, well-monetised economy without deposit interest-rate ceilings and market forces deciding interest rates. It does not have a problem of population, poverty traps, or of the economy in the way that some other developing countries do. Since the mid-1990s, policymakersongoing attempts to diversify income, to control government spending, and to oversee privatisation have contributed to improved efficiency and accelerated economic growth in the long-term. Several changes in recent years have resulted in a more successful fiscal policy, creating a more favourable market and economic climate and strengthening the position of the private sector. Economic reforms remain a principal priority for decision-makers amid rising oil prices and revenues. Meanwhile, additional steps have been taken to develop a broad legal and economic framework which appeals to foreign investment, in line with a free market and an external Qatar economy. In the 1990s, the Qatari Government began to change legislative structures to ensure a sufficient and free inflow of foreign capital. Law No. 25 in 1990 approved the engagement of non-Qatari capital in a broad range of exclusively Qatari economic activities. In 2000, the government of Qatar amended the legislation regulating the legal and economic environment and allowed foreign investors to own 100% of all ventures. Exceptionsto this are banking, insurance and general trade, where a partnership of 51% is still necessary in Qatar. The government has also adopted regulations on intellectual property and lowered tariffs to comply with the requirements of the World Trade Organisation (WTO) (El-Mefleh and Shotar 2008).

In selecting the indicators, two key attributes have been taken into consideration, namely their procyclical and countercyclical nature. This involves the movement of the indicator in comparison to the economy. For instance, while the unemployment rate is considered countercyclical because its direction of movement is opposite to that of the economy, gross domestic product (GDP) is deemed procyclical because its direction of movement is the same as that of the economy. The former decreases with good economic performance while the latter increases when the economy thrives. As such, two of the macroeconomic indicators that I will be highlighting in this thesis include GDP and the unemployment rate. Further, it is also important to note that, according to the U.S. Energy Information Administration EIA (2015), Qatar is the largest exporter of liquefied natural gas (LNG) in the world, and the countrys exports of LNG, crude oil, and petroleum products provide a significant portion of government revenues.In this light, this analysis will also highlight the countrys crude oil exports and natural gas exports over this 25-year period.

1.1.1. Annual GDP

GDP is one of the most important indicators that we can be used to make sense of Qatars economic growth over the last 25 years. This is, in essence, a lagging indicator. As can be seen from the graphs below, the countrys GDP has generally been on an upward trend since the year 1995, albeit with the countrys GDP experiencing a significant slump in the years 2014, 2015, and 2016. Between the year 1995 and 2000, the country experienced significant growth in GDP from $8,138 million in the year 1995 to $17,760 million in the year 2000. This can be attributed primarily to the significant rise in the global demand for oil in this period (Yancken and Wilkinson 2001:44).

Qatar set a minimum wage in 2017 at QR1,000 per month, with QR500 per month for accommodation and QR300 for food given by an...…analysis, it is important to remember that the nations economy is largely dependent on gas and oil-related industries (Cameron and Stanley 2017:172). These industries have been further propped up by the countrys heavy investment in this area from as early as the 1990s. It is for this reason that the country has become one of the largest gas exporters in the world and the largest exporter of LNG. Looking ahead, however, the country needs to take steps to diversify from gas and oil. This could be accomplished by making investments to prompt growth in other, non-hydrocarbon sectors. These include, but are not limited to, financialservices, tourism, healthcare, and hospitality. This view is supported by analysis by the Oxford Business Group, which indicates that the country has made use of its gas as well and oil revenues to lay strong foundations for expansion in other sectors. According to the Oxford Business Group (2012), this is even more so the case given the need to ensure that the gains made in the past are sustained in the long term.

Very few countries have an experienced economic transformation on the scaleexperienced by Qatar in the last few decades. A key factor in this economic transformation is the countrys discovery, and subsequent development, of the hydrocarbon sector. Indeed, this can be considered the primary motor of the countrys economic and social progress over the last eight decades, following the discovery of oil in 1940. However, as Harkness (2020) points out, the non-oil economy has also been on an upward trend, growing by as much as 10% in the preceding decade (20002011). This growth cannot be separated from the hydrocarbon industry because it was the investments that were made in construction, utilities, and transportation projects to benefit the hydrocarbon sector that contributed to the growth (Harkness, 2020: 79).

Source: https://www.ceicdata.com/en/indicator/qatar/crude-oil-exports

Source: https://www.ceicdata.com/en/indicator/qatar/crude-oil-exports

Source: https://www.ceicdata.com/en/indicator/qatar/crude-oil-exports

Alongside this economic growth, the country has also experienced a great deal of social change, and,at this point, it is necessary to also…