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World > Middle East > Qatar > Economy (Notes)

Qatar - Economy (Notes)


ECONOMY
Oil formed the cornerstone of Qatar's economy well into the 1990s and still accounts for about 62% of total government revenue. In 1973, oil production and revenues increased sizably, moving Qatar out of the rank of the world's poorest countries and providing it with one of the highest per capita incomes. In 2006, Qatar's per capita income of nearly $62,000 was the fifth-highest in the world.

Qatar's economy suffered a downturn from in the mid-1990s. Lower Organization of Petroleum Exporting Countries (OPEC) oil production quotas, a fall in oil prices, and the generally unpromising outlook on international markets reduced oil earnings. In turn, the Qatari Government cut spending plans to match lower income. The resulting recessionary local business climate caused many firms to lay off expatriate staff. With the economy recovering in the late 1990s, expatriate populations have grown again.

Oil production is currently around 835,000 barrels a day (bpd), and is expected to reach 1.1 million bpd by 2009. At the current production pace, oil reserves are expected to last more than 40 years. Moreover, Qatar's proven reserves of gas are the third-largest in the world, exceeding 900 trillion cubic feet (14% of the world's total proven gas reserves). Qatar shares with Iran the largest single non-associated gas field in the world, the North Field. Qatar is now the world's largest producer of liquefied natural gas (LNG), with a capacity of more than 31 million metric tons per annum (mmta), and it expects to reach 77.5 mmta of LNG exports by 2010. By 2010, Qatar will account for one-third of the world's LNG supply.

The 1991 completion of the $1.5-billion Phase I of the North Field gas development project strongly boosted the economy. In 1996, Qatar began exporting liquefied natural gas to Japan. Further phases of North Field gas development costing billions of dollars are in various stages of planning and development, and Qatar has concluded agreements with the U.A.E. to export gas via pipelines and to Spain, Turkey, Italy, the U.S., France, South Korea, India, China, Taiwan, and the U.K. via ship. However, the government has halted any further expansion of gas production until 2010, as it assesses its plans for future exploitation of the field.

Qatar's natural gas liquefaction facilities and related industries are located in Ras Laffan Industrial City, site of the world's largest LNG exports of more than 31 million metric tons per year. Qatar's heavy industrial base, located in Messaieed, includes a refinery with a 140,000 bpd capacity, a fertilizer plant for urea and ammonia, a steel plant, and a petrochemical plant, and several new petrochemical plants will be built in the coming years. All these industries use gas for fuel. Most are joint ventures between U.S., European, and Japanese firms and the state-owned Qatar Petroleum (QP). The U.S. is the major equipment supplier for Qatar's oil and gas industry, and U.S. companies are playing a major role in the development of the oil and gas sector and petrochemicals.

The country's economic growth has been stunning. Qatar's nominal GDP, currently around $52.7 billion, has grown an average of 15% over the past five years. GDP is expected to grow approximately 8.3% in 2007. Qatar's per capita GDP is more than $60,000, and projected to soon be the highest in the world. The Qatari Government's strategy is to utilize its wealth to generate more wealth by diversifying the economic base of the country beyond hydrocarbons.

Qatar pursues a vigorous program of 'Qatarization,' under which all joint venture industries and government departments strive to move Qatari nationals into positions of greater authority. Growing numbers of foreign-educated Qataris, including many educated in the U.S., are returning home to assume key positions formerly occupied by expatriates. In order to control the influx of expatriate workers, Qatar has tightened the administration of its foreign manpower programs over the past several years. Security is the principal basis for Qatar's strict entry and immigration rules and regulations.


Facts at a Glance: Geography - People - Government - Economy - Communications - Transportation - Military - Current Time - Ranking Positions
Notes and Commentary: People - Economy - Government and Political Conditions - Historical Highlights - Foreign Relations - Relations with U.S.



Facts at a Glance
Geography
People
Government
Economy
Communications
Transportation
Military
Current Time
Ranking Positions


Notes and Commentary
People
Economy
Government and Political Conditions
Historical Highlights
Foreign Relations
Relations with U.S.





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