- Jose Carlos Cueto – @josecarloscueto
- Special Envoy to Qatar, BBC Mundo
Photo credit, Getty Images
Skyscrapers in Doha with images of the World Cup.
Not so long ago, Doha, the Qatari capital, was a far cry from the futuristic and almost dystopian image it presents in 2022, just days away from hosting the World Cup.
A century ago, in 1922, this small Gulf state of three million people and less than 12,000 km² was a virtually uninhabited land, a humble colony of fishermen and pearl collectors where most of the inhabitants were nomadic travelers from the vast deserts of the Arabian Peninsula.
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Only a few people over the age of 90 today could remember the terrible economic difficulties experienced between 1930 and 1940, after the Japanese invented pearl farming, mass-produced pearls and effectively collapsed the Qatari economy.
During this decade, Qatar lost up to 30% of its population to seek opportunities abroad. Ten years later, in 1950, there were no more than 24,000 residents according to the United Nations.
But the Qatari economy was then on the verge of a radical turnaround. She had literally found a miracle: one of the largest oil reserves in the world.
It was from the second half of the 20th century that Qatar’s coffers grew rich at a breakneck pace and its residents became some of the wealthiest citizens in the world.
As Qatar reveals itself to the general public with its skyscrapers, luxurious man-made islands and state-of-the-art stadiums, BBC World takes a look at the three changes that have transformed the country into one of the wealthiest on the planet.
1. The discovery of oil in 1939
When Qatar discovered its black gold, it did not yet exist as a nation and was in the hands of the British, who took control of the territory in 1916.
After several years of exploration, the first reserves were discovered in Dukhan in 1939, on the west coast of the country, about 80 kilometers from Doha.
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The Qatari economy began to change drastically in 1939, with the first discovery of oil reserves in the Dukhan region in the west of the country.
However, it will take a few more years to take advantage of this discovery.
“The discovery comes just at the start of the Second World War, which means that the oil was not exported until 1949 and therefore the profits did not start to flow,” analyst Kristian Coates Ulrichsen told BBC Mundo. of Qatar at the Baker Institute in the United States.
Oil exports opened up a range of opportunities in Qatar, which quickly began to transform and modernize.
Lured by the booming oil industry, Qatar began to attract migrants and investors who swelled its population. In 1950 there were less than 25,000 inhabitants, but in 1970 there were over 100,000.
As a country of fishermen and pearl collectors, by 1970 Qatar had accumulated a gross domestic product (GDP) of over $300 million.
A year later, Qatar was consolidated as an independent state after the end of the British presence. A new era also brought with it a second discovery that generated more wealth.
2. The discovery of natural gas
When in 1971 exploration engineers discovered the massive North Field natural gas reserve off the northeast coast of Qatar, few people imagined its importance.
It will take 14 years and dozens of drills to realize that the North Field is the largest non-associated natural gas field on the planet, with around 10% of the world’s known reserves.
In practice, this means that Qatar has the largest gas reserves in the world, behind Russia and Iran, much larger and more populous countries.
The northern field covers an area of approximately 6,000 km², equivalent to half the area of Qatar.
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Qatargas, the largest liquefied natural gas producer in the world, sees the development of this industry as an important factor in Qatar’s economic growth.
But, just as with oil, the substantial benefits of exporting gas have been slow in coming.
“For a long time the demand was not great and there was not much interest in developing it, but that started to change in the 1980s when, in phases, the infrastructure started to being put in place, it was distributed in the country and, in the 1990s, it was prepared for export and became the great driving force of the economy,” says Coates.
3. The palace coup of 1995
Qatar’s economic growth curve took a stratospheric leap with the arrival of the 21st century. Between 2003 and 2004 alone, GDP rose from 3.7% to 19.2%. Two years later, in 2006, the economy grew by 26.2%.
Double-digit GDP growth has been a hallmark of Qatar’s strength for several years, and it’s not just the value of gas.
“It happened after the political change when Hamad bin Khalifa al Thani, the father of the current Emir Tamim bin Hamad Al Thani, took power in 1995, a controversial event for some because of the way he s is produced,” Mohammad al Saidi, a professor at Qatar University and specialist in sustainable economics, told BBC World.
Hamad bin Khalifa al-Thani deposed his father as the country’s emir while he was traveling in Switzerland. The Al Thanis are the dynasty that has ruled Qatar for a century and a half and such successions to power are not uncommon.
But beyond the palace intrigues, analysts agree that this succession marked a before and after.
“Investments in extraction, liquefaction and distribution infrastructure have multiplied in order to optimize the yield of its enormous reserves and this has translated into an exponential increase in exports”, explains the Spanish Institute of Foreign Trade. (ICEX).
In 1996, a cargo full of liquefied natural gas set sail for Japan.
It was the first major Qatari gas export and the start of a multi-billion dollar industry that catapulted Qataris to the pinnacle of global wealth.
GDP per capita in Qatar was USD 61,276 in 2021. If purchasing power parity is also taken into account, this figure increases to USD 93,521 according to the World Bank, which is one of the highest in the world. world.
Its small population makes a big part of the difference. Qataris number only around 300,000 to 350,000, or 10% of the current total of three million people, most of them expatriates.
“In other words, the population for which the large state benefits are directed is very small. This is what has allowed GDP per capita to grow so rapidly,” says Coates.
The Qatari state, in addition to guaranteeing high salaries, also offers strong public education and health systems.
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Experts consider the controversial rise to power of Hamad bin Khalifa al-Thani as one of the turning points in the spectacular growth of the Qatari economy between the end of the 20th century and the beginning of the 20th century.
Qatar’s economic challenges
However, Qatar’s spectacular economic growth has suffered setbacks and slowed down in recent years. It also foresees challenges ahead, not least because of its dependence on fossil fuels, the impact of which on the climate is currently the focus of much attention.
“In 2013 and 2014, oil prices crashed and economic diversification became the main topic of discussion,” says al Saidi.
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The Shard, London’s tallest iconic building, is part of Qatar’s sovereign wealth fund investment portfolio.
Added to this is the blockade imposed between 2017 and 2021 by Saudi Arabia, the United Arab Emirates, Bahrain and Egypt following a diplomatic dispute with Doha, calling into question the resilience of the Qatari economy.
“Qatar has not yet built a post-gas or post-oil economy, so they are trying to develop the private sector, investing heavily around the world to reduce their dependence on hydrocarbons,” Coates adds.
A good example of this attempt is the presence of the Qatar Investment Authority, the state’s sovereign wealth fund, in many well-known properties in cities such as London and New York.
“Or how they are trying to boost tourism and make Doha a hub for meetings, conferences and events, especially now with the World Cup,” Mr Coates adds,
Qatar’s economic wealth is reflected in the more than 200 billion dollars it has invested in the World Cup, the most expensive in history, with eight stadiums, a new airport and a new metro line, not to mention cite just a few of the different infrastructures planned for the event.
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Qatar has been preparing for the most expensive World Cup in history for 12 years.
Much of the world is questioning how the tournament has been prepared, with complaints from aid organizations about the conditions of many workers involved in the construction, mostly from countries including Nepal, India and Bangladesh. .
Added to this are allegations of corruption and bribery aimed at Qatar and the International Federation of Association Football (FIFA) when awarding the event in 2010.
This situation and issues around women’s and LGBT rights in a country described as conservative and strict led many to view the event as an exercise in “image cleaning”.
Beyond these complaints, it is clear that this is much more than a World Cup for the small country which has become rich in record time and is now seeking to establish itself as a geopolitical player. key under a more modern and progressive image.