THE BUSINESS YEAR: QATAR 2021
2020 will forever be remembered as the year that the COVID-19 pandemic mercilessly hit the world, leaving a trail of loss both human and economic. Qatar has managed to limit its economic decline to a reasonable 2.5%, emerging as the top performer in the GCC. The IMF also expects the economy to expand 2.7% in 2021. Resilience and diversification have been buzzwords in Qatar for some time, yet never have they taken on so much meaning.
And as if that wasn’t enough for our interviewees this year to chew on, in early 2021 a years-long blockade on Qatar, implemented by some of its GCC neighbors, was lifted following talks. This could, over the course of the year, result in an increase in growth expectations, although accurate predictions are increasingly hard to come by due to global uncertainties. What is guaranteed, however, is that Qatar has learnt some important lessons during its period of regional isolation, having implemented a successful self-sufficiency strategy that could form the basis of a future, hydrocarbon-free economy.
The end of the blockade could also pave the way for one of Qatar’s more ambitious plans: to become a hub for a variety of sectors and industries in the region. This vision includes the attraction of industrial facilities to its free and economic zones in sectors as diverse as digital technologies, food processing, transport and logistics, downstream oil and gas, and pharmaceuticals. Qatar also boasts fiscal and financial incentives, solid digital and physical infrastructure, and ease of establishment regulations.
Qatar’s LNG sector also continues to grow, and several new North Field expansion project contracts have been awarded in spite of a six-month delay cause by COVID-19. Indeed, while long-term plans outline a future beyond hydrocarbons, natural gas is very much being portrayed as a stepping-stone resource, paving the way for cleaner energy sources while affording Qatar the liquidity to grow in new directions.
The severe industrialization of the country is not the only goal; Qatar also wants to become a powerful financial center able to attract capital from all over the world and offer refuge to international fortunes in times of crisis. Qatar started a banking and financial transformation process a couple of years ago that has reached new levels recently with the final completion of the first merger and the rebranding of the resulting bank as Dukhan Bank.
Infrastructure investment levels at Qatar’s ports, airport, national road system, and metro has also been outstanding in 2020, but will pale in comparison with 2021 and 2022 as the journey toward the 2022 FIFA World Cup enters its final stages. Furthermore, this decade symbolizes the beginning of the last decade of Qatar National Vision 2030. Special mention needs to be made to the new PPP Law and the future Property Investment Law as some of the drivers that will help materialize Qatar’s vision during its last 10-year phase.