Resilient growth • Chapter summary

After a tumultuous 2020 for the world economy, Qatar saw its growth rate fall by around 2.5%, mostly due to the sharp drop in oil and gas prices. Qatar’s largest single export is petroleum gas, accounting for about 57% of its total exports in 2019.

However, the country is no stranger to economic shocks, after having been put under a land, sea, and air blockade by its neighboring countries in 2017. After the blockade began, the Qatari government initiated an ambitious, wide-ranging reform program to liberalize and diversify the country’s economy. The advancements made since then, and the level of resilience gained hence with, allowed Qatar to better navigate the effects of COVID-19. In fact, projections by the IMF indicate that Qatar’s economy is expected to grow by 2.7% in 2021, the fastest rate since the blockade began.

A recent IMF statement on the Qatari economy, dated December 2020, stated: “The ambitious structural reform agenda underpins Qatar’s economic diversification efforts to enhance long-term potential growth. The abolishment of the Kafala sponsorship system and strengthening labor protection are welcome steps in facilitating labor mobility and spur productivity. These measures along with the new real estate and public-private partnerships (PPP) laws should help Qatar improve its competitiveness. Reforms toward strengthening minority investor protection, contract enforcement, and insolvency resolution will further improve Qatar’s business environment, mobilize foreign direct investment, and support economic diversification.”

This chapter pays special attention to the long-awaited new PPP law, featuring interviews with key public figures and private powerhouses alike Prior to this law, PPPs were limited to water and power projects, but now new sectors are open for more private sector involvement. In one example, 45 schools are to be developed under a PPP development program. “The law provides a multitude of incentives to both local and foreign investors in terms of risk diversification and mitigation, and improved access to finance, in addition to financial and tax incentives granted to the winning bidder, the company undertaking the project, and its major shareholders or subcontractors,” stated Minister of Commerce and Industry Ali bin Ahmed Al Kuwari in an interview with The Business Year. The government hopes its new outlook will provide a win-win scenario for the state, its people, and its investors.

The Lusail city development is one of Qatar’s most powerful engines of growth