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Qatar: How did a small fishing counrty become the world’s richest country?

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Not so long ago, Doha, the capital of Qatar, which is currently set to host the football World Cup, was far from the vision of a modern and wealthy country. A century ago, in 1922, this tiny Gulf state with a population of 3 million and an area of fewer than 12,000 km2 was practically uninhabited. Let’s say it was a humble country of fishermen and pearl collectors, most of whom were nomadic travellers from the vast deserts of the Arabian Peninsula. Today, few Qataris over the age of 90 can recall the dire economic hardships of the 1930s and 1940s, when the Japanese invented pearl farming and ensured mass production which destroyed the Qatari economy.

In that decade, Qatar lost 30 percent of its residents, who left to seek economic opportunities abroad. Ten years later, in 1950, according to the United Nations, there were fewer than 24,000 inhabitants. However, the Qatari economy was on the verge of a revolutionary turning point at that time. A miracle truly saved it. That miracle was the discovery of one of the largest oil reserves in the world here. In fact, since the 1950s, the Qatari treasury has become increasingly wealthy, and this has also been the starting point for its citizens to become some of the richest citizens in the world. Now that Qatar has become a global star for its skyscrapers, luxurious artificial islands, and state-of-the-art stadiums.

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 region in 1916. After many years of exploration, the first deposits were discovered in 1939 in Dakhan, on the country’s west coast and about 80 km from Doha. However, it took a few more years to capitalise on this discovery. “The discovery came at the start of the Second World War, which halted oil exports until 1949, and the discovery was not immediately exploited.

Exporting oil opened many economic opportunities for Qatar, causing the country to transform and modernise rapidly. The attraction of the growing oil industry attracted immigrants and investors to Qatar, and thus its population began to grow. There were fewer than 25 thousand people in 1950; the population had grown to more than one lakh by 1970. A year later, Qatar was consolidated as an independent state following the end of British rule. However, a new era also started during this time, which led to a “second discovery” that created more wealth.

Natural gas discovery

In 1971, when “Explorer” engineers discovered vast natural gas deposits in the North Field on the northeast coast of Qatar. It took 14 years and dozens of drills to realise that the North Field was the world’s largest “non-associated” natural gas field, containing about 10 percent of its known gas reserves. After Russia and Iran, Qatar practically has the largest gas reserves in the world. Obviously, both of these countries are much larger than Qatar in terms of population and area. Northfield covers an area of about 6,000 km2, which is about half of its entire diameter of Qatar. Qatar Gas is the world’s largest producer of liquefied natural gas. The development of this industry is considered an important factor in Qatar’s economic development. However, like oil, gas exports’ profits took time. “For a long time, the demand wasn’t that big, and there wasn’t much interest in developing it, although everything started to change in the 1980s, when the infrastructure started to be built in stages and distributed within the country. In the 1990s, it was developed to export and became a great engine of the economy.

1995 Coup

Qatar’s economic development accelerated with the arrival of the twenty-first century. Between 2003 and 2004 alone, the GDP grew at a rate of 3.7 percent to 19.2 percent. Two years later, in 2006, the economy grew by 26.2 percent. Double-digit GDP growth has been a sign of Qatar’s strength for years, and it’s a trend that can’t be explained by gas prices alone. this became possible after the political change in which Hamad bin Khalifa Al Thani, the father of the current Emir Tamim bin Hamad Al Thani, assumed power in 1995.” Hamad bin Khalifa al-Thani deposed his father as Emir of the country while he was visiting Switzerland. Al-Thani is the family that is ruling Qatar for the past century and a half.  However, palace intrigues aside, analysts agree that the 1995 coup drew a line between the past and the future.

In 1996, a cargo full of natural gas left for Japan. It was the first major Qatari gas export and the start of a dollar industry that catapulted the Qataris to the pinnacle of global wealth. Qatar’s GDP per capita in 2021 was $61,276. If we take purchasing power into account, according to the World Bank, it reaches 93,521 US dollars, the highest in the world. Its low population makes a huge difference in this regard. Presently, the number of Qataris in the country is only around three to three lakhs, which is only 10 percent of the total population. Most of these people are foreigners. The state of Qatar does more than just guarantee high wages. It also has strong education and health systems.

Challenges facing Qatar’s economy

However, in recent years, Qatar’s impressive economic growth has suffered setbacks and is experiencing a slowdown. It also plans for future problems, like the fact that its economy depends on fossil fuels, which could be a problem in the future because of climate change. “In 2013 and 2014, oil prices fell, and economic diversification became the main topic of discussion,”. It also includes an embargo that Saudi Arabia, the United Arab Emirates, Bahrain, and Egypt put in place between 2017 and 2021 because of a diplomatic dispute with Doha that made the Qatari economy less stable.

“Qatar has yet to innovate in an economy dependent on gas or oil exports,”. That is why they are trying to expand the private sector and invest heavily worldwide to reduce their dependence on hydrocarbons. A good example of this effort is the Qatar Investment Authority’s presence in famous properties in cities such as London and New York.

“Or how they try to promote tourism and turn Doha into a hub for meetings, conferences, and events, especially now with the World Cup,”(Qatar wc). Qatar’s investment of more than two hundred million US dollars in the FIFA World Cup reflects the size of its economy. It is the most expensive World Cup in history, building eight stadiums, a new airport, and a new metro line. Most countries in the world are questioning the preparation for this World Cup (Qatar wc). Human rights organizations have expressed concern about the conditions of many construction workers, most of whom are from Pakistan, Nepal, India, and Bangladesh. Also, Qatar and FIFA have been accused of corruption and taking bribes. It is said that the process for giving Qatar the job of organizing the event in 2010 was not transparent. Despite these condemnations, this is much more than a World Cup (Qatar wc) for a small country that grew rich in record time and is now trying to position itself as a major geopolitical player as a modern and progressive nation.

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