Analyzing and forecasting the Gulf Cooperation Council's geopolitical environment

Qatar’s Economic Diversification and the World Cup

By Taimur Ali
September 24, 2015

Not long ago Qatar was known merely as a micro-state in the Middle East. Despite the Persian Gulf emirate’s carbon reserves, Qatar was largely under the shadow of its more powerful neighbors. Yet, in December 2010 Doha secured the bid to host the FIFA World Cup 2022, bringing the tiny Gulf Arab nation into the international spotlight and causing a surge in global media attention, particularly on social media.

Qatar, with the world’s highest GDP per capita, has seen tremendous prosperity in recent years. Many have simply attributed the emirate’s remarkable economic growth rates to the World Cup, claiming that hosting the event is the principle factor driving Qatar’s boom. In light of the ongoing investigation into the World Cup 2018 and 2022 bids and the possibility of Doha being stripped of its right to host the event, Qatar’s future has been cast into doubt. However, this narrow view of Qatar’s prosperity overlooks Doha’s well-devised and multifaceted development strategy that Qatari officials created and began to implement years before the World Cup came into the picture.

According to a report by Deloitte, Qatar is estimated to spend USD 200 billion on the World Cup, a tremendous investment compared to South Africa’s USD 4 billion in 2010 and Brazil’s USD 15 billion in 2014. A large proportion of this money is being spent on infrastructure development, which serves not only for the event but for the emirate’s development in general. Given that these projects are not only centered on the World Cup, there will not be a major setback in terms of spending if Qatar loses the hosting rights. According to a report by the Bank of America Merrill Lynch published in 2014, the estimated cost of losing the World Cup would be USD 16 billion, including lost revenue and cancellation of stadiums and other specific projects. This equates to a loss of 1-1.5 per capita GDP per annum each year until 2022, a figure that is not drastic given Qatar’s average GDP growth rate of 7 percent till 2015. Given the urgency with which Qatar is diversifying its economy—evidenced by recent growth in various sectors such as services, tourism, arts, and culture—these figures highlight how the current FIFA investigation does not pose a substantial threat to the emirate’s development.

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Taimur Ali is based at Georgetown Qatar. He has previously conducted research at the Research Society of International Law, Center for Policy and Governance, and the British Chamber of Commerce in Qatar.