Introduction
Qatar is one of the fastest-growing economies in the modern world as it moves to cement its position on the global financial map. One of the strategies that the country’s leadership is applying to stimulate and accelerate economic growth in the country is through diversification of its economy. For a long time, the country had been relying heavily on its natural resources, specifically oil and gas.
However, in 2008, the Qatar Vision 2030 was launched, and it heralded a new approach to economic development and diversification with public-private partnerships (PPPs) being one of the key strategies to achieve the set goals. This paper seeks to evaluate whether PPP policies have been successful in achieving the set goals of diversifying the economy. The State of Qatar’s policies in the area of strengthening the partnership between the public and private sectors has led to a shift to economic diversification.
Economic Diversification through Policies
Qatar National Vision 2030 (QNV 2030) was launched in 2008, and the government highlighted its commitment to diversifying the country’s economy. The need for economic diversification arose from the realization that overrelying on natural resources for national income exposed the country to the erratic fluctuations of international energy prices. The government came up with a multi-pronged approach to achieve the diversification goal, including converting gas and oil revenue into improved infrastructure, supporting the creation of a skilled labor force, and encouraging innovation and entrepreneurship capabilities.
In addition, the government started encouraging the private sector to participate in economic diversification efforts through PPP. Ultimately, the concerted efforts from the government and the public sector would create a much-needed platform for economic diversification to place Qatar on the world’s financial map as a regional center for high-value service and industrial businesses on top of becoming a knowledge hub.
The QNV 2030 was only a starting point, and later on, the government released a detailed blueprint for economic diversification by publishing the Economic Diversification and Private Sector Development (EDPSD) strategy. This diversification framework focused on ensuring private sector-led economic growth by increasing productivity and competitiveness. The EDPSD provided policymakers and planners with elaborate criteria to identify viable sectors that would benefit from the diversification drive. Some of the identified sectors earmarked for development included information and communication technology (ICT), scientific and professional activities, financial services, manufacturing, logistics, and tourism.
Government planners then created sector-specific initiatives to be achieved in both the short and the long term. The first initiative was an eight-year plan named National Development Strategy 2011-2018 (NDS-1), and the second one was the five-year National Development Strategy 2018-2022 (NDS-2). Among other objectives, these initiatives aim at involving the private sector in economic diversification efforts through PPPs.
Assessment
Government policies to diversify the economy and move away from overlying on the country’s vast natural resources have started to produce positive results. For instance, in 2011, returns from the oil and gas industry accounted for 60.1 percent of the country’s GDP; however, in 2017, that figure had dropped to 48.2 percent (“Qatar Doubles Down on Economic Diversification”). In addition, the diversification efforts can be felt on the ground through the different non-hydrocarbon projects that the government, in collaboration with the private sector, has implemented. The logistics and tourism industries have benefited hugely from this diversification agenda.
For example, in 2014, the Hamad International Airport replaced the Doha International Airport (the former is 12 times larger than the latter), making Qatar one of the leading business, cargo, and leisure travel hubs in the region, with over 30 million passengers using the airport annually, as a significant improvement from 5 million passengers 10 years ago (“Qatar Doubles Down on Economic Diversification”).
Furthermore, the Hamad Port was opened in 2016, and it has the capacity to handle the world’s largest ships. After its completion, the port is expected to have “an annual capacity of 7.5m twenty-foot equivalent units…larger than globally significant facilities at Long Beach in the US, Yingkou in China and Colombo in Sri Lanka, and on a par with Kehin in Japan and Laem Chabang in Thailand” (“Qatar Doubles Down on Economic Diversification”). Similarly, the NDS-2 targets economic diversification by specifically focusing on the promotion of entrepreneurship in the country with greater focus and clear priorities (Ministry of Development Planning and Statistics 9).
For instance, the merger of the Qatar Development Bank with Enterprise Qatar was a timely strategy to boost entrepreneurship. Another institutional development targeted the establishment of the Qatar Science and Technology Park, together with the improvement of the Qatar Finance and Business Academy (“Qatar Doubles Down on Economic Diversification”). These institutions are meant to create and improve the knowledge base in the country as it prepares to strengthen professional services and other related business ventures.
Conclusion
The QNV 2030 envisaged a strategy through which the Qatari government would diversify its economy and shift from the traditional overreliance on natural resources for development. The NDS-1 and NDS-2 strategic plans, under the EDPSD umbrella, have created avenues through which the public and private sectors can work together and develop non-hydrocarbon sectors of the economy. The diversification efforts are achieving the intended purposes as shown in the available data. The significant drop in the contribution of oil and gas revenues to the GDP from 60.1 percent in 2011 to 48.2 percent in 2017 is a strong indication that the State of Qatar’s policies in the area of strengthening the partnership between the public and private sectors has led to a shift to economic diversification.
Works Cited
Ministry of Development Planning and Statistics. Qatar Second National Development Strategy 2018~2022. Gulf Publishing and Printing Company, 2018.
“Qatar Doubles Down on Economic Diversification.” Oxford Business Group, n.d. Web.