Investing in Qatar

Qatar looks on the surface like a country with great economic promise. The nation is rich with cash and natural resources, and it’s been making small but sure strides toward economic and social reform. But is that enough to make it a place for your investing dollars? As we all know for every investment in any country or company possesses its good and bide sides, each.

The good side:
The economic data surrounding Qatar appears to indicate the potential for good investing opportunities. Profits from the petroleum industry have made it one of the highest per-capita-income countries in the world and have fueled one of the fastest GDP growth rates anywhere in the past few years. Qatar also sits near the planet’s largest natural gas field and will likely become the top liquefied natural gas (LNG) exporter in the near future. No wonder several U.S. companies, among them Chevron (NYSE: CVX), ExxonMobil (NYSE: XOM), Occidental Petroleum (NYSE: OXY), and Conoco Phillips (NYSE: COP), have joint development projects going on in the country.
Not to mention, that political signs point toward apparent stability in Qatar. Although it remains a conservative Muslim country, it does not, unlike its neighbor Saudi Arabia, allow religious fanatics to enforce adherence to dress codes or prayer attendance. In fact, Qatar’s emir, Sheikh Hamad bin Khalifa al-Thani, has pursued a path of cautious social and economic liberalization that has thus far met with success. He subsidizes the first truly free media in the Middle East, Al Jazeera, whose popularity has ignited a revolution in Middle Eastern journalism.

Clearly, the emir envisions Qatar competing with Dubai and the other members of the United Arab Emirates for future foreign business investment. And he just might succeed. In the wake of recent militant violence and beheadings of foreigners in Saudi Arabia, many Western companies have fled to Qatar and the Emirates.
The presence of two major United States military bases — Camp as-Sayliyah and al-Udeid Air Force Base — further ensures Qatar’s military stability. The U.S. military maintains an excellent relationship with the Qatari government.

The bad side:
As we described earlier, it really sounds like a good place to invest in, but hereby you will find what numbers tell, the complete opposite.
Like most other petroleum-rich Persian Gulf countries, Qatar is run by a very small group of men, the sheikhs, who own almost everything in the nation. As a result, any foreign company that wishes to do business in Qatar will likely have to have a sheikh sponsor it. These roughly 50 men are fabulously wealthy, and extremely powerful.

The rest of Qatar’s wealth is spread among its roughly 250,000 citizens, who receive monthly government stipends and other favors. That leaves about 630,000 other people who do not hold Qatari passports but still live and work in the country and ultimately depend on the largesse of a sponsoring sheikh for their employ. Many of these people are Palestinians, Lebanese, Egyptians, Iraqis, and various other Arabs from less fortunate nearby countries, but the vast majority comes from India and the Philippines. And their jobs and pay scales are all subject to a racism that places Gulf Arabs at the top, other Arabs in the middle, and Indians and Filipinos at the bottom.
It’s not likely to get better. The chasm separating rich and poor in Qatar will likely grow as the economy grows. And the problems it generates will remain a turbulent force churning beneath the surface of Qatari society. Already, the resentment between differing national communities is easy to see, for those who take the time to look.

Qatar is a small country with a small-country mentality. Its insularity tends to blind its citizens to the problems lurking right outside their borders. That means that although the nation may be secure in economic terms, it still remains subject to too much volatility on nearly every other level.