World's fastest-growing economy may post 'double-digit' growth for next two years.
Qatar, the world’s fastest-growing economy, may slow by more than half in the next two years as the country completes its largest energy projects.
The Persian Gulf emirate, with the world’s third-largest reserves of natural gas, is likely to post “double-digit” growth for the next two years, said Ibrahim Ibrahim, economic adviser to Qatar’s emir.
Expansion will cool after that to an annual nominal rate of no more than 9 percent, assuming the government follows the guidance of senior economic planners, he said yesterday in an interview in the Qatari capital of Doha.
The International Monetary Fund forecasts that Qatar’s gross domestic product will increase this year by 19 percent, faster than any other economy and double the country’s growth rate for 2009. Energy wealth helped Qatar’s economy triple in size since 2004. The population doubled in the same period, as thousands of foreign workers arrived to build plants for liquefying natural gas and the world’s biggest facility for converting gas to liquid fuels.
“We are going to recommend a targeted economic growth that emphasizes sustainability, competitiveness, and not just simply a number,” Ibrahim said. While the country could maintain double-digit growth beyond 2012, “we don’t believe” that should be the strategy, he said.
Qatar has transformed itself in less than a century from subsistence on pearling to the world’s second-richest country per capita behind Lichtenstein, according to the US Central Intelligence Agency World Factbook.
Among the planners’ concerns is the risk Qatar’s largely foreign work force will expand and marginalize the role of natives, said Ibrahim, head of the General Secretariat for Development Planning. Most of the nation’s 1.6 million people are expatriates, and the population may grow as little as 500,000 by 2030 under the plan favored by the planning agency.
Qatar is the world’s largest producer of LNG, or gas cooled to a liquid for transportation by ship. By the end of this year, it is scheduled to complete the final two or 14 planned LNG units, raising annual production capacity to 77 million tons.
The country built its LNG plants in partnership with international energy companies including Exxon Mobil Corp, Royal Dutch Shell Plc, Total SA and ConocoPhillips. Shell’s Pearl GTL gas-to-liquids plant is due to be operating fully by next year.
Qatar plans no additional liquid gas or gas-to-liquid plants. A moratorium on developing the country’s offshore North Field, the world’s largest gas reservoir, prevents the construction of new plants before 2014 at the earliest.
Ibrahim said the growth targets set by the General Secretariat for Development Planning assume that oil and gas production volumes will remain “similar” to current levels through 2016.
Meanwhile, the secretariat recommends that Qatar emphasize technology and capital-intensive businesses over those that rely more heavily on labor, Ibrahim said.
“We are recommending a different type of development path that will reduce the dependence on foreign labor,” he said.
The country’s Emir Sheikh Hamad Bin Khalifa Al Thani has sought to turn his country into a regional center for education, research and culture and to diversify the economy away from oil and gas, which account for about half of Qatar’s gross domestic product.
The nation’s sovereign wealth fund, the Qatar Investment Authority, owns stakes in such diverse companies as Volkswagen AG, Barclays Plc and Britain’s Harrods department store. Six U.S. universities have opened campuses in Qatar, including Georgetown, Carnegie Mellon and Texas A&M.
“Our target is to reduce dependence on oil and gas,” Ibrahim said. (Bloomberg)