Qatar

Politics:

• Analysis

  Qatar politics: Quick View - Qatari poet sentenced to life in prison

  Event

  A Qatari poet, Mohammed al-Ajami, has been sentenced to life imprisonment on charges of "inciting to overthrow the ruling system" and "insulting the emir". He will appeal.

  Analysis

  The prosecution's case against Mr Ajami, also known as Mohammed Ibn al-Dheeb, was based on a poem he wrote in 2010 criticising the emir, Sheikh Hamad bin Khalifa al-Thani. Gulf activists believe that the authorities are also angered by a poem, entitled Tunisian Jasmine, he recited and uploaded to the Internet in January 2011, denouncing Arab governments across the region as "indiscriminate thieves". Under the Qatari penal code (Article 130), the charge of "inciting to overthrow the ruling system" carries the death penalty and "insulting the emir" a five-year jail term. Mr Ajami may at least hope that an appeal leads to a reduced sentence.

  The case is a slight blot on Qatar's international reputation, especially given its proactive involvement during and after the Arab Spring. Amnesty International has criticised Qatar for its treatment of Mr Ajami, arguing that his trial has fallen short of international fair trial standards, with court sessions held in secret and postponed repeatedly. Separately, the UN committee on torture recently urged Qatar to do more to safeguard against torture of prisoners during detention.

  Nevertheless, political stability is not currently at risk. Despite having limited freedom of expression, Qatar does not face the unemployment and poverty issues seen in Tunisia, Egypt and Libya; Qatar has one of the highest levels of GDP per head in the world. In comparison with other Gulf countries, Qatar also seems to be among the most stable. Furthermore, the emir is aware that in the long run political change is likely and he has vowed to hold elections in 2013 for two-thirds of the seats in the Majlis al-Shura (Advisory Council). Consequently, there have been only small tremors of dissent in Qatar.

  December 04, 2012

• Background

  Qatar: Political forces at a glance

  Political outlook: Political forces at a glance

  Present government: The political system is dominated by the emir, Sheikh Hamad bin Khalifa al-Thani, who rules with the assistance of the Council of Ministers and a 35-member Majlis al-Shura (Advisory Council), both of which are wholly appointed by the emir. However, under the 2005 constitution it is intended that the Advisory Council will be replaced by a two-thirds elected body with broader powers to scrutinise and propose legislation. The cabinet is dominated by male members of the ruling Al Thani family, although the first female cabinet minister was appointed in 2003, and the emir's wife, Sheikha Mozah bint Nasser al-Missned, wields considerable influence in health and education.

  Government factions: Since gaining formal independence in 1971, the country has yet to witness an orderly transition of power. Changes in leadership have been through palace coups, with the present emir seizing power in 1995 from his father, Sheikh Khalifa bin Hamad al-Thani, who had himself come to power by ousting his cousin, Sheikh Ahmed bin Ali al-Thani, in 1972. In both cases, the throne was seized when the incumbents were holidaying abroad. In an attempt to formalise the succession, the new constitution confirms Sheikh Hamad as emir with responsibility for appointing one of his sons as heir. In 2003 he appointed his fourth son, Sheikh Tamim bin Hamad al-Thani, as crown prince, replacing his third son. The emir's cousin, Sheikh Hamad bin Jassem bin Jabr al-Thani, who is prime minister and foreign minister, would help to ensure a stable transition were the emir to die.

  Extra-parliamentary forces: There is no significant opposition movement. The emir's grip on politics is strong, and his programme of gradual political and economic reform appears to be broadly accepted within Qatar.

  Next elections: At present the emir rules by decree, but the constitution envisages the creation of a new 45-member Advisory Council, two-thirds of which will be elected, with the remainder appointed by the emir. According to an announcement by the emir last November, elections for the Council will take place by the end of 2013.

  June 26, 2012

• Structure

  Qatar: Political structure

  Official name

  State of Qatar

  Form of state

  Emirate

  Legal system

  The 2005 constitution provides for an independent judiciary that should be answerable to "no power but the law". Judges may only be dismissed "in cases to be defined by law"

  Legislature

  Qatar's current Advisory Council was established in 1972, and is wholly appointed. It can issue advice on policy matters but has no formal legislative role. The 2005 constitution makes provision for a two-thirds-elected, 45-member parliament to be formed, which will have the power to draw up laws and question ministers. The emir announced in November 2011 that an election would be held in the second half of 2013

  Head of state

  The emir, Sheikh Hamad bin Khalifa al-Thani, succeeded to the throne in June 1995. In October 1996 he appointed as his heir his third son, Sheikh Jassem bin Hamad al-Thani. However, in August 2003 Sheikh Jassem unexpectedly resigned as crown prince and was replaced by his younger brother, Sheikh Tamim bin Hamad bin Khalifa al-Thani

  Executive

  The cabinet is headed by the prime minister, who is appointed by the emir. In April 2007 the first deputy prime minister and foreign affairs minister, Hamad bin Jassem bin Jabr al-Thani, replaced Abdullah bin Khalifa al-Thani as prime minister

  Main political parties

  Political parties are not permitted

  Government

  Prime minister & foreign affairs: Hamad bin Jassem bin Jabr al-Thani

  Deputy prime minister: Abdullah bin Hamad al-Attiyah

  Deputy prime minister & minister of state for cabinet affairs: Ahmed bin Abdullah al-Mahmoud

  Key ministers

  Business & trade: Jassem bin Abdel-Aziz al-Thani

  Defence: Hamad bin Khalifa al-Thani

  Education: Saad bin Ibrahim al-Mahmoud

  Endowments & Islamic affairs: Ghaith bin Mubarak al-Kuwari

  Energy & industry: Mohammed bin Saleh al-Sada

  Environment: Abdullah bin Mubarak al-Midhadhi

  Finance & economy: Youssef Hussein Kamal

  Interior: Abdullah bin Khaled al-Thani

  Justice: Hassan Abdullah al-Ghanem

  Labour: Nasser bin Abdullah al-Hamidi

  Municipal affairs & urban planning: Abdel-Rahman bin Khalifa al-Thani

  Public health: Abdullah bin Khalid al-Qahtani

  Social affairs: Nasser bin Abdullah al-Hamidi

  Key ministers of state

  Emiri diwan: Abdel-Rahman bin Saud al-Thani

  Foreign affairs: Khalid bin Mohammed al-Attiyah

  Interior: Abdullah bin Nasser al-Thani

  Central Bank governor

  Abdullah bin Saud bin Abdel-Aziz al-Thani

  March 18, 2013

• Outlook

  Qatar: Key developments

  Outlook for 2013-17

  • Qatar's leaders will focus on economic and foreign policy issues. Following regional unrest in 2011, they will initiate limited domestic political reforms and ensure that Qataris continue to benefit from the expanding economy.
  • Qatar will continue to pursue an assertive and independent foreign policy. Balancing its conflicting relations with the US and Iran will remain a priority.
  • The fiscal surplus (excluding most LNG revenue) widened to 8.3% of GDP in 2011/12 (April-March), driven by hydrocarbons earnings, and is forecast to average around 4% of GDP in 2013-17 as infrastructure spending surges.
  • With the expansion of LNG output complete for now, annual real GDP growth will slow to a still robust 5.4% on average in 2013-17, driven by non-oil sectors.
  • We expect inflation to rise steadily over the forecast period, from an average of 1.9% in 2012 to 5% in 2016-17, as work on World Cup-related projects intensifies and rental costs rise after a period of depressed house prices.
  • We estimate a current-account surplus of 28.4% of GDP in 2012 and forecast an average surplus of 19.2% of GDP in 2013-15. Rising imports and non-merchandise outflows will lower the surplus to 11% of GDP on average in 2016-17.

  Review

  • The energy and industry minister, Mohammed bin Saleh al-Sada, announced plans to expand petrochemicals production to 23m tonnes/year (t/y) by 2020, from around 10 t/y currently, to help drive non-oil GDP growth.
  • The utilities regulator, the Qatar General Electricity and Water Corporation (Kahramaa), has outlined plans for a US$22bn upgrade to the power and water sectors over the next eight years.
  • The government is creating a new investment company, Doha Global Investment, which will trade in shares, bonds, real estate and private equities overseas. It will be listed on the Qatar Exchange.
  • The combined assets of commercial banks grew by 18% year on year to QR817bn (US$225bn) at end-2012, according to the Qatar Central Bank. Both loans and deposits were up by 26%, largely driven by the public sector.
  • The banking sector remains well capitalised and profitable. In September 2012 the risk-weighted capital-adequacy ratio was 20%. In January 2013 the loan/deposit ratio was 107%, falling from a rather high 124% in April 2012.
  • Qatar's stock of international reserves doubled in 2012, reaching US$33bn in December, up from US$16.8bn at end-2011, owing to strong energy earnings. We estimate that reserves covered nine months of imports in 2012.

  March 18, 2013

Economy:

• Background

  Qatar: Country fact sheet

  Fact sheet

  Annual data	2012a	Historical averages (%)	2008-12
  Population (m)	1.8	Population growth	6.6
  GDP (US$ bn; market exchange rate)	194.4	Real GDP growth	12.9
  GDP (US$ bn; purchasing power parity)	186.8b	Real domestic demand growth	9.5
  GDP per head (US$; market exchange rate)	105,824	Inflation	2.1
  GDP per head (US$; purchasing power parity)	101,714b	Current-account balance (% of GDP)	18.8
  Exchange rate (av) QR:US$	3.64	FDI inflows (% of GDP)	3.1
  a Actual. b The Economist Intelligence Unit estimates.

  Download the numbers in Excel

  Background: Qatar became independent from the UK in 1971, but the then emir, Ahmed bin Ali al-Thani, was toppled soon afterwards by his cousin, Sheikh Khalifa bin Hamad al-Thani. Sheikh Khalifa in turn was removed in a palace coup by his son, Sheikh Hamad bin Khalifa al-Thani, in 1995. Sheikh Hamad has pursued a programme of gradual political and economic reform, with a particular focus on developing the country's massive natural gas reserves.

  Political structure: Power in Qatar is concentrated in the hands of the emir, who governs with the assistance of a cabinet that he appoints. However, under the 2005 constitution a new national assembly should be created, of which two-thirds of the members will be elected. Differences within the ruling Al Thani family have led to a series of delays and a restriction of the franchise, but an electoral law was finally approved in May 2008, paving the way for an election, which is set to take place by the end of 2013. Although the new body would have powers to propose legislation and dismiss ministers, sufficient safeguards are in place to ensure that the emir will continue to direct government policy.

  Policy issues: With work on a range of gas-based export projects under way, the government has imposed a moratorium, due to remain in place at least until 2015, on the agreement of new gas export deals, in order to ease capacity constraints and re-evaluate the country's energy reserves. It has amended the investment law to draw greater foreign investment into non-energy areas of the economy, including the financial sector, petrochemicals and tourism, and to target foreign acquisition opportunities that could assist this diversification strategy.

  Taxation: Neither expatriates nor Qatari nationals are subject to personal taxation. Firms from outside the Gulf Co-operation Council are required to pay corporation tax, although this fell from a maximum of 35% to a flat rate of 10% from January 2010. (Profits in the hydrocarbons sector are taxed differently, according to the share of the foreign company in the project and the level of capital investment.) There are proposals to establish various specialised tax-free zones.

  Foreign trade: Merchandise exports have surged in recent years, as oil prices have increased and energy export volumes have grown. Despite rising import spending and a widening non-merchandise deficit, the current-account surplus increased from US$3.8bn (19.7% of GDP) in 2002 to an estimated US$52bn (30% of GDP) in 2011.

  Major exports 2011	% of total	Major imports 2011	% of total
  Crude oil	15.9	Machinery & mechanical appliances	26.1
  Liquefied natural gas	34.4	Base metals	18.8
  Petrochemicals	31.1	Vehicles & other transport equipment	14.2
  Natural gas liquids	3.6	Food products	6.6
  Leading markets 2011	% of total	Leading suppliers 2011	% of total
  Japan	26.6	US	12.8
  South Korea	18.3	UAE	12.4
  India	8.1	Saudi Arabia	9.3
  Singapore	6.6	UK	6.2

  Download the numbers in Excel

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  March 18, 2013

• Structure

  Qatar: Economic structure

  Data and charts: Annual trends charts

  
  

  

  March 18, 2013

• Outlook

  Qatar: Country outlook

  Qatar: Country outlook

  FROM THE ECONOMIST INTELLIGENCE UNIT

  POLITICAL STABILITY: The Economist Intelligence Unit expects Qatar to remain stable and secure in 2013-17 under the rule of the emir, Sheikh Hamad bin Khalifa al-Thani. There will be little vocal opposition to his rule and economic policies, largely because the government has ensured that Qatari citizens benefit from the country's huge hydrocarbons wealth, but also because the Qatari press exercises self-censorship. The civil unrest that has taken place across much of the region since early 2011 is unlikely to spread to Qatar, which, despite having limited freedom of expression, faces few of the unemployment and poverty issues seen in Tunisia, Egypt, Libya and Bahrain. The emir did, however, take a pre-emptive step in 2011 to ensure that the Qatari population supports the system of governance, by setting a timeframe for the inauguration of a two-thirds-elected Majlis al-Shura (Advisory Council). The planned council will have only limited powers, and widening these will be opposed by some of the powerful local families, who favour a steadfastly conservative political system that protects vested interests.

  ELECTION WATCH: An electoral law passed in 2008 paved the way for the creation of a two-thirds-elected Advisory Council with limited legislative powers. The term of the current (fully appointed) Council was subsequently extended. The emir announced in November 2011 that an election would be held in the second half of 2013, but even if this were to go ahead as planned, the ruling family would maintain its hegemony over policymaking because of the limited powers granted to the Council by the 2003 constitution. The next election to the Central Municipal Council (CMC, a 29-member advisory body that is elected by Qatari citizens) is due in 2015. However, the CMC has no executive or legislative power.

  INTERNATIONAL RELATIONS: Qatar will maintain its high-profile foreign policy, fronted by Sheikh Hamad bin Jassem. By using its web of myriad (and at times conflicting) alliances in the region and beyond, Qatar has projected itself as an impartial mediator in many regional conflicts, often backing up its efforts with financial assistance. However, in the past couple of years Qatar has also gone beyond its role as mediator, participating, for example, in the NATO-led military intervention in Libya. More recently, Qatar has been spearheading Arab League efforts to resolve the civil war in Syria, calling for military intervention, and has made clear its opposition to the regime of Bashar al-Assad. In November Qatar took a leading role in negotiations in Doha, the capital, to forge a unified Syrian opposition. The talks (which were pushed by the US) resulted in a new opposition grouping, the Syrian National Coalition. With its headquarters in Doha and offices in Turkey and Egypt, it is designed to act as a Syrian government-in-exile and to funnel all Western and Arab military and non-military aid to Syrian fighters.

  POLICY TRENDS: Qatar achieved its target of expanding its liquefied natural gas (LNG) production capacity to 77m tonnes/year in 2011. A moratorium on the agreement of new gas-export projects is in place until at least 2015, which will only be lifted on the basis of the results of a study into the North Field's long-term potential and projections of global gas demand. The government will concentrate on projects that further domestic economic diversification, in particular in the downstream sector (with the aim of doubling petrochemicals production by 2020) and some industry, such as expanding aluminium production. Qatar has traditionally used loans and bonds to finance economic development projects. The government and a number of major Qatari firms will continue to tap credit markets for both refinancing and expansion. The sovereign issued a US$5bn bond in November 2011 and US$4bn-worth of sukuk (Islamic securities) in July 2012. If any key projects face delays owing to a lack of credit, the government could draw on its sovereign wealth fund, the Qatar Investment Authority (QIA).

  ECONOMIC GROWTH: Real GDP growth is slowing now that the current round of investment in the country's gas export capacity has been completed--we assume this capacity will stay at its current level throughout the forecast period. Qatar's economic growth soared in 2010-11, averaging 15% a year, largely owing to the near-doubling of LNG production and the start of gas-to-liquids (GTL) output at a time of expansionary domestic economic policy and rising global hydrocarbons prices. Growth weakened during January-September 2012, and we estimate that the rate of expansion was 5.8% in 2012. We forecast that real GDP growth will ease further, to 4.7%, in 2013, before picking up to an average of around 5.6% in 2014-17, driven almost exclusively by non-hydrocarbons sectors. The government is expected to maintain high levels of capital spending on education, health and transport in 2013-17, as well as allocating rising amounts to expand capacity in the power and water sectors. Also, through state-owned Qatar Petroleum, substantial investment will take place in the downstream sector. Owing to immigration, population growth is projected to remain strong over the forecast period, at an annual average of around 7%, which will in turn support domestic demand. Growth will benefit from high levels of investment in infrastructure, especially as work proceeds on projects related to the World Cup.

  INFLATION: In 2012 consumer price inflation averaged 1.9%, the same as in 2011. Strong supply in the housing market, coupled with lower international commodity prices, helped to contain overall inflationary pressures in 2012 and offset the inflationary impact of the surge in liquidity following large salary increases for Qatari public-sector workers in 2011 and generally expansionary domestic monetary and fiscal conditions. In recent months housing costs have become less of a cushioning factor, with rental prices showing steady increases. Partly as a result of this, inflation stepped up to 3.4% year on year in January. On average in 2013 we forecast that inflation will accelerate to 3.1% and further, to 4.6% on average in 2014-17, as high liquidity persists, population growth continues, World Cup-related projects pick up pace and the problem of excess supply in the housing market eases. However, there are both upside and downside risks to the forecast, depending on the level of immigration, the outlook for the US dollar and developments in the real estate market.

  EXCHANGE RATES: The riyal is pegged to the dollar at a rate of QR3.64:US$1. The authorities seem committed to maintaining the current exchange-rate regime, arguing not only that Qatar's gas and oil exports are denominated in the US currency, but also that the peg offers stability and reassurance to investors. This outweighs the constraints that a peg imposes on monetary policy. Pressure for revaluation is unlikely to return unless the dollar weakens substantially later in the forecast period, which is not our central forecast. Monetary union (a single currency) for the Gulf Co-operation Council (excluding Oman and the UAE) appears unlikely in 2013-17. Therefore, the riyal's peg is expected to remain in place throughout the forecast period. Nevertheless, there are ongoing discussion about changes to the peg, and some within the Qatar Central Bank, during periods of heightened inflation, have pushed for a revaluation of the peg, strengthening the riyal against the dollar.

  EXTERNAL SECTOR: We estimate that Qatar retuned another large current-account surplus in 2012, of around 28% of GDP. We expect the surplus to remain at high levels in 2013-17, averaging 16% of GDP, but declining to 11% of GDP in 2016-17. The trade balance drove the rise in the current-account surplus in 2011 as new LNG and GTL production came on stream, coinciding with high oil and LNG prices. Lower volume growth in hydrocarbons exports, together with oil and gas price movements, will contribute to a substantial moderation in export revenue growth in 2013-17. Despite the winding down of capital imports for the gas industrialisation programme, the import bill will grow robustly. This will be driven by rising demand for consumer goods from a growing population and purchases of capital imports as work intensifies on World Cup-related infrastructure and on projects to boost economic diversification. As a result, the trade surplus will moderate but remain large at an annual average of around US$80bn in 2013-17. With workers' remittances from Qatar rising strongly and income debits surging owing to the repatriation of foreign companies' profits, net non-merchandise outflows will remain sizeable over the forecast period.

  March 07, 2013

• Forecast

  Qatar: Country forecast summary

  Country forecast overview: Highlights

  • Qatar will maintain an assertive and independent foreign policy, seeking international prestige to match its growing economic power. It will try to maintain cordial relations with Iran despite continuing to host substantial US military facilities. This may become increasingly challenging as tensions between Iran and the West rise over the former's nuclear programme.
  • The emir, Sheikh Hamad bin Khalifa al-Thani, will retain a firm grip on policymaking. Although the long-postponed inauguration of a two-thirds-elected Majlis al-Shura (Advisory Council) is set to take place by the end of 2013, neither the emir nor his circle of advisers would be significantly affected, given the constitutional limitations on its powers.
  • The Qatari riyal is likely to remain pegged to the US dollar. There are proponents of revaluing the peg, but stronger pressure for revaluation is unlikely to return unless the dollar weakens substantially (which is not our central forecast). Monetary union (a single currency) for the Gulf Co-operation Council (excluding Oman and the UAE) appears unlikely in 2013-17.
  • Consumer price inflation is expected to rise steadily over the forecast period, from an average of 1.9% in 2012 to 5% in 2016-17, as work on World Cup-related projects and other infrastructure developments intensifies, population growth continues and monetary policy remains accommodative.
  • The price of Qatari crude oil is estimated at an average of US$111/barrel in 2012 and is forecast to average US$106/b in 2013-17. Liquefied natural gas (LNG) prices are forecast to remain high by historical standards, although there is a risk that increased global supply could mean lower than forecast prices in 2015-17.
  • The government is not likely to end its moratorium on the agreement of new gas export projects before a detailed study of the impact of gas production on the health of the North Field has been completed, and almost certainly not before 2015. Fears of potential future global oversupply in LNG may also reduce interest in additional gas export projects. However, the emirate will actively expand its petrochemical capability. As a result, real GDP growth will slow to an annual average of 5.4% in 2013-17, from double-digit growth in recent years.
  • The current-account surplus, which is driven by the trade balance, will remain substantial throughout the forecast period. We estimate a current-account surplus of 28% of GDP in 2012 and forecast an average surplus of 19% of GDP in 2013-15. Rising imports and non-merchandise outflows will lower the surplus to an average of 11% of GDP in 2016-17.

  

  March 18, 2013

View detailed map

Country Briefing

Land area

11,521 sq km

Population

1,707,756 at end-2011 (Qatar Statistics Authority)

Main towns

Doha (capital), Messaieed and Ras Laffan (industrial cities)

Climate

Summer, hot and humid; winter, mild with minimal rainfall

Weather in Doha (altitude 5 metres)

Hottest months, July-September, when maximum temperature can be 45°C and humidity 85%; coldest months, December-March, average temperature 10-20°C; driest month, August; wettest month, December; annual average rainfall 39 mm

Language

Arabic; English widely used

Measures

UK (imperial) and metric systems

Currency

Qatari riyal (QR) = 100 dirhams. Exchange rate pegged at QR3.64:US$1

Time

3 hours ahead of GMT

Fiscal year

April 1st-March 31st

Public holidays

The dates of Islamic holidays are based on the lunar calendar and are therefore approximate: Eid al-Fitr (end of Ramadan, August 19th 2012); Eid al-Adha (October 26th 2012)

Fixed secular holidays are the Emir's Accession (June 27th); Independence Day (September 3rd); National Day (December 18th)

January 01, 2013