In December last year, the unthinkable nearly happened: the 15th Asian Games, Qatar’s largest entertainment event to date, was almost ruined by the wettest weather in 40 years. Millions tuned in from around the world to see if a nation half the size of Wales, but supposedly without the rain, could successfully pull off an event of this size.
The emir’s son, Sheikh Mohammed bin Hamad Al-Thani, the captain of the Qatar equestrian endurance team, rode his horse to the top of the Khalifa Stadium to light the Doha 2006 flame and the Games were underway. After a month of playing host to 12,500 participants, the Olympic Council of Asia hailed the event as one of its most successful. It was a defining moment for Qatar.
With a population of less than a million, of which 80 percent are expatriates, the Gulf state has set itself an ambitious target: attaining a regional hegemony that will give it prominence on the global stage, including a seat on the UN Security Council. To this end it is staging niche sporting events doubling as high-level networking opportunities.
It has the resources: the world’s third largest gas reserves give it economic clout. It is the largest producer of liquefied natural gas and will begin supplying gas to the United States and Britain by 2009. Its budget is a paragon of realism, based as it is on an oil price of $36 even though the price now hovers at the $60 mark. Its budget surplus is nearly three times its original 2,300 million Qatari dinar ($632 million) forecasts. Capital expenditure for the 2006 financial year alone was 20 billion dinars and is likely to be similar for the next.
The Asian Games were only a foretaste of the dizzyingly ambitious events the country hopes to stage. “We have a plan. Qatar is trying for the 2018 [soccer] World Cup,” said Sheikh Saoud bin Abdulrahman al-Thani, the head of Qatar’s National Olympic Committee, in January. “If Qatar wins the bid, we’ll have much more work than the Olympics.” Al-Thani was referring to an earlier announcement that Doha would be bidding for the 2016 Olympic Games.

On the rise. Qatar’s star has been on the rise since the Doha based Al Jazeera broadcaster announced it would be launching an English-language news channel. Also making the news has been the brisk deal making by the Qatar Investment Authority, which seeks to broaden Qatar’s asset portfolio as a hedge against any softening of energy prices. An audacious bid for British retail giant J. Sainsbury was followed by confirmation of its intent to acquire a 10 percent stake in Airbus’ parent company, European Aeronautic & Space Company. “You draw more international mileage if you go beyond oil and gas,” said Narayanappa Janardhan, a political analyst at the Gulf Research Center, an independent political and economic think-tank. “Gas brings the wealth, but you need to show your progressive nature,” Janardhan said.
The government’s 2025 National Vision certainly meets the “progressive” criterion. In the next 20 years the government is to attempt a complete overhaul of education, from pre-school to university, to prepare its citizens for participation in a hi-tech economy. “The government doesn’t want Qataris to end up being spectators in their own country,” said a Doha business consultant. “They want to create a knowledge based economy.” That, he said, is the purpose of such developments as the Qatar Science & Technology Park (QSTP) and the Qatar Financial Center. QSTP houses GE, Shell and Total, among other large multinationals, but, as its name suggests, it wants to acquire a name for itself as a center of research and development. In a similar vein, the Qatar Foundation, set up to stimulate R&D, has paid for such top-flight institutions as Cornell University to establish regional campuses at its multibillion-dollar Education City development. “We are building a society that can adapt to the challenges of modern society, while maintaining the cultural values that are important to its people,” said Sheikh Hamad bin Jabor al-Thani, the secretary general of the Planning Council.
Learning from its neighbor Saudi Arabia, Doha is pouring billions into broadening the economy. Whether in industry, tourism, real estate or financial services, the government is building an infrastructure to rival the rest of the region. “I would say it is not a question of what is holding back Qatar, but why it is doing so much,” said Janardhan.
This is a good point. Compared to Dubai, for example, which must diversify its economy as a matter of necessity, Qatar’s hydrocarbon wealth is secure for the long term. Some analysts have argued it should focus on its core business of petrochemicals or gas to liquids, rather than pitting itself against hospitality and financial services oriented Dubai. Yet in recent years it has done exactly that. Where Dubai has Knowledge Village and Academic City, Doha has Education City. For The Palm, substitute The Pearl.

Ominous rumblings. The rush to create cities of sophisticated modernity where only a generation ago there was empty desert has aroused criticism. “It’s creating a sense of competition to drive things further, but in the future there will be political overtones,” says Janardhan. “I think in its ambition it is trying to do a lot of things, but in a couple of years there will be a period of introspection and they will reassess their strategy.”
Already the cracks are beginning to show, and nowhere more so than in the labor market. According to a recent regional recruitment survey, nearly 40 percent of the Qatari workers polled said they were looking to leave. This is despite per capita income being among the highest in the world, at $55,000. Qatar relies almost entirely on foreign labor to drive the economy. The government has set aside $130 billion in infrastructure development for the next six years alone. That will take a lot of workers. At the Ras Laffan Industrial City, for example, where Royal/Dutch Shell is developing the Pearl GTL scheme, 100,000 workers will be required, according to a Planning Council estimate.
Convincing people to come will not be easy. Despite the sunny outlook - Qatar National Bank forecast nominal economic growth of about 15 percent in 2006 - Doha is feeling the strain. Inflation hit nearly 12 percent last year, up from 9 percent in 2005. Rental increases of about 25 percent were the primary cause as demand outstripped supply. Prices now compare with London.
The government recognizes that to meet the growing demand for labor, it must create an environment where people want to stay. Until now, the country has had little to offer expatriates other than good salaries. That is set to change. The Lusail development, a new city that will house 200,000 people along an 8.5 kilometer stretch of coastline, comes complete with leisure facilities of every description. The Islamic Museum has just opened, and more are to follow. According to TRI Consulting, 43 new hotels will be built by 2010.

‘No different.’ Can Qatar deliver? The lack of coordination between government departments is a concern. The Planning Council expends much of its energy combating inefficiency. It is supposed to draw up plans for the various agencies and oversee and monitor their progress, yet it has not met in the past three years. A new General Secretariat for Development Planning is under creation with a view to advising higher authorities on the development of the national strategic plans. “I think it would be mischievous to characterize issues related to development of the public sector administration as holding back the country,” said Sheikh Hamad. “In every country, there is a constant drive to improve and make the services and operation of government more efficient. Qatar is no different.”
The private sector needs convincing. Qatar’s economic transparency record is mixed. According to the Heritage Foundation’s 2007 Economic Freedom Index, it ranked 72nd out of 166 countries, behind countries like Oman and Jordan. Stock market regulation is still unclear, as is the exact role of the Qatar Financial Center. The country’s human rights record is questionable. Even the country’s own National Human Rights Committee has condemned the human rights abuse. “The violation of rights have reached such a degree that it will lead to dangerous social and economic implications. The inability to change employment, low salaries, ill-treatment and poor living conditions is a type of modern slavery,” it said in a report last year.
Doha is trying to be all things to all men and it may yet succeed. It covets the prestige that comes with hosting sporting events. It has the financial muscle to assert itself regionally. When it offered the US military a regional base after it was asked to leave Saudi Arabia, it proved it is not afraid to take a commanding position the political stage. Whether in the long term its drive to become a regional hub in all domains succeeds remains to be seen. For the moment, Qatar’s purse strings may pull it ahead of its Gulf neighbors.

Sporting ambitions

Qatar isn’t going to quit now that the Asian Games has put it ahead

The Asian Games may have been broadcast to over a billion people, but it seems Doha has set its sights on even grander schemes. “We have proved that we are capable of hosting the next sporting event, the Olympics,” said Sheikh Saoud bin Abdulrahman al-Thani, the secretary general of the Qatar National Olympic Chairman (QNOC). “It was the government’s long-term strategy to put Qatar on the world map through sport. To a great extent we’ve achieved that goal by successfully organizing the largest ever Asian Games.”
The International Olympic Committee will launch the bidding process later this year for the 2016 Games with the election due in 2009. The selection criteria are broken down into 11 themes including infrastructure, Olympic Village and safety. Dates are flexible. Having put in a large part of the infrastructure Qatar may have an advantage over its rivals, although a great deal more work on its tourism offering will be needed if it is to convince spectators and judges. “China took two attempts to do it,” said Sheikh Saoud. “We will win it first time.”
Also on its hit list is the soccer World Cup in 2018. In all likelihood, it would probably be unable to hold the event alone. The UAE has indicated its interest, so a joint bid may be the best option. “After 2014, the rotation system ends, so it’s unclear where the World Cup will go,” said a Fifa spokesman.
In the meantime, Qatar’s biggest objective is to propel itself onto the international scene. Qatar Airways CEO Akbar al-Baker will be ensuring the connections are in place and hoping the country does a better job marketing itself than during the Asian Games. “The only thing my country lacks is marketing,” he said. “We are very poor at it. We needed to make people aware by bombarding the media in advance.”
Finances are not a problem. “It isn’t about making money on their investment,” said an official at London based consultancy Sport Business. “The Asian Games cost probably more than $5 billion to stage and I doubt they recouped a fraction of that. It’s more to do with developing the Qatar brand and making sure that a lot of infrastructure was set up a lot faster than in the past.”

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