Qatar has achieved one of the highest growth rates for GDP (just over 6.5 per cent) among the GCC countries – a remarkable achievement considering that it already has the highest GDP per capita in the world, that is short of $100,000.
From a wealth management perspective, this translates into Qatar recording the highest average wealth of $153,300 per adult in the GCC, compared to $126,790 in the UAE, $119,100 in Kuwait, $37,345 in the KSA (Saudi Arabia) and $7,280 in Egypt, according to a Credit Suisse report in 2013.
These numbers are indicative of Qatar’s potential for wealth generation, mainly through prudent exploitation of its vast fossil fuel reserves. It is to be noted that at current rates, Qatar’s reserves could last more than 150 years.
The Qatari government’s aggressive diversification plans into non-energy related sectors like hospitality and financial services could constitute the next growth phase. Fostering a knowledge-based economy, is planned in and could result in the proliferation of wealth-generation opportunities.
This will broaden the country’s pool of entrepreneurs, and provide new opportunity avenues for overseas capital.
Qatar Exchange’s MSCI was upgraded in 2014 to “emerging-market” status and it has coincided with the government judicious efforts to broad-base the economy from its over-dependence on hydrocarbons resources. Foreign investors are for instance being encouraged to channel more funds to the local bourse through raising foreign ownership limits on some Qatari firms.
Considerable investment in the expensive infrastructure needed to compress natural gas into liquid form (LNG) to facilitate transportation by sea, is also aiding the transition of Qatar’s economy, as low unit costs give it a competitive advantage against suppliers like Australia and Brazil. Several countries looking to reduce dependence on Russian gas are now dependent on LNG from Qatar, which accounts for a third of the global market.
With the highest savings rate reckoned to be at 60.8 per cent of GDP, Qatar has good potential for investing in new sectors outside the usual hydrocarbons, and an ambitious programme of urban and infrastructure development is underway to facilitate this goal.
Qatar appears to be effectively using the advantages of its relatively small population to restructure and accelerate the process of urbanisation – a process that is bound to attract entrepreneurs to the increasingly good opportunities in the construction, retail and services generally. Qatar is attracting private banking and wealth management services and this trend is forecast to continue for several years to come, to meet the aspirations of its growing ranks of youthful well-educated entrepreneurs and professionals.