How Qatar got so rich, and its future plans after the 2022 World Cup (2024)

Qatar – or the State of Qatar, to give it its full name– is a small country in the Middle East that's surrounded by the Persian Gulf and borders with Saudi Arabia.

The nation is famed for its outrageous wealth. Qatari residentshave one of the highest monthly netsalaries in the world, while the state also owns or part-owns a number ofglobal icons, ranging from New York's Empire State Building to France's Paris Saint-Germain football club.

Having controversially held the 2022 FIFA World Cup– after Qatar spent a reported $161 million (£118.8m) on its successful bid to host it – read on as we examine how, exactly, the countrycame to be so wealthy and what it spends its money on.

All dollar amounts in US dollars.

According to Worldometer, Qatar has an estimated population of around threemillion people.

Employment in its large natural gas industry attractsmany youngmen. On the flipside, the state has one of the lowest numbersof female residentsin the world, with women accounting for just 25% of the population.

Qatar isalso a small country in terms of land and spansjust over 4,400 square miles (11,396 sq. km), which makes it roughly the same size as Jamaica.

There are dozens of countries that are rich in oil,but mosthaven't fared quite as well as Qatar.

The countryhas been savvy with its liquid gold, keepingback reserves to avoid being badly hit by economic dips.

According to BP's Statistical Review of World Energy 2022, the state wasthe 14th largest global oil producer in 2021, producing 1.746million barrels a day despite being one of the world's smallest countries.

That very same year, Qatar exported $66.1 billion (£54.7bn) worth of mineral fuels, including oil.

Skyrocketing oil prices have played right into Qatar's hands.

Earlier this year, theprice of oil hit $90 (£66) per barrel for the first time since 2014.While this wasn't great news for most of the world, ithelped toboost the post-pandemic economic recovery of the countriesthat are blessed with natural oil reserves, like Qatar.

According to the World Bank'sGulf Economic Update, the member states of the Gulf Corporation Council – namelyQatar, Bahrain, Saudi Arabia, Oman, Kuwait, and the UAE – could see their economies expand by 6.9% before the end of 2022.

Qatar has also profited from having one of the world's largest natural gas supplies.

Shared with its Persian Gulf neighbour Iran, the South Pars/North Dome Gas-Condensate field was discoverednortheast of Qatar'scoastline in 1971. It hasbecome the world's largest exporterand fifth-largest producerof liquified natural gas.

Qatarleft the Organization of the Petroleum Exporting Countries(OPEC) in 2018 to focus on growing its gas industry and diversifying away from oil.However, it drewcontroversy in 2021 whenclaiming itsenormous gas exports are indicative of its"pioneering role" in tackling climate change.

While gas is less polluting than coal, it's by no means a green fuel. And at the same time,Qatar had the largest carbon dioxideemissions per capita in the world in 2020 and 2021, at 37.02 metric tonnes and 35.59 metric tonnes respectively according toStatista.

As soon as the scale and worth of Qatar's natural gas and oil supplies were realised, the country got busy partnering with the world's largest energy suppliers, including America's ExxonMobil.

Qatar welcomed the industry'sexpertise and started to workwith the pros to build tankers and distribution pipelines. This profitable partnership continues to this very day.

The Observatory of Economic Complexity (OEC) reports that Qatar exported $22.2billion (£18.4billion) worth of petroleum gas in 2020, the most recent year for which it has data.

Qatar has since turned itself into an international power base, both literally and figuratively, by becoming a major supplier of liquid natural gas to foreign territories.

Among its largest customers are India, Japan, China, Korea, and various nations across Europe.The UK, for example, imported almost 97 terawatt-hours worth of liquified natural gas from Qatar in 2020.

This is a huge source of revenue for the Middle Eastern state.

Qatari citizens are amongthe highest paid in the world. According to the International Monetary Fund (IMF), the average GDP per capita in Qatar is around $113,670 (£94.2k).

As employees aren't taxed on their earnings and receive a range of additional benefits, theirtake-home pay is worth considerably more than their actualsalary.

According toWorld Population Review, thenumber of native Qatari citizens living in the country accounts for less than 15% of the total population.

The Qatari government richly rewards its subjects. The state's healthcare system is consistently rated amongst the best in the world, with care either free or heavily subsidised. Residentsalso enjoysfree education, tax exemptions, and free or subsidised housing.

With such a small native population, the bulk of the Qatari workforce is made up ofmigrants.

There has been a huge increase in the state's immigrant population, with the highest numbers coming from India, Bangladesh, and Nepal.

The majority are temporary labourers working in the oil, gasand construction industries, though some are well-educated foreigners in more senior positions.

Qatar being chosen as the host ofthe2022 FIFA World Cup resulted in thousands of construction job vacancies.

In 2017, minister of finance Ali Shareef Al Emadi announced that the country would be spending around $500 million (£368m) a week on projects relating to the World Cup. This would cover the construction of stadiums, camps, and player villages, as well as the improvement of general infrastructure.

According to Forbes,Qatar has sinceinvested a total of $220billion (£182.4bn), making this year's World Cup the most expensive in history.

Government officials have never confirmed the country's total expenditure on hosting the tournament, although there are whispers about how the rumoured sum has been spent.

Somewhere between$6.5 billion and $10 billion (£5.4bn–£8.3bn) has gone towards building seven new stadiums. Now the World Cup is over, many of these sports grounds will be deconstructed and donated to other countries, or entirely repurposed.

Another major expense for the Qatari government has been the estimated $277 million (£230m) that it offered former English footballer David Beckham (pictured) to be an ambassador for the event.Beckham, who's come under fire for accepting the deal, will reportedly receive the total sum over the next decade.

And it's not just the financial cost of the tournamentthat's shocked the world...

The human cost of hosting the globalsoccer tournament has also proventragically high, with Qatar facing fierce criticism over the conditions its construction workers have been forced to endure.

In fact, more than 6,500 migrant workers have died inthe decade following the nation's successful World Cup bid, according to a report published by theGuardianin February 2021.

Hailing from India, Bangladesh, Pakistan, Nepal, and Sri Lanka, these workers predominantly came to Qatar to build the country's World Cup infrastructure.

Almost 40 of the deaths have been directly linked to the construction of its seven new stadiums, while others have been attributed toinadequate or dangerous housing. Some workers are even said to have takentheir own lives.

Back in 2005, Qatar created the Qatar Investment Authority (QIA) to manage its sovereign wealth fund.

The fund aimsto diversify and invest the country's resources. Much of this wealth is invested abroad, with more than $366.7billion (£270bn) in assets spread around the world.

Qatar Holding, a division of QIA, owns the UK's world-famous department store, Harrods.

In 2017, in fact, it was reported that Qatar owned more land in London than the Queen, with the country's portfolio includingthe Shard, the 2012 Olympic Village, and even a stake in the Canary Wharf financial district.

It's also ashareholder in UK bank Barclays, supermarket chain Sainsbury's, and the airline group IAG, which itself owns flight brands British Airways and Iberia.

In March 2017, QIA announced plans to invest $5 billion (£3.5bn) in the UK by the end of this year, on top ofthe $40 billion (£28bn) that Qatar had already invested in the country.

More recently, in November 2021, a partnership between the state and British carmaker Rolls-Royce was announced.Thedeal, which will see billions of pounds invested into green engineering projects,is considered to bea boost to the UK economy at a time of great uncertainty following Brexit.

Earlier this year, Qatar announced it would be investing an additional $12billion (£10bn) into the UK over the next five years. However, the nationis reportedly now "reviewing" its investment ties with the country after adverts for the Qatari World Cup were banned from public transport in London.

Back in 2019, London mayor Sadiq Khan banned Transport for London (TfL) services from displaying adspromoting countries that still impose the death penalty for LGBTQ+ people – including Qatar.

The QIA has also heavily invested in America. It has an almost10% stake in the company that owns the Empire State Building and has invested around$3.5 billion (£2.8bn) in Uber, which is headquartered in San Francisco.

Qatar has also openedan office in Silicon Valley to focus on technology as part of its expansion away from oil and gas.

While the QIAis predominantly invested in North America and Europe, it has also turned its attention to East Asiain an effort to diversify its portfolio.

The organisation bought the Asia Square Tower 1 in Singapore for a reported$2.59 billion (£1.85bn) back in 2016 and, three years later, paid $450 million (£331m) for a stake in Adani Electricity Mumbai Limited.

To further expand its presence in Asia, it alsoset up a Singapore subsidiary in 2021, known as QIA Advisory Asia Pacific.

Through its sovereign wealth fund, Qatar has also taken a stake in the highly lucrative top-flight European football market.

In 2011, it paid around $73million (£59m) for a 70% stake in French club Paris Saint-Germain (PSG), planning to benefit from TV rights, ticket sales, and merchandising. It also hoped that its involvement in PSG would boost its standing ahead of the World Cup.

PSG has made some headline-grabbing acquisitions in recent years, including paying$275 million (£199m) in 2017 forBarcelona'sNeymar and a further$230 million (£166m) later that year forthe transfer ofKylian Mbappéfrom rival team AS Monaco.

According to estimates from Forbes, Mbappé is the World Cup's highest-paid player and is expected to make $128 million (£106.5m) off the back of the 2022/23 season.

And it's not just sporting brands that Qatar is interested in.

The QIA has a 10% stake incar manufacturer Volkswagen, with QIA CEOMansoor Bin Ebrahim Al-Mahmoud even holding a seat on the automaker's supervisory board.

Qatar also has majority ownership of severalluxury hotels including Claridges, andmade a profit of nearly $900 million (£664m) from selling its shares in Tiffany & Co. in 2021.

News channel Al Jazeera is also owned by Qatar.

As well as helping develop the state'sglobal influence, the channelalso had the potential to be a lucrative income source. However,Al Jazeera has been no stranger to controversy.

Seen as a political tool, many advertisers have steeredaway from the channel. It's also had to deal with highnumbers of viewerswatching it for free via illegal satellite dishes.

At the start of this year, Al Jazeerasuffered another hit when it was forced to shelve Rightly, a spin-off YouTube platform that was aimed at America's right-wing population.

More than 100 Al Jazeera employees campaigned for the platform to be pulled, particularly afterthe riots at the US Capitol in January 2021, claiming that Rightlywould "irreparably tarnish" the channel's reputation.

The Qatar Foundation is responsible for Education City, a vast campus in west Doha that is home to several domestic and international educational institutions.

It was established to make Qatar a world-class academic location. Georgetown, Carnegie Mellon University, and Weill Cornell Medical College are just some of the foreign institutions with bases there.

It'sthought that Qatar invests around $404.8 million (£292.7m) a year to host the US campuses alone.

With so much money to spend,Qatar saw the benefits of developing its financial services industry.

The Qatar Financial Centre (QFC) was founded in 2005 at a cost of $5 billion, the equivalent of over $7.6 billion (£6.3bn) today. The QFC ischarged with encouraging foreign businesses to invest in the country and acts as abase for organisations that are looking to expand into and from the Middle East.

It recorded a 66% year-on-yearincrease in new firms being licensed in 2017, and has reportedly helped more than 1,200 companies start operating in Qatar since its 2005 formation.

As well as developing its educational and economic systems, Qatar has pumped billions of dollars into arts and culture.

The state spent $220 million (£159m) to construct its new Museum of Islamic Art and a further $434 million (£320m) to build the Qatar National Museum, with both landmarks located in capital city Doha.

In turn, these new national institutions are slowly helping to invigorate the local art gallery market.

Qatar launched its first renewable energy strategy in 2017 and is aimingto produce 20% of its energy through solar power by 2030.

With the world looking to reduce its reliance on fossil fuels, there's a possibility that Qatar's lucrative gas industry may not be quite so profitable in the future – despite the country'sclaim that it's an eco-friendly option.

This concern is driving the state's continued diversificationas it looks to find alternative revenue streams, including tech and real estate.

Qatar has been accused by its neighbouring states of supporting extremist groups that are threatening the stability of the Middle East.

Saudi Arabia, the United Arab Emirates (UAE), Bahrain, and Egypt all cut diplomatic ties with Qatar in June 2017 and were later joined by a number of others. The nationsalso closed their airspace to Qatari aircraft, a move that badly affected Qatar's burgeoning tourism industry.

It wasn't until January 2021 that these decisions were overturned, with Saudi Arabia reopening its airspace and borders to its Middle Eastern neighbour for the first time in four years.

A report by Capital Economics found that Qatar's tourism and property sectors were badly hit from these blockades.

In the wake of the bans, Qatari property prices dropped by just under 10%, while foreign visitor arrivals were thought to have decreased by 20% fromNovember 2016.

Despite these sanctions, Qatar's economy has stillgrown over the past decade, largely thanks to the profitability of its oil and gas industry.

Qatar has created incredibly strong tieswith the rest of the world through its global investments and energy sources. In the shortterm, it looks as though its economy will continue to grow as a result of the ongoing energy crisis.

But withthe Russia-Ukraine war prompting many countries to re-evaluate their reliance on imported gas, could Qatar's primary source of income fall out of fashion in the coming years?

The World Cup, meanwhile, wasexpected to bring an additional $20 billion (£14.7bn) into the country. Hopes are high that it will help to bolster Qatar's once-flagging tourism industry, while also raising the tiny state's prominence on the world's stage.

But will the nation score its goal of increasing visitor numbers? Time will tell...

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