Qatar’s surprise announcement to exit Opec on January 1 after 57 years, citing the country’s emphasis on expanding its natural gas production is a message that the country remains committed to pursuing an independent path and focusing on a sector where it is already vying for position as the world’s largest producer, rather than remaining in an organization that it sees as irrelevant to its growth plan, Institute of International Finance (IIF) said yesterday.
Qatar has ample physical and financial resources to withstand the blockade tensions; apart from the sovereign wealth fund, the central bank continues to amass foreign reserves, IIF noted in its ‘Qatar Country Report.’ IIF believes that the regional rift has been a blessing in disguise in a way, since it has spurred the government to reaffirm its objectives of diversification and private sector development and to accelerate its reforms. It is gradually moving forward with legislation to permit 100 percent foreign ownership of firms in most sectors and favorable tax treatment in a bid to attract FDI, as well as fostering the growth of SMEs by expanding their access to financing and opportunities for participation in PPPs. It is partnering with prominent universities to expand its human capital and gradually encouraging greater participation of women in higher education and visible positions in leadership. In addition, it is developing plans to ensure that the construction associated with the World Cup pays long-term dividends even after the games are over.
IIF expects Qatar’s growth to pick up from 1.6 percent in 2017 to 2.2 percent in 2018. Construction activity, funded through years of accumulated oil and gas proceeds and overwhelmingly reliant on a migrant workforce, is likely to remain strong and the main driver of non-hydrocarbon growth, with significant work still underway to complete the infrastructure necessary for the 2022 World Cup.
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