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CONTENTS Qatar  Economic AnalysisLegal Information Info-Prod Country Guide

Principal Commercial and Political Characteristics


Qatar, an Arab state on the Persian Gulf, is a monarchy without democratically elected institutions or political parties. It is governed by the ruling Al-Thani family through its head, the Emir. The 1970 Basic Law institutionalizes the customs and mores of the country's conservative Islamic heritage including respect for the sanctity of private property, freedom from arbitrary arrest and imprisonment and the punishment of transgressions against Islamic law. The Emir holds absolute power that has been influenced by consultation with leading citizens, rule by consensus and the right of personal appeal to the Emir. The Emir considers the opinions of leading citizens, whose influence is institutionalized in the Advisory Council, an appointed body that assists the Emir in formulating policy.

The State owns most basic industries and services, but the retail and construction industries are held in private hands. Oil is the principal natural resource, but the country's extensive natural gas resources will play an increasingly important role. The rapid development of the 1970s and 1980s created an economy in which expatriate workers, mostly South Asian and Arab, outnumber Qataris by a ratio of four to one. The government has attempted to reduce this ratio by offering many public-sector jobs only to citizens.

Commercial Outlook

The International Monetary Fund has forecast that oil and gas exports would boost state income to US$ 7 billion a year in the year 2000 from around US$ 3 billion now.

Doha established special relations with Western nations by giving the Pentagon a weapons depot on its soil, and providing France and Britain with lucrative arms deals and business contracts. US and French companies now dominate Qatar's oil and gas sector, which was once the exclusive domain of British Petroleum Co. Plc. and Royal Dutch/Shell Group. Qatar is banking its future prosperity and political profile on North Field; the world's largest single concentration of natural gas at more than 500 trillion cubic feet (14 trillion cubic meters). The development of this field is expected to cost a total of US$ 30 billion.

Moody's Investors Service upgraded its sovereign ceiling for Qatar's long-term foreign currency debt by two notches, based on the country's improved economic and financial prospects that are largely based on the development of its vast North Field gas reserves. Moody's predicted receipts from both Qatar gas and the new Ras Laffan project will reach US$ 1.9 billion by the year 2001 and will provide the cash flow to service the associated large external debts raised by Qatar to finance its share of the projects.

Qatar's 120,000 native population already enjoys one of the world's highest per capita incomes (US$ 15,000), mainly from oil sales, which in 1995 amounted to US$ 2.5 billion.

Political Outlook

In June 1995, Sheikh Hamad bin Khalifa al-Thani, eldest son of Emir Sheikh Khalifa bin Hamad al-Thani, toppled his father in a bloodless palace coup. Qatar's latest Emir has a firm grip on power and is setting out to steer his small energy-rich state into the international limelight. Qatar has three key assets: the world's largest single reservoir of natural gas, the support of the United States and other key Western powers and a motivated team of forward-looking ministers.

Until a truce was reached in October 1996, Sheikh Khalifa had vowed to regain power "at any cost" and was alleged to have supported an unsuccessful coup in early 1996. The former Emir has returned US$ 2 billion of missing state funds claimed by the government in world-wide lawsuits following an out-of-court settlement in 1997. The justice ministry did not say how much was in the disputed accounts, but unofficial estimates claim that the sum controlled by Sheikh Khalifa bin Hamad al-Thani ranged from US$ 3 billion to US$ 7 billion. To better monitor his father's activities and to stifle any intention of taking back the palace, Hamad is likely to offer him a symbolic but powerless political post.

Sheikh Hamad has made moves towards democracy by encouraging public debate, ending press censorship and abolishing the Ministry of Information. He has broken with the Gulf's male-dominated tradition by appointing a woman as under-secretary at the Education and Culture Ministry.

He has also scheduled municipal elections to foster grassroots democracy. It is speculated that he may order voting to fill certain seats on a thirty-five member advisory council and give it more powers to oversee the government.

He has also scheduled municipal elections to foster grassroots democracy. It is speculated that he may order voting to fill certain seats on a thirty-five member advisory council and give it more powers to oversee the government.

In 1996, Sheikh Hamad issued a decree redefining his powers and jurisdiction as executive head of state and restructuring the government by separating royal powers from those of the cabinet. Sheikh Hamad's twenty member cabinet is comprised mostly of young, Western-educated ministers whose average age is thirty-six, in sharp contrast to the patriarchal, conservative traditions in a region where the average age of the rulers of the five other oil monarchies is sixty-nine. Hamad himself is only in his mid-forties.

In foreign relations, Qatar has always conducted an independent policy. As such, they have restored full ties with Gulf War foe Iraq, befriended radical Shi'ite Iran and, until Benjamin Netanyahu came to power in Israel, moved to normalize relations with the Jewish state.

In early December 1996 relations between Qatar and neighboring Bahrain reached an all-time low. On December 2, Bahraini authorities announced that they had uncovered a network of Qatari spies operating in Bahrain. The event unleashed a media war between the two countries, with Bahrain accusing Qatar of carrying out espionage activities in Bahrain for over a decade.

The incident fueled the fire of a wider dispute between the two nations over mutually claimed territory. Both countries claim sovereignty over the Hawar islands, located south of Bahrain and west of Qatar, which are considered to hold large oil reserves and to possess significant tourist potential. In 1990, during a previous GCC summit, the two nations agreed to call on Saudi Arabia to assist in mediating their dispute, and, in the absence of a settlement, to present the matter to the International Court of Justice (ICJ) for arbitration. Saudi Arabia was unable to resolve the disagreement, and Qatar turned to the ICJ. While the dispute still remains unresolved, tensions between the two have subsided. As of February 1997, relations have been somewhat restored thanks to the mediation of other GCC members.


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