I don't think I have a straight answer to why am particularly fascinated by the economic stories from the Middle East, it could be that am impressed with their modern thinking through traditional attires.
I would like to consider this topic as a continuation to my previous blog post "The Dubai Tsunami", just like Dubai has made huge investments that are extremely hard to fathom for a common man. Qatar, its next door emirate neighbor has followed suit. Having closely watched their neighbor, they have cautiously invested several billions of dollars to transform their capital city (Doha) into a free market economy. Qatar with a population of 1.5 million has its share of the ultramodern skyline and man-made Islands. Since no one was was prone from the real-estate bust, so were the Qataris. The slump in the real estate market quickly hit their home town, leaving them dry with semi-vacant glass towers and their own artificial island.
A déjävu, should we say? No, the difference between both these neighboring Emirates is enormous. Qatar may be going through some tough economic times due to the real estate bust but unlike Dubai they have good natural resources backing them up. Unfortunately, Dubai did not have enough oil reserves and Sheikh Mohammed Bin Rashid's vision was to transform Dubai into the next financial hub like Hongkong. Qatar on the other hand has abudant levels of Natural gas, granted that this resource is not as promising as 'black gold' but the Qataris have invested their focus and vision in transforming this abundant resource into a money machine.
If done right, this natural gas can be converted into liquid oil products like jet fuel. These converted oil products can fetch as much as $90 a barrel which would form a hedge against low gas-prices. They are in the process of completing two of their 14 plants that would convert abundant levels of natural gas into liquid oil.
Giant oil companies like Shell, ExxonMobil, Total and a few others have already spent more than $100 billion on these energy projects in Qatar. Since they retain majority stake in these projects, the hope is to profit from an ever growing oil and gas exports. IMF projects the demand on oil exports to reach $67 billion by year's end, Qatar's GDP growth this year is estimated at 18.5%. As much as this number sounds significantly promising, we need to keep in mind that this is a developing country and such growth patterns are only possible at that level.
Human capital - Here is another differentiator between the neighbors. Qatar's Sheikh bin Khalifa setup a foundation to churn out financiers, engineers and biotech specialists. This has persuaded schools to estblish campuses out there. Cornell operates a medical school and Texas A&M produces petroleum engineers.
I guess, these innovative ways of building a strong economic foundation that benefits generations to come is probably why am fascinated by such stories from the Middle East. We often tend to judge nations based on their culture but there is more to it than that. Whether it is Dubai or Qatar, it is great to see players from all across the planet contributing to a Global economy and growth.
I would like to consider this topic as a continuation to my previous blog post "The Dubai Tsunami", just like Dubai has made huge investments that are extremely hard to fathom for a common man. Qatar, its next door emirate neighbor has followed suit. Having closely watched their neighbor, they have cautiously invested several billions of dollars to transform their capital city (Doha) into a free market economy. Qatar with a population of 1.5 million has its share of the ultramodern skyline and man-made Islands. Since no one was was prone from the real-estate bust, so were the Qataris. The slump in the real estate market quickly hit their home town, leaving them dry with semi-vacant glass towers and their own artificial island.
A déjävu, should we say? No, the difference between both these neighboring Emirates is enormous. Qatar may be going through some tough economic times due to the real estate bust but unlike Dubai they have good natural resources backing them up. Unfortunately, Dubai did not have enough oil reserves and Sheikh Mohammed Bin Rashid's vision was to transform Dubai into the next financial hub like Hongkong. Qatar on the other hand has abudant levels of Natural gas, granted that this resource is not as promising as 'black gold' but the Qataris have invested their focus and vision in transforming this abundant resource into a money machine.
If done right, this natural gas can be converted into liquid oil products like jet fuel. These converted oil products can fetch as much as $90 a barrel which would form a hedge against low gas-prices. They are in the process of completing two of their 14 plants that would convert abundant levels of natural gas into liquid oil.
Giant oil companies like Shell, ExxonMobil, Total and a few others have already spent more than $100 billion on these energy projects in Qatar. Since they retain majority stake in these projects, the hope is to profit from an ever growing oil and gas exports. IMF projects the demand on oil exports to reach $67 billion by year's end, Qatar's GDP growth this year is estimated at 18.5%. As much as this number sounds significantly promising, we need to keep in mind that this is a developing country and such growth patterns are only possible at that level.
Human capital - Here is another differentiator between the neighbors. Qatar's Sheikh bin Khalifa setup a foundation to churn out financiers, engineers and biotech specialists. This has persuaded schools to estblish campuses out there. Cornell operates a medical school and Texas A&M produces petroleum engineers.
I guess, these innovative ways of building a strong economic foundation that benefits generations to come is probably why am fascinated by such stories from the Middle East. We often tend to judge nations based on their culture but there is more to it than that. Whether it is Dubai or Qatar, it is great to see players from all across the planet contributing to a Global economy and growth.
Comments