Qatar WT/TPR/S/144 
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I. ECONOMIC ENVIRONMENT 
(1) MAJOR FEATURES OF THE ECONOMY  
1. The State of Qatar comprises a peninsula located in the Arabian Gulf and some small islands.  
It shares a land border with Saudi Arabia in the south, and its maritime boundaries are with Bahrain, 
Iran, Saudi Arabia, and the United Arab Emirates (UAE). Qatar has a land mass of 11,521 square 
kilometres, with some 560 kilometres of coastline.1  The population is estimated at 743,0002, of which 
the majority are foreigners.  Doha, the capital, a nd its main suburb, Al-Rayyan, account for 83% of 
inhabitants and 60% of the territory. Qatar has a relatively young population structure: almost one 
quarter are in the 0-14 age group, and only 3% are 65 years and over.  In 2002, Qatar ranked 47th out 
of 177 countries in terms of the UNDP Human Development Indicators.3 
2. Qatar is a high-income country, with a GDP pe r capita estimated at US$27,491 for 2003;  this 
is amongst the highest in the world (Table I.1).  Qatar's economy depends  heavily on its abundant 
petroleum and gas wealth, which accounted for 56.1%  of the country's GDP in 2003, around 70% of 
Government revenues, and almost 90% of total merchandise export earnings. The services sector, led 
by public administration services, contributes about 30% to Qatar's GDP, and employs 65% of the 
total labour force.4  The manufacturing sector, developed on the basis of Qatar's comparative 
advantage in energy-intensive industries, is responsible for 6.7% of the country's GDP, while agriculture contributes 0.3% to the GDP. 
Table I.1  
Qatar at a glance 
 2003a 
Area (km2) 11,521 
Population ('000) 743.0 
GDP total (US$ million) 20,426.1 
GDP per capita (US$) 27,491.4 
Share of GDP at current prices (per cent)  
   Agriculture  0.3 
   Oil and gas 56.1 
   Manufacturing 6.7 
   Electricity and water 1.3 
   Building and construction 4.7 
   Trade, restaurants, hotels 5.3 
   Transport and communications 3.3 
   Finance, insurance, real es tate and business services  7.5 
   Government services 12.6 
   Other services 2.2 
a Preliminary estimates. 
Source:  Qatar Central Bank (2004), Quarterly Statistical Bulletin , Vol. 23, No. 1, March. 
3. The national currency is the Qatar riyal (QR).  It was de facto  pegged to the U.S. dollar at 
QR 3.64 per U.S. dollar in June 1980; this was form alized in July 2001, substituting the earlier formal 
                                                      
1 Qatar is roughly 160 kilometres long, and about 80 kilometres at its widest point (Qatar Chamber of 
Commerce and Industry, 2004). 
2 According to the initial results of the 2004 population census, up from 522,000 inhabitants reported in 
the previous census of 1997 (Ministry of Foreign A ffairs, undated, "Nations and Citizens:  General 
Information") .  
3 UNDP (2004). 
4 Qatar Chamber of Commer ce and Industry (2004). WT/TPR/S/144 Trade Policy Review 
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peg to the IMF's Special Drawing Rights (SDR).5  The fixing of the QR to the U.S. dollar was made 
as a first step to comply with the decision by  the Gulf Cooperation Council (GCC) to launch a 
monetary union by 2007.6  In addition, Qatar has been applying the GCC common external tariff as 
from 1 January 2003 (Chapter III(2)(iv)).  Qatar accepted the obligations of Article VIII of the 
Agreement of the International Monetary Fund on 6 April 1973. 
4. Since the mid-1990s, Qatar has been implem enting a development strategy aimed at, inter 
alia, reducing its high dependence on cr ude oil, particularly by:  ra ising production and exports of 
liquefied natural gas (LNG), as well as promoting gas- intensive industries, such as petrochemicals and 
fertilizers, and, more recently, tourism; creati ng more job opportunities for all Qatari nationals; 
improving education, health services, and modernizin g the infrastructure; and addressing some of the 
deep-rooted structural problems built over the previ ous decades, including that key industries, such as 
transport, energy, and telecommunications, remain do minated by a public company. In this regard, the 
development strategy has been accompanied by grad ual structural reforms to create a more business-
friendly environment, and increase the role of the private sector in the economy (Chapters II(5) and 
III(4)(iii)).7 
(2) RECENT ECONOMIC DEVELOPMENTS  
5. The development strategy followed by Qatar has resulted in its impressive economic 
performance in the past few years, spurred by ra pidly rising crude petroleum and natural gas output 
and prices, and the boost in non-hydrocarbon production as a result of the increase in LNG and energy-intensive industrial and government investme nts. Qatar's real GDP growth rate jumped from 
an annual average of 1.3% during 1986-95 to ar ound 9% over 1996-03. A real GDP growth rate of 
9.3% is expected for 2004, largely led by a further surge in crude oil production and prices.
8  
6. The annual average inflation rate in Qatar, as measured by the consumer price index (CPI)9, 
decreased to 0.2%  in 2002 from a peak of 8.8% in 1996, before rising to 2.5% in 2003  and to an 
estimated rate of 3.5%  in 200410, due mainly to an increase in private consumption.  The main goal of 
monetary policy is price stability. The Qatar Centra l Bank (QCB) has taken gradual steps to reform its 
monetary policy; it has reduced the level of re quired reserves and liberalized interest rates.11  T h e  
fixed exchange rate policy followed by Qatar has also provided a credible nominal anchor for price 
stability. 
                                                      
5 The QR was pegged at QR 4.7619 per SDR (a basket of key international currencies), with margins of 
+/- 7.25% until July 2001 (IMF, 2002b). 
6  The GCC countries are: Bahrain,  Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates. 
All GCC countries have pegged their currencies to the U. S. dollar. On top of that, the GCC agreed to adopt 
economic performance criteria, by no later than 2005, for the policy convergence needed to support the 
monetary union (IMF, 2002a). 
7 It is estimated that the public sector (government and public enterprises) accounted for about 70% of 
Qatar's nominal GDP in 1999 (IMF, 2002b). 
8 IMF (2004). 
9 The base year of the CPI is 2001; the previous base year was 1998.  
10 IMF (2004). 
11 Interest rates are market determined. The liberalization of interest rates in Qatar was completed in 
February 2000, with the removal of the ceiling rate on deposits of 12 months or less. Qatar WT/TPR/S/144 
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Table I.2 
Main economic indicators, 1998-03 
 1998 1999 2000 2001 2002 2003a 
National accounts (annual % changes)       
Real GDP 12.0 4.8 7.3 6.3 ..  .. 
   Agriculture and fishing -14.0 16.2 -9.0 0.0 ..  .. 
   Mining and quarrying 20.2 7.8 13.1 0.8 ..  .. 
   Manufacturing 8.0 1.6 -7.5 13.6 ..  .. 
   Electricity, gas and water 7.5 25.7 9.5 18.5 ..  .. 
   Construction 13.6 13.7 3.9 23.8 ..  .. 
   Services 6.7 1.2 6.0 7.7 ..  .. 
      Trade, restaurants, and hotels 11.6 3.4 10.5 3.0 ..  .. 
      Transport and communications 14.7 6.0 10.2 21.6 ..  .. 
      Finance, insurance, real estate , and business services 16.2 -0.6 4.1 6.6 ..  .. 
      Social services 3.9 -8.0 -10.1 -2.9 ..  .. 
      Government services 1.7 0.9 5.1 7.7 ..  .. 
      Household services 4.2 3.8 4.2 4.0 ..  .. 
      Imputed bank service charges 14.7 -1.7 -0.1 10.9 ..  .. 
       
Final consumption -1.5 -1.6 7.4 2.6 ..  .. 
   Private consumption -1.3 -1.4 1.7 0.4 ..  .. 
   Government consumption -1.6 -1.7 11.0 3.8 ..  .. 
Gross fixed capital formation -11.5 -25.4 54.5 19.8 ..  .. 
Changes in stocks 11.7 -39.3 77.7 11.3 ..  .. 
Exports of goods and non-factor services 39.1 12.1 6.0 -5.5 ..  .. 
Imports of goods and non-factor services -2.6 -24.2 51.2 -8.1 ..  .. 
       
Consumer prices (average) 2.9 2.2 1.7 1.4 0.2 2.5 
       
External sector (US$ million - current prices)       
Trade balance 1,960 4,962 6,373 7,485 6,707 7,267 
   Exports (f.o.b.) 5,030 7,214 11,594 10,871 10,978 13,382 
   Imports (f.o.b.) -3,071 -2,252 -2,930 -3,386 -3,650 -4,412 
Current account balance -455 2,171 4,576 4,152 3,824 5,700 
Current account balance (% GDP) -4.4 17.5 25.8 23.4 21.7 20.0 
Capital and financial account 407 1,627 -19 -1,055 -1,712 -757 
Overall balance -48 2,458 2,691 2,625 1,789 4,367 
Central Bank reserves (net - US$ bn) 599 735 1191 1296 1408 ..  
   In months of imports of goods and non-factor services 1.6 1.8 2.7 2.7 2.8 ..  
Nominal effective exchange rate (1995 = 100)b 116.6 116.2 122.6 128.8 126.6 115.2 
Real effective exchange rate (% change)b -3.0 5.4 2.8 3.0 ..  .. 
       
Government finance (US$ million - current prices, end of 
period)       
Receipts 4,181 4,323 6,855 6,251 7,834 8,010 
Expenditure 4,642 4,822 5,575 5,633 6,264 6,927 
Balancec -461 -499 1,280 618 1,570 1,085 
Balance (as % of GDP)c -4.5 -4.0 7.2 3.5 8.0 5.3 
       
Financial indicators (end of period - % change)       
Money supply (M1) .. -0.9 6.5 17.3 20.5 79.3 
Money supply and quasi-money (M 2) .. 11.4 10.7 0.0 11.8 15.8 
.. Not available. 
a Preliminary estimates. 
b Negative sign indicates depreciation. 
c Negative sign indicates deficit.  
Source:  State of Qatar (2003), Planning Council, Annual Statistical Abstract , 22nd issue, January;  Qatar Central Bank 
 (2004), Quarterly Statistical Bulletin , Vol. 23, No. 1 March;  IMF, International Financial Statistics , CD-Rom;  
 and information provided by  the Qatari authorities. 
7. In line with the significant increase in oil and gas earnings, Qatar has achieved an important 
turnaround in its fiscal position since 2000, a main source of macroeconomic imbalances in the past. 
The overall public sector balance improved from a defi cit of 4% of GDP in 1999/00 to surpluses WT/TPR/S/144 Trade Policy Review 
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thereafter, reaching 8% of GDP in 2002/03, and an estimated 5.3% in 2003/04.12 The fiscal 
improvement has also been the result of, inter alia , the downsizing of government employment 
through the streamlining of ministries, and th e recent adoption of a national pension fund,  with 
reduced contribution from the budget.13  Nevertheless, with oil-relate d revenues accounting for more 
than two thirds of total public sector income, Qa tar needs to diversify its  non-oil public revenue 
sources (in fiscal year 2001/02, taxes, including import tariffs, accounted for about 20% of non-oil revenue, excluding investment income) and its non-o il public revenue base (only foreign companies 
and the state-owned Qatar Petroleum are subject to  the legislation on income tax), and reduce the 
extent of exemptions.  In additio n, public expenditure could be further reduced by changing the 
longstanding policy of subsidizing utility and water charges.
14 
8. Qatar experienced external current account deficits, equivalent to 4.4%  of GDP in 1998.  
However, following the increase in world oil prices in  1999 (Chapter IV(3)(ii)), the deficits have been 
transformed into surpluses, peaking at 25.8% of GDP in 2000 and reaching 20% of GDP in 2003.  
This impressive turnaround in Qatar's external cu rrent account has been led by a surge in petroleum 
and gas exports, which jumped from US$2,979 m illion in 1997 to US$11, 374 million in 2003. 
9. Despite the significant rise in oil and gas exports , Qatar's total external debt also moved up 
from US$9,323 million (equivalent to 82.5% of GDP) in 1997, to US$15,035  million (75% of GDP) 
in 2003, because of the need to finance government  spending on health, educa tion, and infrastructure 
projects.  This is a reversal of the situation Qatar faced in 1998, when the Government curbed 
spending in the aftermath of the oil price crash, leading to the postponement of many development 
projects.  Nevertheless, at about 25.3% of total expor ts in 2003, Qatar's debt service seems 
manageable. 
(3) TRADE PERFORMANCE AND INVESTMENT  
(i) Trade in goods and services 
10. Over the years, Qatar has traditionally recorded  a surplus in its merchandise trade balance;  
the magnitude of this surplus is driven predominantl y by developments in the hydrocarbons industry.  
In 2003, the merchandise trade surplus amounted to US$8,970 million (up from US$62 million in 
1997), due primarily to the significant increase in o il and gas export earnings that resulted in total 
merchandise exports of US$13,382 million. 
11. During 1997-03, the ratio of Qatar's merchandi se trade (exports and imports) to GDP rose 
from 76.5% to 87.1%.   In 2003, Qatar ranked 46th among world merchandise exporters (considering 
the countries of the European Communities together and excluding intra-EC trade)15, and 64th among 
importers.  For trade in services, the country ranked 68th as an exporter and 57th as an importer. 
                                                      
12 Fiscal year in Qatar begins in April. 
13 The national pension scheme covers Qataris employed in both the government and non-government 
sectors. Employers contribute 10% and employees 5%;  retirement age was set at 60 years for men and 55 for women, after a 20-year contribution, with full pension. Employees are entitled to retire, at a pension discount, 
after 15 years of contribution (IMF, 2002b). 
14 Qatari households are exempt from electricity and water charges, while businesses and expatriates 
pay such charges, although at a highly subsidized rate. The authorities estimated that electricity and water 
consumption could be reduced by more than 30% if th eir prices were increased to ensure cost recovery 
(IMF, 2002b). 
15 WTO (2004a). Qatar WT/TPR/S/144 
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12. The export base of Qatar was heavily concen trated in crude petroleum until 2002, when 
exports of LNG became the country's most impor tant foreign exchange source (Chart I.1, and 
Tables AI.1 and AI.2).  The share of LNG exports in total merchandise exports rose from 12.2% in 1998 to 43.7% in 2002, while the share of crude petroleum declined from 61.2% to 35.9%.  The 
contribution of manufacturing exports (led by chem icals and iron and steel products) also decreased 
from 13.6% in 1998 to 10.5% in 2002, while exports of agricultu ral products represented only 0.1% 
of the total throughout the period. 
13. Qatar's exports rely, to a large extent, on the ma rkets of East Asia and the Middle East, which 
together accounted for 82.3% of total exports in 2002, up from 68.6% in 1998 (Chart I.2, and 
Tables AI.3 and AI.4).  Japan has typically been Qatar's major export market (29.5% in 2002, down 
from 40.9% in 1998), followed by the Republic of Korea, Singapore, and Thailand.  In the Middle 
East, the UAE is the main destination for Qatar's exports (4.6% in 2002, up from 3.1% in 1998), while 
in Africa, Egypt is Qatar's key market (3.3% in 2002 up from 0.2% in 1998).  In 2002, the United States and the EC (15) accounted for 3.5% and 2.3%, respectively, of Qatar's exports. 
14. Qatar's imports have fluctuated in line w ith the country's economic performance. Total 
merchandise imports went from US$2,498.9 million in 1999 (when Qatar registered a reduction in its 
GDP growth rate), to a peak of US$4,412 million in 2003 due to the GDP growth boom.  Manufactured goods represented 83.5% of total me rchandise imports in 2002 (down from 85.6% in 
1998), whereas the share of agricultural imports in creased from 10.9% in 19 98 to 12.7% in 2002. 
About half of Qatar's total me rchandise imports comprised machin ery and transport equipment;  
chemicals and iron and steel products also represent a sizeable share (Table AI.5). 
15. East Asia and the Middle East supplied 40.9% of  Qatar's total merchandi se imports in 2002 
(up from 39% in 1998). However, considering indivi dual countries, the United States is the leading 
source of Qatar's merchandise imports, supplying 13% of the total in 2002 (down from 14% in 1998). 
Japan is the next largest source, although its shar e decreased from 12.8% in 1998 to 10.5% in 2002. 
Some European countries increased th eir participation during the period, particularly Italy, from 6% 
to 9% (Table AI.6). 
16. Balance-of-payments data indicate that Qatar is a net importer of services, with a deficit 
averaging US$1,194.2 million per year during 1999- 03 (Table I.5).  Total exports of services 
increased from US$238 million in 1999 to US$1,138 million in 2003;  travel services rose from US$122 million (51.3% of total services exports) to US$369 million (32.4% of total services receipts) 
during the period.  Total imports of services increased from US$1,613 million in 1999 to 
US$2,341 million in 2003 with travel and trans portation services accounting for 39% of the total in 
2003, up from 33.8% in 1999. 
 WT/TPR/S/144 Trade Policy Review 
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0%10%20%30%40%50%60%70%80%90%100%
1998 1999 2000 2001 2002
0%10%20%30%40%50%60%70%80%90%100%
1998 1999 2000 2001 2002Chart I.1
Structure of merchandise ex ports and imports, 1998-02
(a) Exports
(b) Imports
Source: WTO Secretariat calculations, based on UNSD, Comtrade database.Transport equipment ChemicalsElectrical machines Iron and steelFood Other semi-manufactures Textiles and clothing
Non-electrical machinery Mining OtherChemicals Crude petroleum
Clothing Other fuelsIron and steel Natural gas, liquified (LNG) Other
 Qatar WT/TPR/S/144 
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0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%19981999200020012002Chart I.2
Direction of merchandise trade, 1998-02
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%19981999200020012002(a) Exports
(b) Imports
Source: WTO Secretariat calculations, based on UNSD, Comtrade database.United Sates
Saudi ArabiaUnited Arab Emirates ItalyKorea, Rep. of
Japan GermanyUnited KingdomChinaOther EU
Other Asia
OtherUnited Sates
SingaporeKorea, Rep. of EuropeEgypt
Thailand Saudi ArabiaUnited Arab EmiratesJapan
Other
 WT/TPR/S/144 Trade Policy Review 
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Table I.3 
Balance of payments, 1999-03 
(US$ million) 
 1999 2000 2001 2002 2003 
Current account 2,171 4,576 4,152 3,824 5,700 
   Goods 4,962 8,664 7,485 7,328 8,970 
      Exports (f.o.b.) 7,214 11,594 10,871 10,978 13,382 
         Crude petroleum 4,014 6,588 5,610 5,629 6,717 
         Natural gas liquid 2,198 3,863 4,099 3,504 4,657 
         Other 849 974 996 1,638 1,819 
         Re-export 152 170 166 207 190 
      Imports (f.o.b.) -2,252 -2,930 -3,386 -3,650 -4,412 
      
   Services -1,374 -1,276 -1,028 -1,090 -1,203 
      Credit 238 363 685 707 1,138 
         Travel 122 128 272 285 369 
         Transportation 83 206 373 310 628 
         Other 33 30 40 112 141 
      Debit -1,613 -1,640 -1,714 -1,796 -2,341 
         Travel -320 -307 -366 -423 -471 
         Transportation -225 -293 -338 -365 -441 
         Other -1,068 -1,040 -1,010 -1,009 -1,429 
      
   Income -119 -1,399 -704 -952 -416 
      Credit 117 214 888 709 1,354 
      Debit -236 -1,613 -1,591 -1,607 -1,770 
      
   Transfer (net) -1,298 -1,413 -1,601 -1,517 -1,650 
      Workers' remittances -1,259 -1,355 -1,507 -1,483 -1,594 
      Other  -38 -58 -95 -34 -56 
      
Capital and financial account  1,627 -19 -1,055 -1,712 -757 
   Capital account 0 0 0 -373 -319 
      
   Financial account 1,627 -19 -1,055 -1,340 -438 
      
Net errors and omissions -1,341 -1,865 -472 -323 -577 
      
Overall balance 2,458 2,691 -2,625 1,789 4,367 
Change in reserves (increase -) -2,458 -2,691 -2,625 -1,789 -4,367 
      
Indicators (% of GDP)      
   Trade balance 40.7 48.8 42.2 37.2 43.9 
   Current account balance 17.5 25.8 23.4 21.7 20.0 
   Overall balance 19.8 15.2 14.8 9.1 21.4 
Source:  Qatar Central Bank (2004), Quarterly Statistical Bulletin , Vol. 23, No. 1, March. 
(ii) Foreign direct investment 
17. Qatar's annual inflows of foreign direct investme nt (FDI) have been relatively erratic over the 
last few years, moving from US$113 million in 1999 to a peak of US$631 million in 2002, and then 
decreasing to about US$400 million in 2003. Howeve r, as percentage of GDP, the stock of FDI has 
been increasing rapidly, reaching 15.9% in 2003, up  from 10.8% in 2000 (Table I.4).  According to 
UNCTAD's Inward FDI Performance Index16, during the period 2001-03, Qatar ranked 67th out of 
140 countries;  its previous rank was 81st (2000-02), and its best ever ranking was 41st (1996-98). 
                                                      
16 UNCTAD's Inward FDI Performance Index measures  the extent to which host countries receive 
inward FDI, and ranks countries by the amount of FDI they receive rela tive to their econo mic size. It is 
calculated as the ratio of a country's share in global FDI inflows to its share in global GDP. Qatar WT/TPR/S/144 
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Table I.4 
Foreign direct investment, 1998-03 
(US$ million) 
 1998 1999 2000 2001 2002 2003 
FDI inflowsa 347 113 252 296 631 400 
FDI inward stock 1555 1668 1920 2216 2847 3247 
FDI inward stock (% of GDP) 15.2 13.5 10.8 12.5 14.4 15.9 
       
FDI outflowsa 20 30 41 112 61 71 
FDI outward stock 110 140 181 293 353 424 
FDI inward stock (% of GDP) 1.1 1.1 1.0 1.7 1.8 2.1 
a Estimates. 
Source:  UNCTAD (2004), World Investment Report ;  and WTO Secretariat estimates. 
18. Qatar has shown one of the biggest improve ments in UNCTAD's Inward FDI Potential 
Index17, ranking 8th during 2000-02 (20th over 1996-98). Nevertheless, Qatar's vast potential for 
attracting foreign investors and fostering domes tic investment remains somewhat untapped. 
According to UNCTAD, Qatar's recent FDI perform ance is below potential and the country should 
address the shortcomings that prevent its structural FDI potential from being realized.  In general, FDI 
in Qatar has been inhibited by the slow progr ess of its privatization programme, institutional 
constraints, small market size, the unavailability of  skilled labour, and the high cost of labour;  in 
addition, foreign companies remain excluded from i nvesting in certain key activities, such as banking, 
insurance, and commercial representation (Chapters II(5) and III(4)(iii)).   
19. The authorities have recently been implementi ng measures to improve the investment climate 
in the country.  In particular, new laws (Invest ment Law No. 13 of 2000, and Commercial Companies 
Law No. 5 of 2002) have been enacted to pave the wa y for a surge in foreign in vestment inflows.  The 
2000 Investment Law has further improved the incentives schemes available to investors.  In addition, 
a one-stop window for investment procedures has b een established to increa se transparency, reduce 
red tape, and ease the approval process for land and industrial licences (Chapter II(5)).   
20. According to the authorities, foreign invest ors have committed to invest US$32 billion in 
various projects in Qatar over the next five years18, including the expansion of Rasgas and Qatargas 
(Chapter IV(3)(iii)). 
(4) OUTLOOK  
21. Qatar's economic outlook de pends, to a great extent, on the evolution of the world oil and gas  
markets, given its high dependency on these products.19  In this regard, Qatar's economic policy aims 
to continue reducing its vulnerability to oil fluctu ations (world prices and OPEC's output quotas), and 
accelerate non-oil growth to generate more empl oyment opportunities. The achievement of these 
objectives calls for sustained structural reforms, such as lifting impediments to FDI, and expanding 
private investment opportunities in key sectors. The long-term strategy also aims to ensure inter-
generational economic equity in the exploitation of  non-renewable natural wealth, by saving part of 
                                                      
17 UNCTAD's Inward FDI Potential Index measures the extent to which host countries receive inward 
FDI, and ranks countries by the amount of FDI they receive relative to their potential. It is calculated on the basis of structural variable s, such as country risk, and trade-related measures. 
18 Economist Intelligence Unit (2004). 
19 In 2003, 44% of the operating revenues of the state-owned Qatar Petroleum (QP) were derived from 
the production and export of crude oil, 19% from liquefied natural gas (LNG) projects, 12% from the sale of 
refined petroleum products, 10% each from the sale of natural gas liquids and fertilizers, and 5% from 
petrochemicals.  QP expects oil-related activities to con tinue to account for the larges t share of its revenues for 
the next 8-12 years.  WT/TPR/S/144 Trade Policy Review 
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the recent windfall oil gains into several  funds (e.g. the Oil Stabilization Fund20, Qatar Foundation 
Fund21, and Housing Fund22) to finance development projects. 
22. Further integration within the GCC area23, including the planned monetary union by 2007, is 
expected to further improve Qatar's macroecono mic performance.  The GCC countries will need to 
take important steps towards a full monetary union,  such as achieving convergence criteria (e.g. price 
stability, sustainable fiscal position, and low interest rates); creating common institutions, notably the 
GCC central bank; and implementing regulatory a nd legislative reforms. The GCC customs union, 
together with an effective monetary union, is lik ely to enhance growth prospects for Qatar and the 
other countries in the region through, inter alia , a more efficient allocation of resources; an increase in 
intra-GCC trade; strong boosts to FDI resulting from increased business opportunities; and higher 
productivity as a result of increased  competition among member states. 
23. Demographic factors, such as the structur e of the Qatari population, and trends in 
international migration will also play a role.  The fact that foreign workers account for over 70% of 
Qatar's labour force makes the country relatively vul nerable to changes in international flows of 
expatriates.24 Although there are currently no unemployment pressures in Qatar25, its relatively young 
population will require the economy to generate in creasing employment opportunities.  Awareness of 
this situation has led to the implementation of a programme, called Quality Qatarization, aimed at 
raising the share of "competent" Qatari nationals to  50% of the total labour force in the energy and 
industry sectors by the end of 2005 (Chapter IV(4)(ii)).26 
 
                                                      
20 The objective of the Oil Stabilization Fund, created in 2000, is to insulate medium-term development 
expenditures from volatile oil revenue. The Supreme Council for Economic Affairs and Investment determines 
the fund's investment strategy (IMF, 2002b). 
21 The objective of the Qatar Foundation Fund is to finance higher education in the country through the 
opening of new universities and colleges associated with  internationally recognized institutions. The Supreme 
Council for Economic Affairs and Investment determin es the allocation of the fu nd's resources (IMF, 2002b). 
22 The Housing Fund, created in the 1980s, finances the residency of Qatari nationals through long-
term loans free of charge. Qatar National Bank (QNB) ad ministers this fund on behalf of the Ministry of 
Finance (IMF, 2002b). 
23 In 2001, the GCC area had a combined GDP of a bout US$335 billion; an average weighted nominal 
per capita income of US$12,708; as well as 45% and 17%, respectively, of the world's oil and natural gas 
reserves (IMF, 2002a). 
24 It is estimated that there are around half a mil lion workers from OECD countries in the GCC area 
(Middle East Economic Digest, 2004).  
25 Unemployment among Qatari nationals was less than 2% of the total labour force in 1997, a 
situation, which according to the auth orities, remains unchanged. Some 3,0 00 Qatari nationals graduate every 
year from high schools (IMF, 2002b). 
26 The current rate of Qatari employment ranges between 7% and 25% of the total labour force, 
depending on the industry (Qatar Ch amber of Commerce and Industry, 2004).