Doha! How the war in Ukraine makes QATAR even Richer?
At the point when he was youthful, the ongoing emir of Doha Qatar, vitamin canister Hamad longed for turning into an expert tennis player, so his folks had Boris becker the world tennis star, give illustrations to their child years after the fact.
He purchased the french soccer group PSG and afterward purchased Neymar and Messi for a huge number of dollars with such erraticism.
One tends to have two ideas about Doha Qatar, that it is rich because of oil and that its political leaders are dedicated only to spending petrodollars on luxuries.
However, while these two ideas are true to some extent, the story is a bit different, so the questions are: how did Doha Qatar go from poverty to wealth in such a short time?
How does the war in Ukraine make Qatar even richer, and what do the sheiks plan to spend the money from the 2022 world cup on Qatar is it like Dubai, but politically more unstable?
It is a small country located in the Persian Gulf. It neighbors Saudi Arabia, Bahrain, Iran, and the united Arab emirates, where Dubai is located. It was a British protectorate until it became independent in 1971. In 1972. Sheikh khalifa al-Thani seized power in a coup and ruled until 1995 when his son took power from him. While he was on vacation in Switzerland and since 2013 his son vitamin bin Hamad has been the emir of Doha Qatar.
But despite having experienced so many coups, Doha Qatar has managed to create a stable business and regulatory environment. It has also achieved one of the highest GDP per capita in the world. However, a few decades ago, Doha Qatar was very poor at the beginning of the 20th century. Doha Qatar’s main source of income was pearls and fishing.
The country was characterized by poverty, malnutrition, and diseases of all kinds. Let’s think that life in this kind of desert climate was never going to be easy, but money could make it more comfortable when oil was discovered in 1939 things improved a bit, but that discovery was not what made Doha Qatar rich. Oil revenues did build the first school, the first hospital, the first power plant, and the first desalination plant. All this took place in the 1950s, but what would change the course of Qatar was not oil, but rather natural gas in 1971, the largest natural gas field.
The world was discovered off the coast of Qatar. The area is known as the north field, but the fact of having such reserves wasn’t yet reflected in economic growth.
These were difficult times in that region of the world first because of the war between Iraq and Iran and then because of the gulf war. These conflicts discouraged investment to exploit the field by companies such as British Petroleum, but in 1991 the conflict ended, and in 1992 Exxon Mobil.
The u.s oil company signed an agreement with Qatar to exploit the north field. It was in 1996 a year after khalifa al-Thani took power after the coup against his father that Qatar, together with the u.s multinational accelerated the development of this field, production was progressively increased and Qatar began exporting liquefied natural gas for the first time and, as can be seen in this graph, the income per person also began to grow at a good rate from 1996 to reach levels of 150 000 in the 2010s, so it was natural gas that made Qatar so rich.
In fact, in 2022, Qatar became the world’s leading exporter of liquefied natural gas ahead of the united states and Australia, it should be noted that liquefied natural gas is different from natural gas. To be cost-effective to transport. Natural gas must be liquefied by freezing it at 160 degrees below zero and thus occupies 600 times less volume than natural gas in its gaseous form.
Liquefaction was the technology that was little used in the 1990s, but Qatar bet heavily on its development and its gamble paid off because the country has the most sophisticated, liquefied natural gas infrastructure in the world.
It also has the third largest natural gas reserves in the world. Behind only Russia and Iran, if we compare the size of territory and population of these three countries, we realize that Doha Qatar has a lot of wealth in its territory for such a small country with such a small population, the main difference between Qatar and other gas powers, such as Russia is that the Arab country transports liquid gas in LNG tankers, while Russia exports most of it through pipelines to Europe.
Therefore, European countries were always a more difficult market for Qatar, because Russian gas was much cheaper while Qatar’s main customers are the UK, India, Japan, and other southeast Asian countries, however, Russia’s invasion of Ukraine changed the picture, and this conflict will make Qatar an even richer country as a consequence of the war in Ukraine.
Europe has a very clear idea: stop buying gas and oil from Russia in the short and medium term. Several European Union officials have been traveling to Qatar, trying to negotiate agreements for Doha Qatar to start replacing Russian energy imports, and the need for Europe has become greater. Since Russia cut off gas supplies to Poland and Bulgaria, these tensions have become the best opportunity for Doha Qatar.
That is why they initiated a 30 billion dollar project to increase their liquefied natural gas exports by 60 percent by 2027., so with oil prices rising and natural gas prices in Europe near all-time highs. Doha Qatar is one of the big winners of Russia’s invasion of Ukraine.
Doha Qatar’s energy exports will exceed those of the previous 7 years in 2022, so this seems to be the year in Qatar, because, apart from having the opportunity to replace Russian natural gas at the end of 2022, it will be the center of attention, thanks to the world cup, to be held on its territory.
From this event, it also expects a 20 billion dollar economic boost. And finally, the other question is what will Qatar’s sheiks do with the money from the world cup and the windfall profits in the natural gas industry? To the surprise of many, the majority of those profits will not go to the sheik’s luxuries, but will likely go to their sovereign wealth fund.
The Doha Qatar investment authority is an investment fund set up by the country in 2005, with the objectives of managing oil and gas revenues and diversifying its economy by investing in different sectors.
The fund controls no less than 450 billion dollars to get an idea of what that amount of money means the value of all the goods and services produced in a whole year by a country like Argentina is 560 billion dollars.
The fund owns directly or through subsidiaries shares in world-class companies such as Barclays bank, Volkswagen credit, Suisse, and the Paris Saint-Germain soccer club, among many others in London alone. It is said that he owns more than two million square meters of properties he has a stake in the company that owns the empire.
State building in new york bought the Asia square one tower in Singapore and owns several luxury hotels. He also owns the al Jazeera news channel. In short, he has properties all over the world from which we can conclude. Firstly, the Doha Qatari economy has a very good outlook, and, secondly, that it became rich thanks to the oil and liquefied natural gas industry. But, above all, he invested in his surpluses and did not squander them like many other countries when they had times of boom that inevitably fell into the curse of natural resources.