The economy of Qatar

The economy of Qatar

The economy of Qatar as one of the richest worldwide based on GDP per capita with the World Bank and IMF ranking it as the fifth and the seventh on the world, according to 2015 and 2016 data. Qatar’s economy has its cornerstones being Petroleum and natural gas, which accounts for over 70% of all the government revenue as well as over 60% of gross domestic products. Further it amounts to approximately 85% of the export earnings. For instance, Qatar has other world’s third-largest natural gas reserves that is proves and it is the second-largest exporter of natural gas. The Qatari government is getting concerned that most of the country’s national income is majorly relies on the revenue received from the exportation of Qatari Petroleum-based products. Hence, the question of whether reliance on Petroleum-based exports are good for Qatar’s economy in the long run or not.  Qatar’s government should rely on Petroleum-based exports. …………………………………………..

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Qatar government should continue relying on Petroleum based exports since the Qatar economy is doing so well right now. Currently, Qatar’s oil and other petroleum products are the country’s major economic engine and governmental revenue sources. It is driving a high the drastic economic growth in the county and the high per capita income levels. Additionally, revenue from there Petroleum-based products is used in the robust state spending in the public entitlement in addition to the booming of the construction spending. For instance, the revenue generated will help in the preparation of the country to host the world cup in 2022.

So, quarter over-reliance on Petroleum-based products such as oil and natural gas is most likely to continue up to the future. Research indicates that natural gas and other Petroleum-based products reserves exceed 25 trillion cubic meters, which amount to 13% of the total international ranking as the third-largest country in the world. Additionally, the proved oil reserves of oil exceed 25 billion barrels which allows for production which can continue for almost 56 years.  Even though there is dominance in the oil and natural gases, the Qatar government is making significant growth using the revenue generated to enhance the non-oil sectors like the manufacturing industry, construction and the financial services. This will help in making the non-oil GDP drastically increase shortly. Hence, the Qatar government should keep on relying on Petroleum based product revenue.

Further, the Qatar government should continue with relying on Petroleum-based exports since it generates so much revenue ensuring that there is no need for imposing any unpopular taxation on the population. In most cases, when the government cannot made enough income for catering for its expenditure, it ends up pressuring unpopular taxes to its citizens. However, in Qatar, the government does not need to impose any unpopular taxation to generated income for balancing their expenses. Since Qatar’s economy has its cornerstone as the production and exportation of product based products than half of the government’s revenues are generated from these products, which makes 90% of the country’s exports.

This indicates that the government since the government owns all the hydrocarbon resources and has full control of how the resources are exploited in their roles in the economy.  Consequently, the governmental expenditures amount to 31% of GDP. For instance, in 2018, there was a conservation projection for the nation’s experts, which gave the national breathing room on its budget. The government is budgeting on the preparation of the 2022 world cup, which demands a large budget.  However, the government will not be forced to impose any unpopular taxation to the people due to the budget burden. Instead, the government will use export revenue in catering for its large budget. So the government of Qatar should continue relying on Petroleum-based exports.

As the chief economic advisor of the Qatar government, I advocate that the government should rely on the Petroleum based export to generate income since it enables the government to offer free public goods forever.  For a government to be in a position of providing free public products for the public for a long time, it must have enough income and revenue. For the Qatar governments, it generates over $40 billion as revenue from the Petroleum based exports. This means that the government can plan its expenses accurately, ensuring that part of the enormous income is used in providing free public goods for the public. It is through revenue generated from Petroleum based exports that the government can afford that. Hence as the chief chairman, I would advise that the Qatar government should continue to rely on Petroleum-based exports since it generates enough income for offering free public services.