MIDDLE EAST • QATAR Doha – a focal point of the GCC port network
Focus on infrastructure and diversification
James Henderson reports from the energy-rich state busy gearing up for the 2022 World Cup with major port expansion underway.
As with many nations in the Middle East, Qatar is feeling the pinch financially due to a slump in world oil and gas prices. It has been reining in government spending in other areas, and along with other countries in the Gulf will introduce a 5% sales tax in 2018, as well as a wider drive for efficiency and value across the public and private sector.
In addition, in 2016, Qatar sold $9bn in bonds – the largest Middle East bond issue in history – in an effort to cover the 2016 budget deficit of $12bn, its first such shortfall in 15 years.
In the World Economic Outlook report, the IMF forecast that Qatar’s GDP growth for the 2016 would come in at 2.6%, down from 3.7% in 2015, as high state spending continued in a wider context of lower energy prices.
The gas-rich state is better protected than some of its neighbours, however, thanks to its huge sovereign wealth fund.
Looking ahead, the government’s strong policy direction and leadership look set to pay dividends, with the IMF anticipating real GDP expansion of 3.4% in 2017, the highest rate in the GCC, aided by manufacturing and financial services expansion that have contributed to economic diversification.
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Significant public spending will continue in 2017, as the government seeks to ensure a number of major infrastructure projects are completed on time, according to Oxford Business Review.
But tough decisions are being made, with the budget for the 2022 World Cup being cut by up 40%, with the number of stadiums being reduced from 12 to eight.
Qatar remains well placed as a leading light in the energy world
National Vision 2030
The good news for stakeholders in the ports and marine sector Qatar is that the development plans for Hamad Port are integral to the country’s long-term National Vision 2030 plans – which actually pre-date the awarding of the international footballing showpiece.
The 2017 budget, announced in December by the Ministry of Finance, allocates QR93.2bn ($25.6bn) for major projects, maintaining spending in key areas such as health, education and transport. According to the minister of finance, Ali Shareef Al Emadi, this would include QR46.1bn ($12.7bn) with some QR25bn ($6.9bn)
earmarked for infrastructure and transportation programmes.
The investment in ports and logistics, and the role of the completed facilities, is critical for the country to develop a more sustainable and diverse economy.
Away from infrastructure spending, Qatar remains well placed as a leading light in the energy world, particularly as the world’s leading producer and exporter of LNG – a commodity that is becoming increasingly important to the global energy mix as the demand for clean energy grows.
In its International Energy Outlook 2016, the Energy Information Administration said that Qatar is expected to continue to be the world’s number-one LNG spot and long-term supplier until at least the end of this decade, with the US and Australia the likely candidates to close the gap.
Reserves of natural gas in Qatar were measured at approximately 896trn cu ft (25.4trn cu mtr); this measurement means that the state contains 14% of all known natural-gas reserves, as the world's third-largest reserves, behind Russia and Iran, neither of which have the infrastructure Qatar boasts.
In a bid to meet its own growing domestic energy demand, Qatar is getting ready to start operations at its $10bn Barzan gas project this year, which will increase the country’s daily gas output by up to 2bn cu ft once capacity is reached.
Once working at full capacity, Qatar will have the resources to once more increase its LNG exports, particularly to the emerging and power-hungry nations India and China, as well as a number of its GCC counterparts.
Seatrade Maritime Review • Quarterly Issue 2 • June 2017 59
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