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For Qatar, the FIFA World Cup is only one step in an formidable funding plan

Lecturer in administration on the College of Strasbourg, Laurence Frank explains on this article how the group of the 2022 World Cup suits into Qatar’s financial growth technique:For the Soccer World Cup which opened on November 20, Qatar could have spent 200 billion {dollars}. For the nation, the stakes are excessive: past the sporting facet, the occasion, controversial particularly due to the 1000’s of migrant employees who died on the stadium websites, goals to venture “delicate energy” (” delicate energy”) and altering worldwide perceptions.

Learn additionally – World Cup 2022: kick-off in Qatar, the controversies proceed

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The World Cup is certainly a part of a broader financial growth technique for Qatar which goals to strengthen its place in worldwide commerce. In 2013, three years after the attribution of the World Cup to the emirate, the accession to energy of the emir Sheikh Tamim Ben Hamad Al Thani accelerated this strategy of financial and societal transformation of the State which however stays anxious to reconcile the event of the nation and respect for traditions.

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The “Nationwide Imaginative and prescient 2030”, which redefines the contours of a post-hydrocarbon economic system within the medium time period, thus offers for investments in new applied sciences, a philosophical shift in the direction of the information economic system and the creation of “sensible cities” ( “sensible cities”) by which clever transport techniques will play a serious position.

Public-private partnerships

Nonetheless, the federal government of Qatar considers the participation of overseas non-public traders as an integral a part of its financial coverage, notably when it comes to infrastructure tasks, which represent the cornerstone of the “Nationwide Imaginative and prescient 2030”. In 2020, the federal government of Qatar enacted a regulation regulating public-private partnerships (PPP) for all sectors of the economic system, which despatched a robust sign to all firms within the development and works sector. public works (development) on a world scale, particularly to the notably coveted American firms.

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Learn our cheat sheet – What’s the Emirate of Qatar?

The services for the 2022 FIFA World Cup, largely constructed via PPP contracts, are due to this fact only one step within the huge growth venture of the emirate which sees in these public-private investments a possibility to modernize the nation and profit from state-of-the-art infrastructure (new roads, tunnels, colleges, telecommunications, solar energy crops, hospitals, resorts, and so on.). Over 850 US firms, 700 UK firms and 330 German firms presently function in Qatar.

Extremely-dependence on hydrocarbons

The emirate now derives most of its wealth from oil and pure fuel, which account for greater than 70% of complete state income, greater than 60% of gross home product and round 85% of presidency income. export. The second-largest hydrocarbon producer on the Arabian Peninsula in tonnes of oil equal, Qatar has the world’s third-largest pure fuel reserves, primarily positioned within the North Subject offshore area. With a GDP of 85,000 {dollars} per capita in 2020 (105,000 in 2011), the nation has the fourth highest buying energy parity ratio on the earth.

Qatari residents due to this fact take pleasure in a excessive lifestyle, particularly since they don’t seem to be topic to earnings tax. As well as, the company tax fee is 10%, excluding firms 100% owned by Qatari nationals and nationals of Gulf Cooperation Council international locations (Saudi Arabia, Oman, Kuwait, Bahrain , United Arab Emirates and Qatar) that are exempt. Employers will not be required to pay social safety contributions for the overseas labor they make use of, however contribute 10% to a pension fund for Qatari employees.

Integration into the worldwide economic system

To organize for the post-oil period and protect this wealth, Qatar, a rustic as massive because the Île-de-France area and with a inhabitants of two.9 million (together with 330,000 Qataris solely), has due to this fact determined to divulge heart’s contents to world commerce. A member of the World Commerce Group (WTO) since January 13, 1996, the emirate has seen its commerce surplus double in 2021 to 59.2 billion US {dollars}, representing a 3rd of GDP, i.e. a degree file since 2014. Exports are primarily directed to Asia (74% of exports in 2021): Qatar’s high 5 clients are China, Japan, India and South Korea. The European Union accounted for 9.0% of Qatari exports.

Learn additionally – They will the World Cup in Qatar regardless of the controversies: “I cannot deprive myself”

As for the principle suppliers of Qatar, which imports all of its uncooked supplies excluding hydrocarbons and 90% of its meals consumption, we discover the US (16%), China (15%) and the UK (7 .3%). France is Qatar’s tenth provider and seventeenth buyer.

Integration into the worldwide economic system additionally includes the emirate’s investments overseas. On this space, Qatar’s ardour for sport strongly permeates its technique. This notably includes Oryx Qatar Sports activities Investments (Oryx QSi), a three way partnership based in 2005 and managed by the Emir Al Thani, a rich soccer fanatic and proprietor of the Paris Saint-Germain Soccer Membership. It’s a subsidiary of the Qatar Funding Authority (QIA) which feeds the Sovereign Wealth Fund. For ten years, QSi has multiplied its fairness investments on the earth of sport: Prix de l’Arc de Triomphe, the tv channel BeIn Sports activities, the golf equipment of PSG, FC Barcelona, ​​Al Gharafa SC and Paris Handball. , amongst others.

Past sports activities…

In keeping with the Franco-Qatari Financial Circle Qadran, France is the second vacation spot when it comes to Qatari investments in Europe. Some 42 Qatari firms established in France function particularly as a “delegation” of the sovereign fund administered by the QIA, and their area of exercise goes far past sport.

Learn additionally – How Qatar managed to place itself on the worldwide scene

The technique aimed toward diversifying Qatari property in France includes, for instance, minority stakes within the capital of enormous French firms reminiscent of Airbus, Vinci, Veolia, Complete, AccorHotels and the Lagardère Group. [propriétaire du JDD, ndlr]. As well as, the emirate has invested in institutions such because the Lido, 35,000 sq. meters on the Champs-Élysées, together with the Élysée 26 shopping center, and even luxurious resorts such because the Hôtel d’Évreux on the sq. Vendôme (230 million euros), the luxurious Hôtel Lambert on the Ile Saint-Louis in Paris and the Carlton in Cannes.

It ought to be borne in thoughts that, since 2008, Qataris have benefited from a particular tax regime in France and are exempt from tax on capital good points on actual property. On stability, Qatar’s investments in luxurious resorts have additionally generated almost 13,000 jobs out of the 71,900 generated in France.

France is after all not the one nation to welcome Qatari investments. In accordance Bloomberg, the QIA has, for instance, made appreciable investments in the actual property of main Western cities thought-about to be strategic. In London, the QIA purchased the Canary Wharf enterprise district (after a bitter inventory market battle) which represents the image of European buying and selling. In the course of the monetary disaster of 2008, the QIA had additionally acquired shares within the banks Barclays and Credit score Suisse along with coming into the capital of the German producers Porsche and Volkswagen.

The celebrated character of sure acquisitions mustn’t, nevertheless, make us overlook the important: Qatar’s investments are a part of an unlimited long-term international funding plan aimed toward establishing its legitimacy and establishing its worldwide monetary credibility.

This text is republished from The Dialog underneath a Artistic Commons license. Learn the unique article.

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