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The World Cup, only one step in Qatar’s formidable growth plan

For the Soccer World Cup which opened on November 20, Qatar can have spent 200 billion {dollars}. For the nation, the stakes are excessive: past the sporting facet, the occasion, controversial specifically due to the hundreds of migrant employees who died on the stadium websites, goals to undertaking “smooth energy” (” smooth energy”) and altering worldwide perceptions.

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 technique of financial and societal transformation of the State which nonetheless stays anxious to reconcile the event of the nation and respect for traditions.

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

Extremely-dependence on hydrocarbons

Nonetheless, the federal government of Qatar considers the participation of international personal buyers as an integral a part of its financial coverage, significantly by way of infrastructure initiatives, which represent the cornerstone of the “Nationwide Imaginative and prescient 2030”. In 2020, the federal government of Qatar enacted a legislation regulating public-private partnerships (PPP) for all sectors of the financial system, which despatched a robust sign to all firms within the development and works sector. public works (development) on a worldwide scale, specifically to the significantly coveted American firms.

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

The emirate now derives most of its wealth from oil and pure gasoline, 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 gasoline reserves, primarily situated within the North Discipline 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 this planet.

Qatari residents due to this fact take pleasure in a excessive lifestyle, particularly since they aren’t topic to revenue tax. As well as, the company tax fee is 10%, except for firms 100% owned by Qatari nationals and nationals of Gulf Cooperation Council nations (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 international labor they make use of, however contribute 10% to a pension fund for Qatari employees.

To arrange for the post-oil period and protect this wealth, Qatar, a rustic as giant 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 confide in 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 stage report 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.

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

Integration into the worldwide financial 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 this planet 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 accordance with the Franco-Qatari Financial Circle Qadran, France is the second vacation spot by way of Qatari investments in Europe. Some 42 Qatari firms established in France function specifically as a “delegation” of the sovereign fund administered by the QIA, and their area of exercise goes far past sport.

The technique geared toward diversifying Qatari property in France includes, for instance, minority stakes within the capital of enormous French firms comparable to Airbus, Vinci, Veolia, Whole, AccorHotels and the Lagardère Group. 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 lodges 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 must be borne in thoughts that, since 2008, Qataris have benefited from a particular tax regime in France and are exempt from tax on capital beneficial properties on actual property. On steadiness, Qatar’s investments in luxurious lodges have additionally generated practically 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 with Bloomberg, the QIA has, for instance, made appreciable investments in actual property in main Western cities thought of 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. Through 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 distinguished character of sure acquisitions shouldn’t, nonetheless, make us overlook the important: Qatar’s investments are a part of an unlimited long-term international funding plan geared toward establishing its legitimacy and establishing its worldwide monetary credibility.

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By Laurence Frank, Lecturer in administration, College of Strasbourg.

The unique model of this text was revealed on The Dialog.