Qatar: Fuelling growth

Barwa president of strategy and investment Dr. Yousif Al Horr outlined the drivers behind Qatar's development.

Qatar is at the forefront of many contractors, suppliers and consultant’s plans across the GCC. Like other states in the region, the construction market is being driven by a need to diversify the national economy away from a reliance on hydrocarbons.

Income from the world’s third largest proven natural gas reserves is being reinvested, resulting in huge construction projects.

According to the Qatar Economic and Strategic Outlook report published last week by Global Investment House (GIH), total projects in Qatar were valued at US $203.1 billion (QAR739 billion) as of June 1.

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“This level helped Qatar to account for a 9.3% share of the total projects of the GCC,” the report said. In a country that constitutes just 3.8% of the GCC’s total population of 38.5 million, the figure demonstrates how much is being invested in Qatari construction.

The list of projects is impressive, and diverse, from the $11 billion New Doha International Airport to United Development Company’s $2.5 billion The Pearl Qatar.

As evidence that the government’s foot remains on the developmental gas, the $5.5 billion Heart of Doha project was launched last month to rebuild a 350,000m² area of the city centre.

And at the end of April German firm Hochtief announced it had been awarded a $1.7 billion contract to build an 8km long shopping mall in the south of Doha – the biggest single deal in the European construction giant’s history.
Barwa Real Estate, one of Qatar’s biggest developers, turned in first quarter net profits of $53.3 million this year. President of strategy and investment Dr Yousif Al Horr revealed the main driver behind Qatar.

“The country has embarked on bold steps towards capitalising on its natural resources by establishing mega-industries to supply the world with gas,” he said. “Having the resources and establishing an industry that can convert those resources into money is the main driver.”

Al Horr also singled out certain decisions taken by the government. “The leadership in the state of Qatar has made one major decision – the country is going to spend,” he said.

“There will be continuous spending on  infrastructure in the country, and the government has indicated tens of millions of dollars to support this decision.”

Qatar can afford to pursue its ambitious development plans. According to the GIH report, GDP grew by 44% in 2008 to reach $102 billion. Per capita GDP was lifted to a record $70,630 – the second highest per capita GDP globally according to the CIA World Factbook.

Despite the abundance of projects across the country, Qatar, like some other Gulf states, has taken steps to protect its labour force. The country’s midday work ban will run 11.30am to 3.00pm from June 15 to August
31 inclusive.

Qatar is developing as it sees fit, but is not dogged by the same urgency as other states in the region due to its generous oil and gas reserves.

And with global energy demand now beginning to show signs of sustainable growth with crude nearing the $70 mark, the immediate future of Qatar’s construction industry looks similarly well oiled.