Qatar: The economy of the future
Building on the momentum of last year’s historic World Cup, Qatar is racing towards an exciting new phase of development. Seeking to reduce its reliance on fossil fuels, Qatar’s next chapter will put sustainability at the heart of the economy
Last winter, the eyes of the world were firmly fixed on Qatar. As the first Middle Eastern nation to host the FIFA World Cup, Qatar delivered a landmark event over four fantastic weeks of football. A momentous occasion for the gulf state – and for the wider Arab world – the tournament marked a significant milestone in the nation’s development journey. The competition showcased modern Qatar to the world, with television broadcasts highlighting state-of-the-art stadiums and cutting-edge transport infrastructure in the capital city of Doha. Watching these slick images of a bustling, contemporary nation, it is all too easy to forget just how rapid and profound Qatar’s economic transformation has been.
Since declaring its independence in 1971, Qatar’s oil and gas boom has propelled it to new heights. The tiny gulf state – with a landmass smaller than the US state of Connecticut – boasts a fast-growing economy that significantly outstrips its size. And while the country’s vast oil and natural gas reserves have historically driven its rapid GDP growth, Qatar is now looking ahead to a more diversified future.
Since 2008, the nation’s policy direction has been shaped by the Qatar National Vision 2030; an ambitious development plan that seeks to transform Qatar into an advanced country by 2030, capable of sustaining its own development and providing a high standard of living for all its people for generations to come.
One of the core principles of the Qatar National Vision is economic diversification. While the country’s natural resources have unlocked vast wealth over the past 50 years, the nation is now seeking to gradually reduce its dependence on hydrocarbon industries. Capitalising on the success of the 2022 World Cup, Qatar is seeking to open itself up to international investments and grow its private sector, while exploring the potential of emerging industries such as tourism, sports, finance, technology, real estate and logistics. The tournament has, in many ways, set the stage for an exciting and transformative next phase of development for Qatar. As the nation moves into a new chapter in its history, the lasting legacy of the World Cup may be greater than anyone could have previously imagined.
As it begins its new stage of development, Qatar will be looking to build on the successes of its historic World Cup. One of the tournament’s most significant legacies is the impact it has had on the nation’s physical infrastructure. In preparation for hosting the competition, Qatar made significant investments in new state-of-the-art stadiums, high-speed transport networks and enhanced accommodation offerings. These projects were built with the post-tournament future in mind, and are now in the process of being repurposed and optimised for new uses. Investments in the Doha metro and tram service, for example, have boosted accessibility for the city’s residents and visitors long after the World Cup came to an end. The expansion of the Doha International Airport and the construction of a cruise terminal in the capital city have also helped to enhance Qatar’s connectivity in the long term, while the country’s specially designed sporting stadiums will find a new lease of life at next year’s Asian Cup.
The country is seeking to develop a knowledge-based economy, with new technologies at its core
This enhanced infrastructure will stand the nation in good stead as it seeks to cement its position as a premier tourist destination in the Middle East. Prior to the World Cup, Qatar was already a popular travel hotspot, but the competition has opened the country up to new visitors, in what has been a real boon for the tourism sector. Over 2.56 million people visited Qatar between January and August of this year – more than the total number of visitors the country attracted in 2022.
With its rich cultural heritage, futuristic capital city and year-round sunshine, it’s clear to see why Qatar is a rising tourist destination. But the country isn’t just looking to attract holidaymakers. Boasting state-of-the-art infrastructure and strong connections to the wider Middle East, the nation is also hoping to appeal to new international investors. World Finance spoke with Omar Alfardan, Managing Director at the Doha-based Commercial Bank, about the country’s development and the role of his own bank within that growth and expansion.
“Becoming an attractive destination for international capital after the domestic investment boom around the World Cup is a strategic objective for Qatar. The country is positioning itself as a gateway to larger regional markets by establishing trade and investment agreements with neighbouring countries. This strategy amplifies Qatar’s appeal to international investors,” Alfardan explains.
Indeed, the nation is aiming to create an ever more attractive business environment to boost foreign investment and domestic employment. The country is considered to have one of the least demanding tax frameworks in the world, and is in the process of enhancing its regulatory framework to offer a more transparent, predictable and welcoming environment for investors.
Technology also plays a key role in Qatar’s new economic ambitions. A growing number of incentives are in place for tech start-ups and research and development centres, in an effort to foster a thriving culture of innovation and entrepreneurship. Increasingly, the country is seeking to develop a knowledge-based economy, with new technologies at its core, and has set itself specific targets when it comes to training Qatari nationals and upskilling its workforce to prepare for both the challenges and opportunities of the future. Like many fast-growing economies across the globe, a complete and comprehensive digital transformation will be central to Qatar’s future development.
As climate change continues to climb up the global agenda, Qatar is making sustainable development a key priority. While its oil and natural gas reserves remain central to the nation’s economy in the short and medium term, Qatar is actively taking steps to reduce its reliance on hydrocarbons and embrace a more sustainable future. And the country isn’t just motivated by global sustainability efforts in this area – with 97 percent of the Qatari population living in urban areas along the coast, the nation is particularly vulnerable to rising sea levels, while its arid desert climate also places it at risk of extreme heat and drought. Transitioning to a more sustainable economy is therefore not just a moral imperative, but key to the country’s long-term survival.
Qatar is positioning itself as a gateway to larger regional markets
“Qatar has made significant progress in recent years in advancing renewable energy and energy efficiency initiatives,” Alfardan tells World Finance. “This strategic commitment aligns with the nation’s goals to diversify its energy sources, reduce its carbon footprint and contribute to global sustainability efforts.” In recent years, Qatar has launched several renewable energy projects, including the development of solar and wind power facilities, which harness the strengths of the country’s desert climate. The Al Kharsaah Solar Plant, located 80km west of the capital city of Doha, is now one of the largest solar plants in the word, capable of producing 10 percent of the country’s peak electricity demand. With its abundant sunshine and vast, unoccupied swathes of desert, Qatar is perfectly placed to benefit from solar power, and plants such as Al Kharsaah will be pivotal to its energy supply in years to come.
The nation is also emerging as a world leader in sustainable construction and urban planning. Over the course of the last decade, a number of ‘smart’ cities and districts have sprung up across the country, each with their own impressive energy-saving and carbon-reduction strategies. The city of Lusail, located just 15km north of Doha, is setting the standard for future developments in the country. As Qatar’s first sustainable city, Lusail is a Vision 2030 flagship project, showcasing an array of environmentally friendly design features and setting new green building standards that will shape the future of the Qatari construction industry. Its water-sensitive landscape plan is specifically designed to minimise water consumption, while its innovative district-wide cooling system is set to save 65 million tons of CO2 each year. Dubbed ‘the city of the future,’ Lusail is a living embodiment of the values of sustainable development – and exemplifies Qatar’s environmental progress on a grand scale.
Alfardan continues; “Qatar has made significant strides in advancing renewable energy and carbon reduction, positioning itself as a regional leader in sustainable development practices. These efforts not only contribute to Qatar’s environmental goals, but also enhance its energy security, economic resilience, and its global reputation as a responsible and forward-thinking nation.”
Financing the future
As Qatar embarks on an exciting new chapter in its development, the nation’s banking sector will have an important role to play in supporting this ambitious economic journey. Strong, resilient and well-regarded by international investors, the Qatari banking sector is well placed to drive growth and prosperity as the nation looks to diversify its economy.
A complete and comprehensive digital transformation will be central to Qatar’s future development
Growing the role of the private sector is key to the nation’s diversification efforts. Promoting entrepreneurship, supporting small and medium-sized enterprises (SMEs) and growing the start-up community are development priorities for Qatar, as it looks to transition to an innovation and knowledge-led economy. Quite simply, this cannot be achieved without the right support for the private sector.
“Supporting the next stage of Qatar’s economic journey is a priority for Commercial Bank, and we believe that the banking sector can play a pivotal role in this endeavour,” says Alfardan. “By facilitating investment, empowering SMEs, embracing digital transformation, promoting sustainability and fostering collaboration, we aim to be a catalyst for economic growth, innovation and prosperity in Qatar.”
Indeed, Commercial Bank is taking a multifaceted approach to supporting private sector growth in Qatar. It provides a broad range of tailored financial solutions for both local and international investors, with a view to helping businesses thrive and expand. Specialised investment advisory services, competitive lending terms and structured finance solutions all help to make Qatar a more attractive place to invest.
SMEs and small start-ups, meanwhile, require their own forms of targeted support. They are vital drivers of economic diversification and job creation, and therefore form the very foundations of the innovative, knowledge-based economy that Qatar wants to create. Through effective financial and non-financial support, Qatar’s burgeoning SMEs can flourish and grow.
“We are committed to empowering SMEs by providing access to capital, financial advice, and specialised banking solutions that cater to their unique needs,” says Alfardan. “Through this targeted support, we hope to support a culture that fosters entrepreneurship and innovation, in line with Qatar’s economic diversification goals.”
Securing financing is a significant milestone for any small business. But there are plenty of other hurdles that start-ups and SMEs have to face on their journey to growth and profitability. That’s why non-financial support can prove just as valuable as securing funding – and is something that Commercial Bank prides itself on providing. Alongside its personalised advisory service, the bank also offers comprehensive risk management solutions to help businesses mitigate risks associated with market volatility, currency fluctuations and other emerging challenges. By creating a supportive, nurturing environment for small businesses, Commercial Bank hopes to unlock the power of SMEs for the betterment of the wider Qatari economy.
Innovation is a defining principle of Qatar’s National Vision 2030. As the country looks towards its future, harnessing the benefits of technology will be crucial in order to reach its goals. Already, technology has transformed Qatari society, with the nation having the highest levels of social media usage in the world. Internet penetration has reached 99 percent in Qatar, and the gulf state is making a name for itself as one of the world’s leading countries for new technology adoption and investment. Its ‘smart city’ infrastructure boasts 5G technology and fibre-optic networks as standard, making it quick and simple for businesses and individuals to stay connected online. Start-up hubs such as the Qatar Science and Technology Park continue to attract leading tech firms such as Microsoft, Siemens and Cisco, with foreign investment and international talent flowing into Qatar at an impressive rate.
Qatar has made significant strides in advancing renewable energy and carbon reduction
Qatar’s tech transformation is well underway, and businesses need to make sure that they don’t get left behind as the nation races towards a digitally driven future. By embracing new and emerging technologies such as Artificial Intelligence, data analytics and robotics, companies can enjoy enhanced efficiency and productivity, reduced operating costs and improved communication services, among other benefits. But unlocking these benefits and successfully integrating new technologies into a business is not necessarily an easy task. When it comes to finances in particular, it is essential that any digital transactions are as seamless as they can be.
Commercial Bank is committed to helping its customers reach their digital goals. Its powerful and convenient digital platforms enable businesses and individuals to carry out their financial transactions quickly and efficiently, while its investments in innovative banking solutions give customers a range of choices to suit their individual needs.
“We are committed to evolving alongside our changing customer needs and preferences,” explains Alfardan. “We are continually enhancing our digital technology capabilities to ensure that we offer the right products. In this way, we can help our customers to reduce their reliance on traditional banking interactions, freeing up more time in their day. Our ultimate goal in this ongoing digital transformation is to provide an exceptional, personalised customer experience.”
From mobile payment solutions to bio-metric authentication methods, Commercial Bank is always looking for new opportunities to enhance the customer experience. Last year, the firm partnered with retail giant Lulu Group to trial the first cashier-less check-out system in Qatar, all powered by Commercial Bank’s innovative payment systems. The first-of-its-kind project demonstrated the bank’s commitment to digital innovation, and to meeting the ever-changing needs of its customers.
For its efforts in the digital space, Commercial Bank has been recognised with a number of awards, including being named the ‘Most Innovative Bank’ in the Middle East by World Finance.
“In today’s rapidly evolving financial landscape, banks that fail to innovate and adapt risk losing ground to more agile competitors,” Alfardan explains. “That’s why digital transformation is a central pillar of our five-year strategic plan. Our solutions blend advanced technology with a deep understanding of customer needs, ensuring a superior banking experience for every service.”
The global economic outlook has remained gloomy for some time. Last year proved to be a particularly turbulent time for the world economy. Inflation remained persistently high, with food and energy particularly affected, and many developed economies found themselves teetering on the edge of a recession. While Qatar enjoyed a substantial economic boost from hosting the 2022 World Cup, its growth has moderated over the course of 2023, showing that no country is completely immune to global economic headwinds.
However, despite these ongoing macro-economic challenges, Qatar is demonstrating remarkable resilience. Looking to build on the momentum of the World Cup, the nation shows no signs of slowing down when it comes to achieving its Vision 2030 missions, and the economic outlook for Qatar looks decidedly more upbeat than for many other countries in the developed world.
“We know that some economic volatility is expected to persist in 2023 and beyond,” says Alfardan. “Nevertheless, Commercial Bank’s strategic plan will allow us to effectively confront these immediate challenges and navigate the longer-term landscape.”
In fact, amid wider global economic uncertainty, Commercial Bank is experiencing significant growth in a number of key business segments. Its corporate banking division continues to thrive, and offers a comprehensive suite of financial solutions to meet the diverse needs of its customers. Likewise, the bank has experienced an increased appetite for its wealth management products and services, and is pleased to be able to assist its customers in their unique financial journeys.
“From early adulthood through to retirement and beyond, Commercial Bank works with its customers to proactively manage their finances, set realistic goals and make informed decisions,” Alfardan explains. “Our customised solutions support customers with a variety of aims – whether that be saving for education, purchasing a home, or planning to start a family. And with a long history in the Qatari finance and investment sector, Commercial Bank is a well-established expert when it comes to achieving financial goals.”
Giving something back
As demonstrated in its National Vision 2030, Qatar is becoming increasingly committed to environmental, social and governance (ESG) issues. In the next phase of its development, the nation is looking to balance economic growth with social development and environmental management, and this high-level strategy is already beginning to effectively trickle down to Qatari businesses and the wider community. Within Qatar’s banking sector, too, ESG principles are becoming ever more important. In recent years, Qatari banks have become more involved in green financing as part of their commitment to sustainability and environmental responsibility. ‘Green loan’ products are becoming an ever more common feature of the Qatari finance industry, and are being effectively used across the country to finance environmentally responsible initiatives. From water conservation schemes to waste management initiatives and large-scale renewable energy projects, green loans are enabling a vast array of environmentally conscious endeavours in Qatar.
“Commercial Bank is proud to offer green loans to its customers. We are deeply committed to sustainability and ESG considerations, both as an integral part of our corporate strategy and as a reflection of our responsibility to our stakeholders,” says Alfardan.
In line with Qatar’s National Environment and Climate Change Strategy, Commercial Bank is intensifying its efforts to reduce its carbon footprint, with a 25 percent greenhouse gas reduction target in place for 2030. And the bank’s ESG commitments don’t stop at sustainability. Commercial Bank also prides itself on maintaining good governance practices, and is one of just a handful of banks in the Middle East with deferred bonus arrangements for its senior executives.
At every level of its business, Commercial Bank is looking to exhibit exemplary ESG principles. Just as the State of Qatar has committed itself to a sustainable and socially conscious future, so too has Commercial Bank. With the steadfast support of Commercial Bank and others within the resilient and influential banking sector, Qatar appears to be well on its way to becoming a dynamic and diversified economy of the future.