Qatar is one of the smallest OPEC crude producers, yet the country has gained increasing prominence on the international level. The transformation of the macroeconomic profile of Qatar was made possible by its massive reserves of natural has.  Qatar indeed possesses one of the world's targest gas reserves and the government efforts to develop the production of liquefied natural gas have proven successful.

Qatar began its economic liberalization in the 1990s and considerable progress has been made ever since. For this it has tuned its attention towards the vast natural gas reserves and the country is investing heavily to develop various joint ventures in gas related industries, including the production of petrochemicals and fertilizers. More recently, the country has expanded its diversification efforts to include tourism and the construction sector is booming because of the huge investment programmes in roads, schools, water distribution and the preparation of Qatar's housing of the Asian Games in 2006. Recent efforts also tended to provide a boost to the development of small and medium sized industries that use the by products of the hydrocarbon production .

Economic performance

As a result of the high oil prices and prudent economic policies, the country has recorded rapid growth during the years 1998-2000. Specialists believe revenues from liquefied natural gas exports will rise steadily and catch up with crude oil revenues in a few years time, helping the government to fulfill its long term strategy of diversifying the economy away from its reliance on crude oil exports.

The rapid economic growth has led to Qatar having one of the highest per capita incomes in the world. According to the Planning Council, the gross domestic product per capita stood at US$ 28,125 in 2002, compared to a GDP per capita of US$ 30,620 in 2000 and US$ 28,545 in 2001.
The current annual gas production amounts to 0,5 trillion cubic feet, tapped through two major liquefied natural gas projects. LNG exports have risen by 400% between 1997 and 2002 and are expected to double by 2006. The long term target is for LNG production to reach 45 million tones per year by 2010, a threefold increase of the current output. Several long-term supply agreements were signed, including the Dolphin project which will provide gas for the United Arab Emirates and Oman and is to yield a net cash flow return of US$1 billion per year. Qatar also signed supply agreements with various other countries, including Japan (6 million tones during 25 years) and Korea (4,8 million tones during 20 years).
Qatar's development strategy has also been accompanied by structural reforms to strengthen the financial sector, increase the role of private enterprise and create a business-friendly environment.
There have been several developments on the privatization front since 1998, when the state telecom provider was first privatized. Since then, the power generation and water desalination plants have also been privatized, constituting the complete privatization of such utilities cooperation Council. In addition, construction is also going on for the first independent power and water treatment plant, which is majority owned by a foreign developer. New autonomous corporations have been introduced in ports, postal services and civil aviation, while plans are under way for municipal cleaning, Qatar Steel Company and Qatar National Hotels. The country has also implemented a new law which allows 100 percent foreign ownership of companies in agriculture, education, health, industry and tourism.

Future prospects

It is estimated that the total value of Qatari projects will exceed US$ 30 billion in the 2003-2005 period, second only to Saudi Arabia in the region. Gas projects amount for at least US$ 13 billion of that figure. More than US$ 25 billion is to be invested in gas and other projects in the years ahead. These projects would nearly double the country's LNG output to around 30 million tones in 2010 and turn Qatar into one of the top LNG exporters in the world.
Technologies for the direct conversion of natural gas into globally marketable and easily transportable liquid products have evolved significantly in recent years and are of particular interest to exporters of LNG and natural gas. Qatar is planning to become the biggest Gas-to-Liquids producer in the world with an output of more than 900,000 tonnes per year through seven separate projects.
The small OPEC producer has thus embarked on the first GTL plant in the Middle East and more projects are planned given its mammoth gas reserves. Qatar Petroleum is soon to launch its first GTL plant as a joint venture with Sasol International of South Africa. The plant will be the world's first commercial GTL project and is due to be completed next year. It will initially include two trains producing around 33,000 barrels per day, comprising nearly 24,000 barrels of GTL diesel, 8,000 barrels of GTL naphtha and 1,000 barrels of liquefied petroleum gas.
Qatar Petroleum furthermore signed an agreement with US-based Marathon Oil Company to carry out a study for a new GTL plant to be built at Ras Laffan. The project will have a capacity of 120,000 barrels per day of diesel, naphtha and related products and is targeted to be commissioned in 2008. A similar project in cooperation with Exxon Mobil Corporation will have a capacity of 102,000 barrels per day. 

Qatar's North Field, discovered in 1971, is the largest non-associated gas field in the world , with proven reserves currently estimated at over 900 trillion cubic feet, equivalent to about 162 billion barrels of oil. In the Middle East, Qatar has the second largest proven gas reserves, which represent 9,2% of the world's total reserves. The reserves are sufficient to support production of natural gas for over 200 years. The Qatari government and its foreign partners invsted at least US$ 15 billion into liquefied natural gas ventures, set up at the giant North Field. The Field extends over an area of about 6,000 sq.km. and lies mainly under the territorial  waters of Qatar.

Basic Economic and Financial Indicators

Source.: International Monetary Fund