The world’s largest exporter of liquefied natural gas is leveraging innovation to pursue diversified growth.
Qatar is a destination that generally attracts investor interest. In just a few decades, this small desert nation has transformed into one of the richest countries in the world. Today, it is using its financial might to once again reshape its economy, paving the way for myriad new opportunities. According to international consultancy PwC’s latest CEO survey, 84% of Qatar’s top business leaders are “optimistic” about the emirate’s growth in 2024, with 71% expecting an increase in hiring, almost double the global average. An impressive 68% of CEOs surveyed expressed confidence in their company’s revenue potential over the next three years, pointing to bright prospects for Qatar.
By 2026, Qatar’s GDP growth is expected to reach 5.5%, up from 2.4% currently, which would place the country among the fastest growing economies in the world. In November, S&P Global Ratings reaffirmed its AA/A-1+ rating with a stable outlook, noting that “Qatar’s fiscal position and balance of payments remain strong, supported by its significant hydrocarbon reserves, its leading position in the global liquefied natural gas market, and substantial assets accumulated in the sovereign wealth fund. Qatar’s sovereign wealth fund, the Qatar Investment Authority (QIA), ranks eighth in the world, with assets totaling around $525 billion, according to data from the Sovereign Wealth Fund Institute, a US-based research platform.
Qatar’s economic strength rests on its vast reserves of natural gas, the third largest in the world, a resource the country knows will not last indefinitely. Like many hydrocarbon-dependent Gulf states, Doha is striving to transition to a “knowledge-based” economy. The authorities have developed plans and made strategic investments aimed at developing new industries, attracting foreign investment and creating a favorable business environment beyond the gas sector.
New technologies are a key part of this transformation, both to modernize existing assets and to position Qatar as a global leader in the digital sphere.
“Digital transformation plays a central role, with AI, cloud infrastructure and data-driven systems improving competitiveness across sectors. This approach, supported by strong infrastructure, strategic partnerships and workforce development, allows Qatar to continue reducing its dependence on hydrocarbons and become a diversified and innovation-driven economy in the region. , comments Yazen El Safi, technology partner at PwC Middle East.
Modernize the hydrocarbon sector
While Qatar positions itself as a future technological leader, hydrocarbons still dominate its economy, accounting for 90% of exports and 80% of revenues. Despite international pressure to reduce the use of fossil fuels to curb global warming, Qatar was still among the world’s top polluters in 2023, with 52.5 tonnes of greenhouse gases and 43.5 tonnes of CO2 per capita, according to the European Commission’s emissions database. Global Atmospheric Research (Edgar).
Transformative investments are paving the way for new fintechs.
Qatar has set an official goal of reducing its greenhouse gas emissions by 25% by 2030, but that doesn’t mean slowing down extraction. Instead, its North Field Expansion Project is expected to more than double liquefied natural gas (LNG) production to around 126 million tonnes per year by 2030. To reconcile increased production with environmental goals, Qatar is pioneering cleaner production technologies, including carbon capture and storage. (CCS), with plans to increase its CCS capacity by 400% by 2035.
Like many of its neighbors, Qatar is expanding its renewable energy portfolio, with investments in photovoltaic installations such as the Al Kharsaah solar park and the future Dukhan power plant. By 2030, solar energy is expected to represent 30% of the national energy mix. These projects will not only support households and businesses, but will also contribute to “clean” hydrocarbon extraction.
Building on its LNG expertise, Qatar is also exploring alternative energy sources, including hydrogen, methanol and ammonia, fuels that emit no carbon when burned, provided that They are produced without using fossil fuels. QatarEnergy, the national oil company, is building the world’s largest “blue” ammonia plant (meaning emissions are captured and stored) in the industrial city of Mesaieed. The billion-dollar Ammonia-7 plant, in collaboration with Germany’s ThyssenKrupp and the Athens-based Consolidated Contractors Company, is expected to produce 1.2 million tonnes per year by 2026.
Digital banking
Another technological overhaul is underway in the financial sector. Recent regulatory changes by the Qatar Central Bank (QCB), including new electronic KYC and cloud computing policies, are accelerating digital adoption. Institutional support from the Qatar Financial Center (QFC) helps test new ideas with a National Fintech Strategy and Digital Asset Lab. The launch of the Fawran instant payment system further boosted digital payments by enabling real-time transactions 24/7.
“These efforts and investments in digital transformation lay the foundation for fintech growth. The sector is particularly well positioned for digital payments and the expansion of Islamic fintech, making it an increasingly attractive market for innovation-driven companies,” notes Farah El Nahlawi, senior researcher at MAGNiTT, a regional startup research network.
Unlike other markets where new players have disrupted traditional banks, local lenders in Qatar remain at the center of the game. However, they are partnering with fintechs to develop cutting-edge products and services. According to MAGNiTT, fintech accounted for almost half of all transactions in Qatar in the first 10 months of 2024, making it the most funded sector.
Building a digital economy
Qatar is also making substantial investments in emerging sectors such as artificial intelligence applied to healthcare and education, sustainable water-saving agriculture and advanced robotics. Overall digital infrastructure spending in 2023 jumped 30% in 2023.
“Qatar is leveraging high GDP per capita to turn challenges into opportunities and build a resilient, technology-driven economy,” comments Al Safi, noting that the first real test for some of the new technologies was the FIFA World Cup. FIFA 2022. At this event, “the country pioneered AI-based crowd management, eco-friendly stadiums and advanced digital security, thereby setting a new global standard,” says- he.
In daily life, technology has already deeply impacted the delivery of government services, shopping experiences and soon air travel, as Qatar Airways will be the first airline in the MENA region to offer free internet access powered by Starlink from Elon Musk.
“Qatar has made significant progress in innovation,” adds El Nahlawi, but most cutting-edge technologies are imported. Until Qatar can develop its own research and development, it must attract foreign talent.
“The Qatari government has implemented strong policies to attract foreign innovation, positioning the country as a hub for global technology talent and investment,” observes Al Safi, citing programs like Startup Qatar, the recent Summit Doha Web and Fund of Funds initiative to attract global venture capital. Qatar also facilitates visas for technology professionals. This strategy has paid off, with the likes of Microsoft and Google establishing cloud and data centers in the country. However, Qatar faces strong competition from its regional neighbors such as the United Arab Emirates and Saudi Arabia.
“Qatar’s venture capital space benefits from strong government support, wide availability of capital and advanced digital infrastructure, making it a promising environment for technology and innovation-focused startups. innovation. …However, the country’s small population limits market scalability, and its venture capital ecosystem is relatively nascent, with a cautious investment culture that prefers stable returns. Although Qatar has great potential, investors may need to take a regional approach to tap into broader consumer markets and startup networks,” says El Nahlawi. Qatar’s fintech sector is benefiting from the GCC’s broader trends in digital adoption, with regional IT spending expected to reach $184 billion in 2024.
As Qatar prepares for the future, its ambitious investments in technology are set to reshape its economic landscape.
“We anticipate strong demand for skilled professionals and an expanding digital ecosystem, driving job creation, economic resilience and sustainable growth,” says Al Safi.
Strong governance, a clear vision and substantial financial resources are key assets that Qatar can leverage in pursuit of its goals for a technology-driven future. The next few years will be crucial in determining the extent to which these ambitions will be realized.