Sometimes, it seems that all stories now connect to Qatar. Last week, it was British soccer player David Beckham signing for the super-rich club Paris Saint-Germain, owned by the Qatar Investment Authority. Earlier last month, it was revealed that al-Jazeera, the hugely powerful Qatari broadcaster, was launching in the US, where it was once known as “terror TV.” Why has this tiny Persian Gulf state — the richest country in the world per capita, largely thanks to natural gas — become so active, so attention-grabbing?
Of course, there is an element of the state doing what any person would do who suddenly came into fabulous wealth — shopping on a major scale. Some people go to Harrods; the Qataris buy the shop.
However, there are also clear strategies behind Qatar’s high-profile investments and its broader foreign-policy activism, which has made it a key player in the Arab Spring and beyond. The priority is to secure the country — and the continuation of the monarchy — from potential threats. Second, as its confidence grows, the royal elite is seeking to play a bigger role on the regional stage. It wants to write itself into the history of the Middle East at a time of huge historical importance.
The most straightforward reason for these overseas investments is to diversify the economy. More than half of GDP, and 70 percent of the government’s revenue, comes from gas exports. These should last a long time: Qatar’s reserves are the third-largest in the world, after Iran and Russia, and its population is far tinier. (Wealth is heavily concentrated among the estimated 250,000 citizens; about four times as many immigrants do much of the mundane work.)
However, there are still risks. Even before the gas runs out, the US’ shale gas revolution and Australia’s growing gas exports could bring down prices, and technological innovations could post further unforeseen risks. Qatar has also learned from the experiences of other Gulf countries, which have seen growth slump — and dissent rise — when oil prices have fallen. Smartly, Qatar is investing a good deal of its money in human capital — education, scientific research, training, art, films.
While some of their investments are about straightforward economic returns, others are about country-branding. In London, the Shard skyscraper, mostly Qatari-owned, brings dramatic visibility. In Paris, by contrast, millions of euros go into economic regeneration in the banlieux, likely to earn the gratitude of many unemployed youth, often from Arab Muslim countries of North Africa where Qatar has a growing influence.
What is more, by making themselves useful sources of capital at a time of low growth in the West, the Qataris are also taking out insurance policies with powerful allies who regard them as important for the stability not only of the Middle East, but of Western economies. If the ruling Al Thani dynasty were ever to face the kind of threats that Kuwait faced in 1990, larger global players would have a major stake in their survival.
Qatar has been the last of the six Gulf monarchies to come into such wealth. Just over a decade ago, it was seen as a backwater. Bankers recall the difficulty Qatar’s state companies faced in getting anyone to lend them money. Expatriates who went there were seen as rather eccentric. However, between 1998 and 2008, world gas prices tripled and the new Qatar was born.