Historical background

Ruled by the al-Thani family since the mid-1800s, Qatar transformed itself from a poor British protectorate noted mainly for pearling into an independent state with significant oil and natural gas revenues. During the late 1980s and early 1990s, the Qatari economy was crippled by a continuous siphoning off of petroleum revenues by the Amir, who had ruled the country since 1972. His son, the current Amir HAMAD bin Khalifa al-Thani, overthrew him in a bloodless coup in 1995. In 2001, Qatar resolved its longstanding border disputes with both Bahrain and Saudi Arabia. As of 2007, oil and natural gas revenues had enabled Qatar to attain the second-highest per capita income in the world.

Economic overview

Qatar has experienced rapid economic growth over the last several years on the back of high oil prices, and in 2008 posted its eighth consecutive budget surplus. Economic policy is focused on developing Qatar's nonassociated natural gas reserves and increasing private and foreign investment in non-energy sectors, but oil and gas still account for more than 50% of GDP, roughly 85% of export earnings, and 70% of government revenues. Oil and gas have made Qatar the second highest per-capita income country - following Liechtenstein - and one of the world's fastest growing. Proved oil reserves of 15 billion barrels should enable continued output at current levels for 37 years. Qatar's proved reserves of natural gas are nearly 26 trillion cubic meters, about 14% of the world total and third largest in the world. The drop in oil prices in late 2008 and the global financial crisis will reduce Qatar's budget surplus and may slow the pace of investment and development projects in 2009.