How former Emir Sheikh Hamad bin Khalifa Al Thani built Qatar’s economy 

Qatar’s Father Emir Sheikh Hamad Bin Khalifa Al Thani has died at the age of 74.

During his 18-year rule, Sheikh Hamad reshaped the energy-rich country’s domestic and global footprint.

When he assumed power in 1995, Qatar’s economy was limited in size and relied mainly on oil, while the vast gas wealth of the North Field site was still in the early stages of development.

In less than two decades, Qatar became the world’s largest exporter of liquefied natural gas (LNG), the owner of one of the largest sovereign wealth funds and one of the countries with the highest per capita incomes.

This transformation was not just an oil or gas boom fuelled by rising energy prices, but an overhaul of the country’s economic model that was underpinned by a strategy of investing natural resource wealth in building productive assets, financial institutions, infrastructure and human capital.

The economic shift did not begin with Sheikh Hamad’s assumption of power. It was preceded by his appointment in 1989 as chairman of the Supreme Council for Planning, the body then responsible for formulating Qatar’s economic and social policies, which allowed him to oversee the preparation of development programmes before he came to power.

Here, we take a look at Sheikh Hamad’s economic legacy that helped transform Qatar from a small Gulf economy to a major and influential player in global energy and investment markets.

How gas changed Qatar’s economy

The development of the North Field, the world’s largest natural gas field, marked the true starting point of Qatar’s economic transformation.

The decision to accelerate investment and expand gas liquefaction projects during the second half of the 1990s changed the country’s position in the energy market and propelled it towards global leadership.

Qatar went from exporting its first LNG shipment in 1996 to becoming the world’s largest exporter of the commodity in fewer than 15 years.

By 2010, production capacity had risen to 77 million tons per year, according to data from QatarEnergy and the International Energy Agency.

The impact of this boom was not limited to increasing revenues; it also cemented Qatar’s position as a strategic partner in global energy security, especially for the economies of Asia and Europe.

Data from Qatar’s Amiri Diwan reflect the scale of the transformation witnessed by the energy sector, as the added value of the hydrocarbons sector rose from 11 billion Qatari riyals (about $3bn) to 403 billion riyals (about $110.4bn) during Sheikh Hamad’s rule.

Unprecedented economic growth

The gas boom was directly reflected in the performance of Qatar’s economy, which became one of the fastest-growing in the world during the first decade of the millennium.

World Bank data cited by Bloomberg showed Qatar’s economy grew more than twentyfold during Sheikh Hamad’s reign, with gross domestic product (GDP) rising from about $8bn in 1995 to about $199 billion in 2013.

According to the International Monetary Fund (IMF), the economy also recorded the highest growth rates in the world during that period, with real growth reaching 18 percent in 2006 before rising to 26.2 percent in 2011, as LNG production projects came onstream.

From gas boom to capital export

The economic transformation did not stop at increased production or revenues, but it also extended to the way wealth was managed.

As part of building a system to manage financial surpluses, Qatar in 2001 established the Supreme Council for Economic Affairs and Investment under the chairmanship of Sheikh Hamad.

The council was tasked with diversifying domestic and foreign investments “with the aim of developing Qatar’s financial reserves and diversifying sources of income”, according to the Qatari Amiri Diwan.

Four years later, the Qatar Investment Authority (QIA) was established to manage the financial surpluses generated from oil and gas exports.

Sheikh Hamad implemented a policy based on allocating part of the energy revenues to long-term investment, with the aim of building sustainable sources of income beyond natural resources.

QIA quickly became one of the world’s largest sovereign wealth funds, acquiring stakes in companies such as Barclays and Volkswagen, as well as the United Kingdom-based Harrods department store in 2010.

Qatar’s investment policies expanded to cover almost every continent – from investments in football clubs, to global economic institutions, to London’s Shard skyscraper, among others.

The authority’s assets are now estimated at more than $500bn, according to the Sovereign Wealth Fund Institute, making it one of the world’s largest government investors.

Qatari citizens’ rising living standards

The economic growth was reflected in welfare indicators.

According to the World Bank and the IMF, Qatar during Sheikh Hamad’s reign became one of the countries with the highest GDP per capita in the world.

It exceeded $90,000 in terms of purchasing power parity, as it expanded spending on housing, education and health and recorded a steep decline in unemployment rates to very low levels.

Experts believe the rise in income was not solely the result of higher energy prices, but also stemmed from expanded government investment and the creation of jobs linked to energy and infrastructure projects.

Investment in people

In parallel with energy investments, Qatar also moved towards building a knowledge-based economy.

One of the first development decisions after Sheikh Hamad assumed power was the establishment of the Qatar Foundation for Education, Science and Community Development in August 1995 to serve as the main arm for investment in education, scientific research and innovation.

The country later attracted international universities including Georgetown, Texas A&M and Carnegie Mellon, in a move seen as part of a strategy to prepare for the post-oil and gas phase.

The health sector also saw significant expansion through the development of Hamad Medical Corporation and the establishment of new hospitals and specialised centres as part of efforts to improve the quality of public services and keep pace with population growth.

At the same time, the country’s economic openness, coupled with a policy of strengthening its position as a financial and commercial hub in the region, turned the expanding capital of Doha into an increasingly important centre for international economic and investment conferences.

The World Cup and the economy of the future

Gas revenues during Sheikh Hamad’s rule were not limited to financing Qatar’s budget, but were also used for massive infrastructure investments.

That period saw the launch of projects such as Hamad International Airport, Hamad Port, Lusail City and modern road networks, alongside projects that later formed the foundation of the Doha Metro.

These works helped transform Doha from a small Gulf city into a global urban hub, providing the foundation that enabled Qatar to become the first Arab and Middle Eastern country to host the FIFA World Cup in 2022.

After the country won the right to host the major football tournament, its infrastructure and construction sector witnessed a major boom as the government approved huge spending plans exceeding $200bn in infrastructure, including roads, stadiums, railway lines and the construction of a new airport and port.

An ongoing economic legacy

In 2008, the state launched Qatar National Vision 2030, a strategic plan aimed at building a knowledge-based economy with the goal of ensuring continued prosperity for future generations.

This vision, which continues to serve as the governing framework for economic policies, reflects a direction that began under Sheikh Hamad based on transforming natural wealth into a foundation for sustainable development.

And if the development of the gas industry was the starting point for Qatar’s economic transformation, the most prominent legacy of Sheikh Hamad lies in transforming exceptional energy revenues into long-term development tools.

Through the establishment of institutions such as the Supreme Council for Economic Affairs and Investment and QIA, the launch of Qatar National Vision 2030 and investments in education and infrastructure, Qatar moved from an economy dependent on oil exports to a model that combines energy strength with global investment influence.

This blueprint still forms the basis of the state’s economic policies that are being pursued to this day by Sheikh Hamad’s son and successor, Emir Sheikh Tamim bin Hamad Al Thani.