Jun 09 2009

Qatar – The Rising Tide of Oil & Natural Gas Lifts Most

by at 6:49 pm under Uncategorized

Qatar is a successful version of a city-state that has been able to make use of its natural resources and is trying to diversify its economy.  Thus Jacobs would probably support many of Qatar’s efforts, although she might think that the state remains too dependent on natural resources.  [It is also worth noting that Jacobs does not see nations as the best unit of analysis, so she might not speak about Qatar as a whole.]  Qatar is located on a peninsula in the Persian Gulf.  Jane Jacobs, in her book Cities and the Wealth of Nations, notes that countries generally have one main city – in the case of Qatar this is Doha.  A US State Department web page on Qatar states that the majority of people in Qatar live in Doha.  (US Department of State, Bureau of Public Affairs, Background Note: Qatar, January 2009, www.state.gov/r/pa/ei/bgn/5437.htm)  Thus Qatar is defined by this one huge urban area.
Qatar is an extractive region that is largely dependent on natural resources for its wealth and makes extensive use of foreign laborers.  The country has large amounts of natural gas and oil and 60% of its GDP comes from those commodities (State).  Other industries include manufacturing, mining, power, and construction.  However, its exports remain 36% natural gas and 47% oil (State).  These exports only began in 1949, but increased dramatically in 1973 (State).  Qatar seems to have successfully accomplished the sequence Jacobs writes about “markets, jobs, transplants, technology, capital.” (p. 44)  Clearly, dramatic price decreases in oil and natural gas would have significant negative effects on Qatar’s economy, so it is important for Qatar to save for hard times and to try to diversify its economy.
As a result of its natural resource wealth, Qatar has created a prosperous life for most of its citizens.  The people of Qatar are generally very well off – in 2007 their per capita income was $67,000—fifth in the world—according to the State web page.  They are also well educated, with 98% of the population attending school through the age of 16 and an 89% literacy rate in 2004 (State).
The Qatari government has been seeking to diversify and innovate in other areas of its economy. (State)  Jacobs would approve, as she writes “economic life develops by grace of innovating.” (Jacobs, p. 39)  Through the Qatar Foundation, created by the Emir of Qatar in 1995, (Qatar Foundation web page, http://www.qf.org.qa/output/page10.asp) Qatar is promoting economic growth in the areas of education and research.  The Foundation built and runs Education City, which is a large campus containing six university campus branches, such as those belonging to Georgetown, Northwestern, Carnegie Melon, Texas A&M, and others. (Qatar Foundation web page)  Sponsoring higher education and research is certainly a useful way in which Qatar promotes innovation and this future economic diversity.  Furthermore, although not sponsored by the state, Al Jazeera has also developed into a media industry in Qatar and achieved worldwide fame as the first relatively free 24 hour news Arab international media station.  The fact that the Amir has allowed this innovation is certainly positive.  Qatar also seems to be moving to diversify into the large conference-hosting industry.  One high profile example was that they hosted the Doha round of the WTO talks.  I think that Jacobs would support these many efforts at innovation and economic diversification with the aim of growth.
The Qatari state also pursues ‘Qatarization,’ of which Jacobs would probably approve.  Qatarization aims to move Qatari citizens into important positions in joint ventures, etc., which would previously have been occupied by foreign intelligentsia. (State)   Jacobs promotes the use of local people, so that they are able to run operations without foreigners, if needed.  Thus she would likely approve of this nationalistic program.
Qatar is creating its own change, rather than being a passive source of natural resources.  Thus it is a positive example of which Jacobs would likely approve.

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