A fascinating article on the secret of Qatar’s success or why is Qatar so rich country? I will not only talk about GDP per capita and how much oil is here, but also how the country’s economy works without taxes, what you will get if you become a Qatari citizen, how to become a citizen (spoiler alert: you can’t), and much more.
It will be difficult for you to plan your dream trip to Qatar without these websites
Table of Contents
General information about Qatar’s wealth and how it is calculated
Here and below, the numbers are taken from open sources, there may be errors and inaccuracies, but it is not the numbers that are important here. The most important thing is how the calculation is made and why Qatar is so wealthy when wealth is understood not only as a country’s money, but also the well-being of its citizens, and this is very important.
Explanation:I will explain in the simplest and most accessible way possible so that everyone can understand. If economists are reading me, it is better not to read 🙂
- Qatar’s area is about 11 thousand square kilometers. This is 155th place out of 200 countries in the world. The country is quite small. For those who find it difficult to imagine, it is four times smaller than Lithuania or Switzerland.
- Qatar’s population is 2.6-2.8 million people. This is 139th place in the world. For example, 2.8 million people live in Lithuania.
- GDP (this is how much all goods and services produced by the entire country in a year in $) is about $270 billion per year. For understanding, this is only 65th place in the world. Any country from the top twenty has a GDP 5-10 times larger. But does that mean they are richer?
- For comparison, Lithuania’s GDP is $65 billion per year. The country is four times larger in area, with the same population as in Qatar, and its GDP is four times smaller. If we count very roughly, people in Lithuania are four times poorer.
More interesting facts about Qatar at the link.
Interesting to know:For example, India’s GDP is almost $3 trillion, 11 times more than Qatar’s. But in India, 70% of the population lives on $4 a day. Therefore, the GDP indicator itself does not show the well-being of the country and its citizens. For this, there is GDP per capita.
GDP per capita is when all the earned money is divided by all the people in the country. And we get what share of GDP falls on each resident of the country in $. And here Qatar is always in the top ten richest countries in the world. In recent years, even in the top five. But it’s not the richest, you might say? Absolutely right!
The GDP PPP of Qatar – or the wealthiest country in the world.
And this is where it gets interesting and the numbers come in that best reflect reality.
Let’s say (I’m using numbers for example) when calculating GDP per capita, both Qatar and, let’s say, Norway, have $1,000 per person. Therefore, these two countries occupy the same position in the ranking of the richest countries.
However, prices within each country are completely different. $1,000 in Norway is not equal to $1,000 in Qatar. Bread in Norway costs $5, while in Qatar it costs $1. This is where the economic indicator of GDP PPP per capita (purchasing power parity) comes in. This indicator takes into account how many goods and services each citizen can buy in their own country in their national currency. And here Qatar has not left the top three richest countries for the past 10 years. And regularly (once every 2-3 years) takes first place.
Stereotype about Qatar:Most of the information on the internet at the moment is confusing, as it is believed that if a country is the richest, then it is also the most expensive. But in reality, Qatar’s first place in the GDP PPP per capita ranking shows that the country earns a lot, but prices within the country are low. And with their earned money, citizens can buy more goods and services than anyone else in the world.
In fact, prices in Qatar for the main consumer basket of goods are no higher than in Paris or New York. And many goods here are even cheaper. Everything about prices in Qatar for all categories of goods that are of interest to tourists.
A brief history of Qatar’s economic success
We have already figured out why Qatar is so rich and how this is calculated. Because they earn a lot, and prices within the country are not high, allowing all citizens to live very decently.
In brief, the history of Qatar’s economic success:
It is interesting to know:No one here will be surprised that all of this is due to the extraction of oil and gas from a large number of deposits that Qatar has.
- 70 years ago, Qatar was a very poor country where 90% of the population lived in villages along the Persian Gulf. And the main occupation was fishing and pearl diving.
- There was no industry, medicine, schools, and what can we say, there was nothing. It was just a desert where people lived in houses made of clay and stones along the coast in small groups.
Important:In 1960, the population of Qatar was 47,000 people, and today it’s almost 3 million. Remember these numbers, as I will mention them again later.
Everything changed 60-70 years ago when oil was first discovered in Qatar, followed by gas a few years later. The prudent exploitation of these deposits allowed the country to earn billions of dollars a year. It’s important to understand that there are countries with the same reserves of natural resources that were unable to create anything meaningful, such as Venezuela.
The decisive role in the economic success was played by the former Emir of Qatar, who ensured that the money was not stolen or wasted on luxury, but rather invested fully in the country’s further development.
- Read about the sheikhs, Emirs, and rulers of Qatar, the power they hold, and who Sheikha Moza is in a separate article.
- The complete history of Qatar (all 70 years), as well as the Qatari crisis and the blockade by neighboring countries in 2017, can be found in this article.
Today, tiny Qatar is one of the world’s largest exporters of both oil and gas. Oil has always been less prevalent in Qatar, with gas being the primary natural resource. In terms of reserves:
- Qatar ranks 13th in the world in oil reserves, with a share of 1.6% of global reserves.
- In contrast, Qatar holds 12% of the world’s gas reserves, making it the third-largest holder after Russia and Iran.
Why is Qatar so rich, or what Qatari citizenship gives you
The last economic concept in this article:Budget deficit/surplus. A deficit is when a country spends more than it earns. This is true for 95% of countries in the world, including the US, Canada, and almost all of Europe. When there is a budget deficit, inflation rises and taxes increase. Budget surplus is a rare phenomenon. It is when a country earns more money than it needs.
Qatar has a huge budget surplus. Revenue from gas and oil sales allows the country to completely avoid taxes. Here’s a summary of what you get if you have a Qatari passport:
- No taxes: social security, income, and profit taxes. All tax rates are 0.
- There is no VAT in the country, as a result, you cannot get a tax refund on purchases, but this is a downside for tourists. And for locals, goods are simply cheaper by the VAT amount. In our country, by the way, VAT is 20%. This makes everything, from bread to plane tickets, 20% more expensive.
- Retirement age pension starts at $5,800 per month (in case someone didn’t understand, it’s per month).
- Salary is around $10,000 (it’s important to note that these two points are only for Qatari citizens, I’ll tell you more about this later).
- There are no utility bills for electricity, gas, etc. Gasoline costs around $0.55 per liter at gas stations.
- The state pays for every citizen’s education in any university in the world, the main condition is to return home to work. At the same time, locals all work in good positions with a good salary.
- The state helps with the purchase of housing, there is a huge fund where a bank account is opened for every child at birth, and this amount only grows. By the age of 18, there is over $100,000 there.
- And this is just a small part of the benefits for Qatari citizens. It is because of all these social benefits that Qatari citizens are considered some of the richest in the world. The state not only earns a lot, but also successfully shares its earnings.
I’m often asked, how to get Qatari citizenship? Nowadays, there are many countries where you can get a passport just by buying property or opening a business. And here’s the most interesting part.
Qatari citizenship – are there any chances?
To be honest, there are no chances. There are two ways to get a Qatari citizenship:
- Be born here, and both parents must be Qatari citizens.
- Live officially in the country for 25 years, work under employment contracts without violating any laws, convert to Islam, and pass a test in the Arabic language, history, and culture of Qatar.
- The article about the language in Qatar for tourists, including how English is used, the Arabic vocabulary required, and many useful tips for communicating with locals.
Regarding the first option, we can disregard it, but for the second option, I would say that if you look at the population growth chart (as shown earlier), it’s clear that the active growth of the population began in 2005. To date, there are no successful cases of individuals obtaining Qatari citizenship after living there for 25 years and passing all exams.
The number of citizenship applicants is expected to increase significantly only by 2030, and it’s unclear how many applicants there will be, whether it will be 100 or 1000 people. Only time will tell, but it definitely won’t be a mass phenomenon because the conditions are very stringent. It’s not like the Green Card in the United States, which can be won through a lottery.
Interesting fact:A subtle point that is often ignored, but it will give you a better understanding of the situation. Today, Qatar’s population is 2.8 million people. 60 years ago, it was only 47,000. A keen reader might ask, how did the population grow by 2 generations (50-60 times), given that only being born there is enough for citizenship? Did local women give birth to 10-20 children each?
Here’s the answer: Only 12% of Qatar’s population (approximately 300,000) are citizens. Everyone else has temporary residency, and the remaining 2.5 million people are migrant workers. Many migrants from India, Pakistan work on construction sites, as cleaners, and so on. There are also those who are top managers of Qatari companies.
All the benefits of Qatari citizenship that I mentioned earlier are only available to 12% of the population. Everyone else has no access to these social benefits. Their salaries are much lower, with a migrant worker on a construction site earning an average monthly salary of up to 1000 Qatari riyals (~$300).
In conclusion, even if Qatar isn’t the richest country in the world today, it’s definitely one of them. And it’s not just because of the budget surplus and the country’s large currency earnings. It’s because Qatari citizens (those 12%) are one of the richest nations in the world. They live very comfortably by any country’s standards.
The answer to the question of why Qatar is so rich is not just due to its vast gas reserves, but also due to competent management and a small population. Making 1.5 billion people in India rich is much more difficult than making 300,000 people rich in Qatar. If you look at the world GDP per capita PPP rankings, you’ll see that only small countries with low populations like Luxembourg, Singapore, Macao, Switzerland, and Qatar are at the top.
Resources to help you plan your dream trip to Qatar
- Flights at the best prices with discounts
- Car rental: Discovery Cars (cheaper – only by bus)
- Hotels and apartments in Doha: Booking
- Tours, excursions and activities (including extreme ones):
- Comprehensive travel insurance: EKTA
- eSIM virtual sim card with internet in Montenegro