INSTITUTIONAL FRAMEWORK: COOPERATION AGREEMENT

AND EMBEDDING IN THE GULF COOPERATION COUNCIL 148

5.2 TRADE AND INVESTMENT 148

5.3 ENERGY 149

5.4 SECURITY AND GEOPOLITICS 150

6 CONCLUSIONS 150

6.1 FOCAL POINTS FOR FOREIGN POLICY 151

REFERENCES 152

NIGERIAAZERBAIJANCOLOMBIAINDONESIAQATARCANADA

LIST OF ABBREVIATIONS

BAU Business as Usual

CCS Carbon Capture and Storage

CEN The EU GCC Clean Energy (Technology) Network

EU European Union

FDI Foreign Direct Investment FTA Free Trade Agreement GCC Gulf Cooperation Council GDP Gross Domestic Product

GHG Greenhouse Gas

GTL Gas–To-Liquids

IEA International Energy Agency IMF International Monetary Fund LNG Liquefied Natural Gas

LULUCF Land Use, Land Use Change and Forestry ND-Gain Notre Dame Global Adaptation Initiative NDC Nationally Determined Contribution

OECD Organisation for Economic Cooperation and Development OPEC Organization of the Petroleum Exporting Countries

QAR Qatari Rials

QIA Qatar Investment Authority

UNFCCC United Nations Framework Convention on Climate Change WTO World Trade Organization

POPULATION

(2019; growth rate y-o-y)

GDP PER CAPITA

(2018)

2.83 m (2.36 %) US$ 69,026 510 m (0.12 %) US$ 33,715 CO₂ EMISSIONS PER CAPITA (2014)

EXCL. LULUCF INCL. LULUCF

37.11 t 37.11 t

8.04 t 7.19 t

Fossil fuel rents

as % GDP (2017) 17.9 %

Fossil fuel

as % exports (2018) 94 %

Fragility (2019) Sustainable Stable Warning Alert

Human development (2018) Very high High Medium Low

Strength of governance (2017) Very high High Medium Low

Climate change vulnerability (2017) Low Medium High Very high

Sustainable energy development (2017) Very high High Medium Low

QATAR

Fossil fuel exports Other exports

Sources for dashboard statistics: Population (UN DESA 2018a); GDP per capita (current US$, World Bank 2018a);

CO₂ emissions per capita (WRI 2018); CO₂ emissions per capita (WRI 2018); Fossil fuels rents as % GDP (own calculation using World Bank data 2017a); fossil fuels as % commodities exports, fossil fuel exports to the EU as % total fossil fuel exports, fossil fuel exports to the EU as % total exports to the EU, fossil fuel imports from the EU as % total imports from the EU (Chatham House 2019); Fragility (Fund for Peace 2019, 45.4/120); Human development (UNDP 2018, 0.848/1);

Governance (World Bank 2017b, 376/600); Climate change vulnerability (ND-GAIN 2017, score 53.0/100); Sustainable energy development (56/100, World Bank 2017c).

Fossil fuel exports to the EU

as % total fossil fuel exports

Fossil fuel exports to the EU as % total exports

to the EU

Fossil fuel im ports from the EU as % total imports

from the EU

© adelphi

NIGERIAAZERBAIJANCOLOMBIAINDONESIAQATARCANADA

1 INTRODUCTION

Qatar is highly dependent on the production and export of oil and gas. The development of its oil and gas resources provides the backbone of its economy and the basis of its considerable wealth. Its reliance on oil and gas also makes Qatar vulnerable to price fluctuations and the phase-out of fossil fuels. Efforts to diversify the economy have only been effective to a limited extent so far. These efforts and other circumstances (e.g. the geopolitical position of Qatar in the Gulf region and the Middle East more generally) provide important entry points for developing EU-Qatar relations beyond fossil fuels.

The State of Qatar (henceforth Qatar) is a country of around 2.5 million inhabitants located in the Persian Gulf with neighbouring countries Saudi Arabia, the United Arabic Emirates, Kuwait and Iran. Of the total population, approximately 2 million are foreign workers, mainly from India, Nepal, Bangladesh and the Philippines. When Qatar started exploiting its fossil fuel resources in 1949, it had less than 16,000 inhabitants. In the 21^st century, population growth has been driven primarily by an increase of (primarily male) foreign workers (De Bel Air 2014). Qatar has a territory of only 11,571 km² (somewhat less than Northern Ireland) and is composed of eight municipalities, with Doha as the country's biggest city and capital. The country is highly urbanised with 99.4 percent of the inhabitants living in cities in 2017 (CIA 2018). Qatar gained independence from the United Kingdom in 1971 and is ruled as an absolute monarchy by Emir Tamim bin Hamad Al Thani, who has been in power since 2013.

In recent decades, Qatar has experienced dynamic economic development, driven by its oil and gas industry.

From 1995 to 2017, Qatar’s Gross Domestic Product (GDP) increased more than 20-fold to about US$ 167.6 billion (in current US$) (World Bank 2018a). Over the same period, GDP per capita grew four-fold to around US$ 63,500 (World Bank 2018b), one of the highest per capita incomes in the world. By 2017, industry and services each contributed approximately half of Qatar’s GDP, while the role of the agricultural sector was negligible (0.2 percent) (Index Mundi 2018). Poverty is an issue to some extent among the foreign population, but unemployment is all but absent. Qatar has been selected as the host of the 2022 FIFA World Cup, a prospect that has motivated numerous, ambitious construction projects in the country (which have drawn significant criticism – see below). Overall, Qatar has become a high-income country, ranking relatively high on economic welfare and human development indices.

Qatar’s relations with other countries in the region have been under strain in recent years, and particularly since 2017 when several neighbouring countries led by Saudi Arabia cut off diplomatic relations and established an economic embargo against Qatar. They accused Qatar of supporting the Muslim Brotherhood and of being a close ally of Iran. The embargo has constituted an enormous challenge, since Qatar is highly dependent on its neighbouring countries for food imports and general trade (CIA World Factbook 2018). In 2016, Qatar had imported goods and services valued US$ 5 billion from the countries behind the embargo and exported about US$ 5.6 billion of goods and services to these countries. However, since the embargo Qatar has largely succeeded in rebuilding its trade links and food supply chain with other countries (Collins 2018). In December 2018, Qatar furthermore announced its departure from OPEC, a sign of the troubled relationship with Saudi Arabi and its allies as well as of its strategic economic orientation towards producing and exporting natural gas rather than oil.