THE STATE OF QATAR is a peninsula on the western edge of the Arabian Gulf, about the size of Connecticut. Qatar has the largest proven natural gas reserves in the Middle East and the second largest in the world — estimated at 900 trillion cubic feet, or the equivalent of about 162 billion barrels of oil. In partnership with many American companies and others, Qatar has successfully developed these resources, as well as its oil reserves, to become a key energy exporter and a fast-growing economy. GDP growth of 7% was recorded in 2006.
Under the leadership of the Amir, HH Sheikh Hamad Bin Khalifa Al-Thani, Qatar has become a prominent voice for progressive change in the region. A free press thrives in Qatar. Professional opportunities for women are growing, and women now comprise over 26% of the national workforce in positions that include senior government officials, physicians, university professors, and police. Two-thirds of the students at Qatar University are women, and the Government has actively supported women's participation in political affairs. Qatari citizens voted overwhelmingly on April 29, 2003 to adopt a new Constitution which includes broad guarantees of human rights and equality, including: "All people are equal before the law. There shall be no discrimination on account of sex, origin, language, or religion."
Qatar and the United States have been very active defense cooperation partners for many years. In the first Gulf War in 1991, U.S. and Canadian air units were based in Qatar, and Qatar itself was an active member of the coalition assembled to liberate Kuwait. On June 22, 1992, Qatar and the United States signed a comprehensive Defense Cooperation Agreement, and later established a military pre-positioning storage facility in Qatar — the largest outside of the United States — to support the defense of the region. Days after September 11, 2001, U.S. forces at the Al Udeid air base in Qatar launched air operations against the Al Qaeda terrorist network in Afghanistan. Qatar remains the principal air operations center for U.S. forces in the Middle East.
Qatar has made an extraordinary national commitment to quality education. Since 2001, some of America's most prestigious universities have established branch campuses in Qatar, at which they offer degree programs identical to those offered in the United States. These include the Weill Cornell Medical College, Carnegie Mellon University, Texas A&M University, Virginia Commonwealth University and Georgetown University. The students at these universities are drawn from Qatar and throughout the world. The presence of these universities has brought a culturally rich and diverse expatriate community to Qatar, and closer ties to the United States.
About Qatar
Sponsored section in the March/April 2006 issue of Foreign Affairs
Qatar: Focusing on the Future
It is a rough neighborhood, so rough that its two largest residents cannot even agree on whether to call it the "Arabian Gulf " or the "Persian Gulf." Either way, the region built around the shores of the Gulf conjures in the minds of many the images of two recent wars, a severe, forbidding landscape, and a similarly severe political and cultural environment, all afloat on a sea of oil.
Yet such characterizations of the region are largely unfair. Enormous economic and political strides are being made at the very center of the region, strides that contradict Western stereotypes even as they challenge the region to modernize and make it an attractive place in the world for international investors. Where is the engine for this change? It is in the Gulf emirate of Qatar.
With so much upheaval in the Middle East, the speed and ease with which major changes have taken root in Qatar has kept these important developments below the world's radar. But success cannot remain secret indefinitely. Over the past decade, Qatar's leader, Sheikh Hamad bin Khalifa al-Thani, has ushered in dramatic changes in his country's cultural, political, and economic systems. He has led a campaign against virtually every negative stereotype that characterizes the Gulf region, promoting free speech, women's rights, and voting rights, opening the state's educational system to international competition, curbing intolerance in the religious sphere, and demanding that Qataris, in spite of their wealthy birthright, succeed as individuals in their own right.
Most significantly, the Amir has accomplished these reforms while transforming Qatar from a tiny, oil-producing country to a diversified economy and a leading player in the natural gas industry. As the influential newsletter The Banker noted last August, Qatar now manages "the most competitive Arab economy and [is] a model for the region."
Sitting atop the third-largest reserves of natural gas on the planet, the emirate is poised to have a major voice in the energy debate of the twenty-first century.
THE TINY GIANT
Underpinning Qatar's emergence as a dynamic force in the Arab world is a tremendous natural inheritance. The emirate is home to only 860,000 people – of which 200,000 are Qatari citizens. Yet with 910 trillion cubic feet of proven natural gas reserves, Qatar has the third-largest reserves in the world after Russia and Iran. (Together, the three countries hold 58 percent of all the known natural gas reserves.) Most of Qatar's gas sits just offshore in the easily exploited North Field, the largest single offshore natural gas field ever discovered. A smaller onshore field, known as Dukhan, and several other small offshore sites round out this reservoir of energy.
Two important factors add to the significance of Qatar's holdings. The first is Qatar's reputation as a place that is highly receptive to foreign investment, unlike Russia or Iran, or for that matter Saudi Arabia, which has the fourth-largest reserves. Political stability, a clear financial and legal code, and a proven track record of large, unencumbered returns on major investments bolster this point. The Economist, in a 2005 survey of the natural gas industry, cited Qatar as a place that puts out a "welcome mat for foreign investors." The second salient fact is demand. The U.S. Energy Information Agency estimates that natural gas consumption is likely to increase 50 percent faster than oil consumption in the next half century. By 2020, a confluence of economic, political, and environmental imperatives is projected to propel natural gas over coal as the world's number two source of energy. Perhaps most significant, the world's supply of natural gas is estimated to be much larger than that of oil, meaning its value will likely increase as the century wears on. A study by BP last year pegged the world's supply of crude oil at 41 years, assuming 2004 exploitation rates. For natural gas, the supply is 67 years.
In such an atmosphere, a host of players – both on the consumer and producer sides – are scrambling to build the infrastructure of a future global natural gas marketplace that will dwarf anything existing today. Qatar – laissez-faire economically, dependable and openminded politically – is viewed by many as the most desirable partner in this marketplace.
While Qatar still ranks in the top 15 in oil reserves, the emirate determined early on that its future would be determined by how well it handled the transition from crude to gas. The effort started in earnest in the mid-199 0s, soon after the Amir took power, when Qatar expanded its capability to liquefy natural gas for transport to world markets. It also built Qatar Gas Transport into the world's leading liquefied natural gas (LNG) shipping company.
In the past three years, Qatar has signed agreements that will make it the dominant supplier of LNG to the United States, China, and Britain. Unlike statedominated efforts in competing supplier nations, most of these deals involve large stakes for foreign energy companies and private equity investors. A recent example is the deal signed by Qatargas and ExxonMobil, the largest such partnership ever created in the energy industry, worth an estimated $7.6 billion.
Agreements with Italian, Japanese, South African, Indian, French, Malaysian, Japanese and Spanish companies have also been sealed, accounting for only a portion of Qatar's reserves.
Meanwhile, the emirate's position in the market continues to improve. Iran's worrisome nuclear research, which has prompted threats of UN economic sanctions, and Russia's use of its natural gas supplies as a means of strong-arming Ukraine in December, have raised serious questions in Europe and Japan about the reliability of these countries as suppliers. Qatar is an inviting alternative.
DIVERSIFYING THE ECONOMY
The prescient decision in the early 1990s to make major investments in natural gas has echoes in other areas of Qatar's economy. As with most of the region's petroleum-based economies, including giants like Saudi Arabia, Iraq, and Iran, Qatar during the period from independence in 197 3 until very recently was almost totally reliant on oil exports for revenues. Unlike its neighbors, Qatar moved early to address this problem. "Qatar has not experienced the erosion of per capita gross domestic product (GDP) that has been seen in Saudi Arabia and some other Persian Gulf oil exporters in recent years," the U.S. Energy Information Agency report on Qatar notes.
The quest to diversify has extended to other industries, as well. Qatar Fertilizer Company (Qafco), jointly owned by the Qatar government and two Dutch companies, is now one of the largest suppliers of ammonia and urea fertilizer in the world, with lucrative contracts throughout the Middle East and South Asia. Qatar Steel Corporation (Qasco), another company with significant foreign ownership, has expanded its production capacity rapidly in the past several years to become a major supplier in the Gulf region.
The expansion of these and other industries has been made possible by a policy of government investment in industrial infrastructure, coupled with an attractive foreign investment climate. As the State Department notes, no instances of expropriation have occurred in the past three decades, and Qatar "does not delay remittance of foreign investment returns nor does it restrict transfer of funds associated with an investment such as return on dividends, return of capital, interest, and principal payments on private foreign debt, lease payments, royalties, and management fees. Similarly, there are no limitations on the inflow or outflow of funds for remittances of profits, debt services, capital, capital gains, and other returns." Qatar also regularly grants ten to twelve years in tax holidays for foreign investors. Reforms passed in 2000 allow foreign companies or investors to own up to 100 percent of companies in the agriculture, health care, education, and tourism industries. Foreign investment in the highly profitable petrochemical industries is limited to a 49-percent stake, but the government has opened many public services to foreign bidding and privatization, including the duty free and catering services at Doha International Airport and at the country's main port.
On a global level, too, Qatar claimed a place at the top table of world trade talks by hosting the 2001 WTO Ministerial Conference, where the Doha Round was inaugurated. In 2005 Qatar also served as chairman of the Group of 77 , helping spur rich nations on toward meeting the commitments of the Millennium Challenge Fund for development.
SPEAKING TRUTH TO POWER
Among the world's democracies, there is an increasing concern that important economic and commercial partners share the values of peaceful coexistence, religious tolerance, and respect for human dignity. In this regard, Qatar has moved deliberately to embrace the ideals of freedom of speech, gender rights, and intellectual openness so often missing from the region.
The best known of the Amir's initiatives was the founding in 199 6 of the Arabic language satellite news channel al-Jazeera. In the Arab world, this revolutionary development broke decades-old state monopolies on broadcasting and dissemination of information. Al-Jazeera gave Arabs from the Atlantic coastline of Morocco to the hinterlands of Sudan and Iraq the equivalent of a town square in which to gather, listen, and debate.
Long before the Internet took root locally, an independent media was not widely embraced by Arab governments. As the Middle East's first independent satellite broadcast network, al-Jazeera frequently angered governments accustomed to censoring information for their citizens at will. And despite some controversial decisions, such as regularly inviting Israeli officials or commentators to present their side of the Israeli-Palestinian conflict, al-Jazeera remains the world's leading Arablanguage channel.
Ground-breaking moves like that invariably ruffled feathers, but the Amir has backed al- Jazeera through difficult times, including expulsions of its correspondents from various regional capitals for probing too deeply into government corruption or public unrest. Iran, for instance, ejected al-Jazeera's Tehran bureau in 2005 for its reporting on Arab minority issues in the country's southwestern region. U.S. officials complained about al-Jazeera's coverage of the Iraq war, just as U.S. officials complained in 199 1 when CNN insisted on staying in Iraq when other American news organizations heeded the Pentagon's order to evacuate. But even in the face of a debilitating advertising ban instituted by Saudi state industries presumably unhappy with the channel's modern, open ethos, al-Jazeera has thrived and maintained its number-one rating in the Arab market. Significantly, most of al-Jazeera's competitors, including the Arabic market's number-two news channel, Al-Arabiya, are bankrolled by Saudi money. Even as al-Jazeera has created a new Arab media marketplace, spawning competitors with both state and private ownership structures, consolidation under Saudi ownership in the past several years is viewed as a major threat to independent media by international watchdog groups.
Culturally, the station's reach and emphasis on open debate has transformed the Arab political landscape, making it harder for disinformation to survive scrutiny. It also accomplished what generations of language instructors could never do: transforming "Standard Written Arabic" into a culturebridging common language in an Arab world where until recently the residents of Tunis or Baghdad or Cairo would have had difficulty communicating. In perhaps the greatest testament to the revolution al-Jazeera spawned, the BBC announced that later this year it will begin its own Arabic satellite channel, an indication that the Western media world recognizes that a mature market – and one open to varied view points – now exists in the Middle East. In keeping with the times, al-Jazeera launched an Internet website in Arabic three years ago and another in English in early 2005.
In the autumn of 2004, the Amir deepened his commitment to open dialogue further still, by inaugurating a series of televised political conversations dubbed "The Doha Debates." Produced in association with BBC News, the debates featured prominent intellectuals and former politicians wrestling with topics once considered taboo in the Arab world. Among the questions debated, whether "George Bush has kicked open the door to democracy in the Middle East" and whether there should be "beliefs in the separation of mosque and state." Among the debaters: former President Bill Clinton, Saddam Hussein's former U.N. ambassador, the former Malaysian leader Mahathir Mohamad, the Arab-American scholar Fouad Ajami.
The Amir continues to push ahead with modernizations not usually associated with the Arab world. Speaking last year in Doha at the Forum on Democracy and Free Trade, al-Thani insisted Qatar would continue to increase the voice of its citizens in government and urged other Arab leaders to move beyond "partial amendments to avoid criticism or ease pressure."
ONE 'PERSON,' ONE VOTE
Underreported stories are nothing new to Qatar, but many in the kingdom were surprised that the signing of the nation's new constitution did not garner more attention. Under the new charter, ratified by an April 2003 referendum, the kingdom took its first steps toward constitutional monarchy and away from the more authoritarian power once wielded by the Amir's predecessors. The constitution guarantees that 45 of the 60 members of the emirate's parliament will be directly elected (the rest being appointed by the Amir).
The gradual introduction of more democratic systems in Qatar has been a major thrust of the Amir's leadership. While hereditary succession is guaranteed and political parties remain illegal, the constitution can be amended after a ten-year moratorium expires. Among other things, the constitution created a separate judicial branch and enshrined basic human rights into law.
The latter was on display in 2004 when a newly created Qatari government watchdog agency, the National Human Rights Committee, criticized the police for several instances of alleged brutality and demanded clarifications in the country's citizenship laws. It was a degree of transparency that might be resisted even in some Western democracies.
Perhaps most striking, though, was the extension of full voting rights to all Qatari women, a rarity in a region where, only one country away, women can be whipped for daring to demand the right to drive a car.
As an example of the Amir's commitment to gender equality, his wife, Sheikha Mozah Bint Nasser al-Missned, is in charge of the Qatar Foundation for Education, Science and Community Development, the institution that runs the Doha Debates.
The Sheikha, Qatar's "First Lady," is not cut in the mold of the average wife of an Arab leader.
As Newsweek observed, she "demolished the traditional stereotype of a veiled, submissive Arab woman, pushing hard for gender equality and broader modernization."
A 'PENINSULA OF EXCELLENCE'
The signature project of the Sheikha's Qatar Foundation is Education City. With the support of the Amir, himself a graduate of Britain's Cambridge University and Sandhurst Military Academy, Education City represents one of the most revolutionary experiments in the Arab world today. Under the leadership of its President, Charles Young, a former Chancellor of UCLA, Education City is home to the Qatar branches of several leading Western universities, including the Cornell University's Weill Medical College, Virginia Commonwealth University, Carnegie-Mellon University, Georgetown University, and Texas A&M University.
The students at these universities are drawn from Qatar and throughout the world, and the degrees they receive are identical to those awarded at the home campuses. A new and intellectually rich community of American university faculty is thriving in Qatar.
Education City also is home to the Rand Qatar Policy Institute (RQPI), a joint venture with the Rand Corporation that focuses on development and regional economic issues in South Asia and the Middle East. The RQPI plays a major role in assessing the progress of Qatar's educational reforms and many other public policy issues.
Qatar also has launched an ambitious reform of its own university system, removing the hand of state bureaucracy from administrative and curriculum issues at Qatar University. Qatar University, founded two years after independence from Britain in 197 3, is in the midst of a complete overhaul of its personnel system and academic standards. While the touchstone is "decentralization," granting autonomy to individual institutions, it is also about exposing Qatari students to a wider range of viewpoints. "The Doha Debates" are an example of such exposure. Patterned on the famous debates held at the Oxford Union in England, the debates' audience consists primarily of university students. Qatar Foundation officials say that the primary function of the debates is to drive home this lesson: an opponent's point of view, even if it does not ultimately carry the day, can be valid and should be heard.
Beyond the high-profile initiatives at the university level, Qatar's primary education system is also being overhauled. Some of the reforms instituted in 2004 will sound familiar to any parent who deals with a state-run educational system: establishing curriculum standards to ensure students meet minimum requirements for their grade levels and annual assessments to measure the performance of individual schools.
In addition, there is an emphasis on the types of schools available, and to ensure variety, the government began distributing funds for the establishment of three dozen "independent schools" that are given much wider autonomy than traditional state schools in setting policies and choosing subjects of study.
And Qatar has taken a leading role in pushing for closer regulation of the region's religious schools, or madrassas, within the Gulf Cooperation Council (GCC), the regional consultative body that includes Saudi Arabia, UAE, Oman, Kuwait and Bahrain.
BILATERAL FRIENDSHIP
Since the first Gulf War in 1991 in which Qatari military forces fought alongside the coalition forces that liberated Kuwait, Qatar increasingly has been viewed as a friend of the United States and an advocate of peaceful, diplomatic solutions to the region's many disputes.
In 1992, the emirate signed a comprehensive defense cooperation agreement with America, and since then, Qatar has been the site of one of the largest pre-positioned stockpiles of U.S. military equipment in the world.
Qatar also served as the forward headquarters for U.S. Central Command during the 2003 U.S.-led war to oust Saddam Hussein, and it was an important hub of U.S. activity during the 2001-2002 campaign in Afghanistan. The emirate's al-Udeid airbase, which boasts the Middle East's longest runways, held up to 8,000 U.S. personnel at the height of the Iraq conflict and continues to be a key operational center for U.S. forces in the region.
Diplomatically, Qatar was the first Arab State to open business ties with Israel after the Oslo Accords were signed in 1993, and Qatar's First Deputy Prime Minister and Minister of Foreign Affairs, Sheikh Hamad bin Jassim bin Jabr al-Thani, is a lonely voice among his Arab colleagues in advocating dialogue among all the participants in the Peace Process. As he said at the Council on Foreign Relations last autumn, "Arab countries must take a step toward Israel through an international meeting or a meeting between Arab States and Israel and the cosponsors of peace, particularly the United States, in an attempt to come up with a clear vision to the period after Gaza."
EMBRACING THE FUTURE
With so much of the debate over the Middle East focusing on the past, Qatar is turned toward the future. Far from fearing progress, Qatar's government insists on it and actively hopes to see democracy take root at home and beyond its borders.
"We are on a path to democracy and reform, not overlooking the social fabric that characterizes our society," Sheikh al-Thani said at the Council on Foreign Relations, "And this was adopted prior to the events of September 11, and we have come a long way since then."
This commitment to adapting Qatari society to the demands of globalization and addressing Qatari citizens' desire for a greater role in their government are vital to the emirate's plans for the future. Bolstered by its vast oil and natural gas reserves, enhanced by a bilateral security agreement with the United States that has stood the test of time, and led by a genuine reformer who is embracing individual freedoms even as he insists on economic efficiency, Qatar's transformation offers a model for the region – and beyond.