2013 Index of Economic Freedom

Qatar

overall score71.3
world rank27
Rule of Law

Property Rights70.0

Freedom From Corruption72.0

Limited Government

Government Spending81.2

Fiscal Freedom99.8

Regulatory Efficiency

Business Freedom69.4

Labor Freedom63.4

Monetary Freedom80.3

Open Markets

Trade Freedom82.5

Investment Freedom45.0

Financial Freedom50.0

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Quick Facts
  • Population:
    • 1.8 million
  • GDP (PPP):
    • $182.0 billion
    • 18.8% growth
    • 16.6% 5-year compound annual growth
    • $102,943 per capita
  • Unemployment:
    • 0.4%
  • Inflation (CPI):
    • 2.0%
  • FDI Inflow:
    • $-86.8 million
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Qatar’s economic freedom score is 71.3, making its economy the 27th freest in the 2013 Index. Its score is unchanged from last year, with improvements in the control of government spending and monetary freedom offset by declines in freedom from corruption and labor freedom. Qatar is ranked 2nd out of 15 countries in the Middle East/North Africa region, and its overall score is above the world and regional averages.

Qatar’s economy continues to be “mostly free,” with foundations of economic freedom solidly in place. With a well-functioning legal framework, the country’s rule of law has facilitated vibrant economic expansion including double-digit growth on average over the past five years. Although the perceived level of corruption in Qatar has increased over the past year, the country’s record on tackling corruption remains much better than the world average.

As reflected in the country’s steady improvement in economic freedom since 2008, the Qatari government has pursued reforms to improve the entrepreneurial environment and broaden the economic base beyond oil and gas. The country’s open trade regime and growing status as a regional financial hub have also contributed to private-sector growth outside of the energy sector.

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Background

Qatar has been ruled by the Al-Thani family since independence from Great Britain in 1971. Political reforms promised by current Sheikh Hamad bin Khalifa al-Thani have largely stalled. Qatar is endowed with 25 billion barrels of proven oil reserves and the world’s third-largest natural gas reserves. Oil and gas account for about 85 percent of export revenues and more than 50 percent of GDP. Qatar has permitted extensive foreign investment in its natural gas industry and in 2007 became the world’s largest exporter of liquefied natural gas. With one of the world’s highest per capita incomes and almost no poverty, the country has largely avoided the political instability that other Middle Eastern countries suffered as a result of the “Arab Spring.”

Rule of LawView Methodology

Property Rights 70.0 Create a Graph using this measurement

Freedom From Corruption 72.0 Create a Graph using this measurement

The rule of law has been solidly respected. A well-functioning legal framework is in place, but the judiciary is susceptible to political influence and can be bureaucratic. Protection of intellectual property rights has been strengthened. The law imposes penalties for bribery on public officials and those who attempt to influence them illegally. Qatar continues to maintain the Middle East’s highest degree of transparency.

Limited GovernmentView Methodology

There is no income or domestic corporate tax. Foreign corporations operating in Qatar are subject to a flat 10 percent corporate tax rate. Aside from customs duties, there are no other major taxes. The tax burden equals 4.9 percent of total domestic income. Government spending is equivalent to 25.1 percent of total domestic output. Public debt hovers around 30 percent of GDP. High oil prices have resulted in very strong budget surpluses.

Regulatory EfficiencyView Methodology

The business environment is conducive to the formation and operation of new companies, but the pace of regulatory reform has slowed in recent years. Efficient bankruptcy procedures have not been fully developed. The labor force consists primarily of expatriate workers, and immigration and employment rules are relatively flexible. The government does not mandate a minimum wage. Inflation has moderated.

Open MarketsView Methodology

The trade-weighted average tariff rate is modest at 3.8 percent, and there are some non-tariff barriers. Foreign investment is limited to no more than 49 percent of capital for most activities, although up to 100 percent ownership by foreign investors may be allowed with government approval. The financial sector, in which the state continues to retain ownership, has undergone modernization. The stable banking sector remains competitive.

Country's Score Over Time

Bar Graph of Qatar Economic Freedom Scores Over a Time Period

Country Comparisons

Bar Graphs comparing Qatar to other economic country groups

Regional Ranking

rank country overall change
1Bahrain75.50.3
2Qatar71.30.0
3United Arab Emirates71.11.8
4Jordan70.40.5
5Oman68.10.2
6Israel66.9-0.9
7Kuwait63.10.6
8Saudi Arabia60.6-1.9
9Morocco59.6-0.6
10Lebanon59.5-0.6
11Tunisia57-1.6
12Yemen55.90.6
13Egypt54.8-3.1
14Algeria49.6-1.4
15Iran43.20.9


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