2017 Index of Economic Freedom

Qatar

overall score73.1
world rank29
Rule of Law

Property Rights74.8

Government Integrity59.0

Judicial Effectiveness63.0

Government Size

Government Spending71.2

Tax Burden99.6

Fiscal Health97.4

Regulatory Efficiency

Business Freedom68.1

Labor Freedom65.4

Monetary Freedom80.6

Open Markets

Trade Freedom83.1

Investment Freedom55.0

Financial Freedom60.0

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Quick Facts
  • Population:
    • 2.4 million
  • GDP (PPP):
    • $319.8 billion
    • 3.3% growth
    • 6.0% 5-year compound annual growth
    • $132,099 per capita
  • Unemployment:
    • 0.2%
  • Inflation (CPI):
    • 1.7%
  • FDI Inflow:
    • $1.1 billion
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The oil and gas sectors remain the major drivers of Qatar’s economy, accounting for over 50 percent of government revenue. This has left Qatar subject to external shocks, although growth in manufacturing and financial services has contributed to economic diversification.

Deeper structural reforms are critical to enhancing competitiveness, particularly as low oil prices have led to the first fiscal deficit in 15 years. In 2016, Qatar sold $9 billion in bonds, the largest Middle East bond issue in history, in an effort to cover the budget deficit. Maintaining the sound management of public finance is crucial as major government investments in infrastructure and other projects continue.

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Background

The Al-Thani family has ruled Qatar since independence from Great Britain in 1971. Sheikh Tamim bin Hamad Al-Thani, in power since 2013, has emphasized such domestic issues as enhancing infrastructure, health care, and education. Qatar has largely avoided problems generated elsewhere by the Arab Spring uprisings, but it has been criticized for its support of radical Islamist groups. Qatar’s proven oil reserves exceed 25 billion barrels, and its natural gas reserves are the world’s third largest. After winning its bid to host the 2022 World Cup, the government expedited large infrastructure projects including roads, light rail transportation, a new port, stadiums, and other sporting facilities.

Rule of LawView Methodology

Property Rights 74.8 Create a Graph using this measurement

Government Integrity 59.0 Create a Graph using this measurement

Judicial Effectiveness 63.0 Create a Graph using this measurement

Property rights for non-Qataris are limited. The judiciary is not independent in practice. The judicial system consists of Sharia courts (for family law) and civil law courts, which have jurisdiction over criminal, commercial, and civil cases. Critics cite a lack of transparency in government procurement, which favors personal connections. Qatar has faced ongoing allegations of corrupt practices in securing the winning bid to host the 2022 World Cup.

Government SizeView Methodology

There is no income tax or domestic corporate tax. Foreign corporations operating in Qatar are subject to a flat 10 percent corporate rate. The overall tax burden equals 6.3 percent of total domestic income. Government spending has amounted to 31 percent of total output (GDP) over the past three years, and budget surpluses have averaged 15.0 percent of GDP. Public debt is equivalent to 35.8 percent of GDP.

Regulatory EfficiencyView Methodology

The process for launching a business and obtaining licenses has been made more streamlined. The labor force consists primarily of expatriate workers, and employment rules are relatively flexible. Fuel subsidies were scrapped in 2016 as liquefied natural gas revenues dropped and the emir criticized the dependency mindset created by years of heavy subsidization. The government has denied that it still subsidizes state-owned Qatar Airways.

Open MarketsView Methodology

Trade is important to Qatar’s economy; the value of exports and imports taken together equals 91 percent of GDP. The average applied tariff rate is 3.4 percent. Foreign investment in many sectors of the economy is capped, and state-owned enterprises distort the economy. The stable banking sector remains competitive, and investment laws have been amended to attract greater foreign investment in banking.

Country's Score Over Time

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Regional Ranking

rank country overall change
1United Arab Emirates76.94.3
2Qatar73.12.4
3Israel69.7-1.0
4Bahrain68.5-5.8
5Jordan66.7-1.6
6Kuwait65.12.4
7Saudi Arabia64.42.3
8Oman62.1-5.0
9Morocco61.50.2
10Tunisia55.7-1.9
11Lebanon53.3-6.2
12Egypt52.6-3.4
13Iran50.57.0
14Algeria46.5-3.6


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