Worker scrutiny threatens Qatar growth

13 March 2014

If Doha’s ability to hire foreign labourers is hampered, this could delay projects and curb growth

Over the past twenty years, Qatar has achieved remarkable economic progress that has seen it become the world’s largest exporter of liquefied natural gas and the richest nation based on average per capita income.

Capitalising on vast hydrocarbon revenues that have produced bountiful budget surpluses, the country has $285bn-worth of projects planned or under way as it looks to diversify its economy. 

In its latest Article IV consultation on Qatar, the Washington-based IMF provides a mostly favourable outlook for the country’s economy, noting that it enjoys relatively low inflation, a large fiscal surplus and strong GDP growth underpinned by infrastructure spending.

Not all of the schemes in Doha’s projects pipeline can be attributed to its successful bid to stage the Fifa 2022 football World Cup, but there is no doubt that winning the right to host the event has accelerated development plans.

However, the IMF has also warned that one of Qatar’s biggest economic risks stems from its preparations for the tournament. The fund said the growing criticism the country has received over the living and working conditions of the thousands of migrant labourers, constructing the infrastructure required to host the World Cup, could raise costs and impact the availability of labour.

If Qatar’s ability to secure more expatriate workers is hampered by the ever-increasing scrutiny, this could delay projects and curb growth as the success of the country’s development model hinges on its ability to rapidly hire foreign labourers.

For its part, Doha has committed to improving the situation and has issued a workers’ rights charter covering World Cup schemes. However, whether these reforms will have the desired impact remains to be seen.

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