GRM 2010 GRM 2011

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With an area of under 12,000 square kilometers, Qatar is one of the smallest countries in the Middle East. Equally, the native population, approximately a quarter of a million, is one of the smallest in the Arab world. Despite these geographical limitations Qatar has one of the highest incomes per capita in the world. The country and its people are very rich. This massive national wealth has transformed Qatar into a major regional player and an influential participant in the global economic and political system. In the last few decades Doha has enjoyed good relations with states and non-state actors that see each other as rivals or enemies. These include Iran and Saudi Arabia, Hamas and Israel, among others. Doha has strongly supported the Muslim Brotherhood in Egypt and has been a major player in the Syrian civil war since 2011. The bulk of American troops in the Middle East are stationed in Qatar and the country is home to Al-Jazeera. Finally, Doha has taken the lead in mediation efforts to settle regional conflicts particularly in Sudan, Lebanon and Yemen.

A major drive behind this active foreign policy is the country’s enormous wealth. In the last few decades Doha has accumulated substantial financial assets by developing and exporting oil and natural gas. One can argue that without these oil and gas revenues Qatar’s role on the regional and global scenes would have been very limited. Stated differently, Doha’s active diplomacy has been backed by promises of generous financial assistance and investment.

This essay seeks to highlight the role oil and gas revenues have played in shaping the Qatari foreign policy in the last several decades. These hydrocarbon resources have had tremendous impact on the internal and external transformation of Qatar into a modern state and a leading regional and global influential player. The first section briefly discusses the history of oil and gas exploration and development and underscores Doha’s heavy dependency on oil and gas revenues. The second section examines the country’s financial vulnerability due to the fluctuation in oil and gas prices particularly in light of the recent sharp drop in oil prices and the substantial increase in US shale gas. The third section analyzes Doha’s efforts to address this vulnerability, mainly by seeking to diversify the economy and invest oil and gas revenues.