Beyond oil: a Switzerland in the sands | Business | The Observer

Beyond oil: a Switzerland in the sands | Business | The Observer


Neither have the Qataris got too overwrought about the recent rise in the oil price to a six-month high above $67 a barrel, which has led some commentators to speculate about a resurgence of the petro-powers. Opec, the oil producers' cartel, wants to see the price stabilise at around $75 a barrel, which it reckons is the level needed to ensure investment in new supplies. Whether or not that pans out, the Qataris are interested in moving beyond petro-power and rebasing their economy so they are not hostage to a volatile oil price.

Ahmad Anani, a partner in the Al-Tamimi law firm in Doha, says: "I don't think Qatar perceives itself as a petro-power in the conventional sense ... There is no interest in flexing their muscles like Vladimir Putin, or in blowing money in Mayfair casinos. They are using the money to develop the country."

Qatar has been cushioned from the global downturn by its position as the world's leading exporter of liquefied natural gas (LNG) - gas that has been turned into liquid form, making it easier to ship around the world. The UK is a big customer: the Queen and the Emir opened a new LNG terminal in Milford Haven last month. But despite the fact that LNG is a superb resource, the Qataris see no reason to rest on their laurels.

Phillip Thorpe, chairman and chief executive of the Qatar Financial Centre (QFC) Regulatory Authority, says: "Whether oil is at a sustainable level is anyone's guess. The real point is that there has been a maturity around the way the government is approaching oil and gas revenue. It is a wonderful bounty today, but what about tomorrow? There are decades of gas reserves and you would think it's a good reason to go to the beach - but that is not future-proofing the economy."

Thorpe is a key player in one form of future-proofing: the push to turn Doha into a regional financial centre - a Switzerland in the sand, with insurance and wealth management as major elements.

The QFC's headquarters, where Thorpe has his offices, are in a building that is only a few years old - though that makes it practically an ancient monument by the standards of West Bay. It started in 2005; now it has 113 staff and licensed its 100th institution at the end of last year, a Qatari full-service Islamic bank. Next month it will launch Qatar Insurance Services, a system for processing and trading between insurers and reinsurers, with 17 firms as strategic partners.

Another major initiative is the setting up of the Qatar Finance and Business Academy, to try to ensure there are enough well-trained local staff to run a 21st-century financial centre.

Jon Morton, QFC's director for financial development and a former deputy principal of Henley Management College, says: "We need to concentrate on middle-management talent - things like the English language, and a focus on the customer, not an internal focus."

The structure and the skills of the population are a serious challenge. Of the 1.5 million residents, only around 250,000 or so are native Qataris; the rest are expats. It means very few people will be supporting what could be a very large and turbocharged economic engine. Mohamad Moabi, assistant general manager with Qatar National Bank, says: "The challenge is to develop citizens for a post-oil economy. A knowledge-based economy is very important."

To that end, education is free from kindergarten to university level. The seriousness of the commitment to learning is manifest in Education City, a 14 sq km development on the outskirts of Doha that houses not only schools but outposts of leading US universities such as Cornell, Georgetown and Carnegie Mellon. As one British expat sighs: "If my kids were Qatari citizens, all my worries about education would be over."

Dr Mohamed Fathy Saoud, president of the Qatar Foundation, which backs Education City, says: "Human resources are more important than oil and gas resources. We are bringing one of the brightest facets of western civilisation to the region: the top universities. If you talk to people on the street they will be opposed to what the US and the UK did in Iraq, but this project is saying 'look beyond that to what these countries have contributed to education and research'."

The sheer pace of economic development is throwing up social and cultural issues. One is the situation of women. The Emir's consort, Sheikha Mozah, plays a highly visible role in a region where royal wives until recently were rarely seen and certainly never heard.

While it is a deeply conservative society, Qatari women can vote, drive and play a full part in the workplace: headscarves are a frequent sight, but the dress code for women is not as strict as in Saudi. Dr Sheikha Abdulla al-Misnad, president of Qatar University, says about half her staff and 70% of her students are women. "We are very proud of how well our young women are doing, but there is an issue about our young men. Girls work hard and get better grades in high school, while young men drop out." Girls have been high achievers partly because of cultural expectations, she adds.

"Society expects women to work in a safe and professional environment, in a high status job, not to be in low-skill jobs and this is part of the reason why they are they are so determined to succeed academically. It is creating social problems because women are finding their marriage suitors are less qualified.

"The number of single women is increasing. It is difficult for lots of young professional women to find a husband. People don't have taboos about women in education because when education started in Qatar it started for both men and women from the outset, unlike many universities in the West which had been were exclusively for men for decades before women were granted access to higher education."