Qatar Committed to 2022 World Cup Spending No Matter OilMohammed Aly Sergie
Qatar, host of the 2022 World Cup, will spend more than half its $60 billion budget for 2014-15 on new projects and won’t be dissuaded by falling oil prices, Sheikh Tamim Bin Hamad Al Thani, the emirate’s ruler, said, according to the Qatar News Agency.
“Our economy is strong and solid,” Al Thani said in a speech cited by the official news service. “Our budget is based on very conservative estimates of fuel prices.”
Brent has dropped 26 percent this year, heading for the biggest annual decline since 2008 on increased supplies. Qatar, a member of the Organization of Petroleum Exporting Countries, produced almost 2 million barrels of oil a day last year, 10 percent of Saudi Arabia’s output, BP Plc data on Bloomberg show.
Qatar has used wealth from the world’s third-largest natural gas reserves to buy stakes in Barclays Plc, Volkswagen AG and purchase London’s Harrods department store. Demand for gas helped Qatar quadruple its gross domestic product the past decade. U.S. natural gas is little changed this year while Brent fell to $81.91 a barrel from $110.80 at the end of 2013.
The nation plans to spend $210 billion over seven years on roads, stadiums, a rail network and a new city before the soccer World Cup. More than half of its 2014-15 budget of 218.4 billion riyal ($60 billion) will be for health care, education, infrastructure and transportation projects, Al Thani said, according to the news agency.
Oil and natural gas production contributes more than half of Qatar’s GDP, according to the U.S. Energy Information Administration, citing Qatar National Bank estimates. The energy sector has stalled because most new projects are completed, so other industries such as construction are being sought to drive economic growth.