Index Trend Previous Quarterly Editions
Expropriation Risk: 43 ▲ Political Violence Risk: 35 ► Terrorism Risk: 5 ► Exchange Transfer and Trade Sanction Risk: 35 ► Sovereign Default Risk: 26 ►
Overall Risk Temperature TREND ►
Special topic: Protest intensity in 2022 and Q1 2023* 2022 Q1 2023 Low Low All protest: Low Low
Cost-of-living protest risk in 2023* Low Low
*Note: Protest intensity is calculated based on ACLED. Risk levels are calculated by WTW. Where data are missing no risk level will be displayed. For details of calculations, see the introductory essay.
Qatar has been affected far less by economic headwinds which in many other parts of the world have been exacerbated by high energy prices and disruption to supplies arising from the Russian/Ukraine crisis from February 2022. As the world’s largest exporter of liquefied natural gas in 2022, Qatar returned a healthy budget surplus after gas (and, to a lesser extent, oil) revenues surged in the early part of the year and remained at high levels thereafter. The return to surplus ended seven years’ of deficits after energy prices fell in 2014 and the regional boycott of 2017 and COVID-19 pandemic impact in 2020 caused further disruption.
While the successful hosting of the 2022 FIFA World Cup football tournament ended a decade-long programme of investment in sporting and urban infrastructure, the focus of economic activity in Qatar has turned to delivering the two-phase expansion of the North Field gas infrastructure. This will increase liquefaction capacity by 64%, and with much of the gas expected to come onstream in 2025 and the remainder in 2027, Qatar will remain a central player in the global energy landscape and to considerations of energy security both in Europe and in Asia.
State revenues boomed in 2022 and are expected to remain high in 2023, even if oil and gas prices soften. The authorities have long maintained subsidies on basic items of food and other commodities and provided utilities, including water and electricity, either free or at significantly below-market costs, especially for citizens. These measures blunt the impact of inflation and mean austerity measures imposed during earlier periods of budgetary stress have been limited.
The impact of austerity and inflation is spread unevenly in Qatar due to the demographic imbalance between citizens, who number about 350,000, and expatriates, who form most of the population of 2.9 million. While there are wide variations of socioeconomic status among non-nationals, many foreign workers in Qatar in the domestic, construction, and semi-skilled and unskilled sectors have little disposable income. While the impact of cost-of-living increases is significant on these groups, they have no way of airing discontent through the ballot box and risk losing their jobs and being deported if they engage in direct action.
Elections to the 45-member Shura Council in October 2021 caused tension among some Qataris driven only by the electoral law which enfranchised some and disenfranchised others rather than any form of socioeconomic pressure or grievance. While the next elections to the nationwide body are not until 2025, Qataris will vote in the autumn for the 29 seats on the Central Municipal Council in Doha. Turnout in recent municipal elections has been low, and this year’s election is not expected to act as a mobilizing force for citizens’ anger at economic issues.
Expropriation Risk 43 (Medium-Low) TREND ▲
Given the bedrock hydrocarbon industry’s prevailing model of joint ventures with oil majors, expropriation risks are minimal. Qatar is also touting its new industrial free zones, co-located with its new seaports and airports, as destinations for foreign investment.
The country has increased the number of areas where foreigners can own property. The 2019 foreign investment law should widen the range of sectors in which full ownership is permitted, although details are pending. Also, a proposed amendment of that law, if approved, will allow 100% ownership of the capital of Qatari shareholding companies listed on the Qatar Stock Exchange, a move that could spur inflows into listed companies.
Political Violence Risk 35 (Medium-Low) TREND ►
Qatar’s leader Sheikh Tamim bin Hamad Al Thani used the Qatar boycott of 2017-20/21 by other Gulf states to promote nationalist sentiment, with popular support coalescing around his rule. He has also centralized power in the Emiri Diwan and increased senior royals’ visibility in key government briefs, including the foreign minister, Sheikh Mohammed bin Abdulrahman Al Thani, who was named Prime Minister (while retaining his foreign policy role) in March 2023.
In October 2021, Qatar held long-promised elections for the legislature, but with power almost entirely centralised, the legislature is effectively a rubber-stamping body and will remain loyal regardless of the elections. Given neighbouring Kuwait’s persistent policy deadlocks due to its powerful parliament, the appetite for greater political openness in Qatar is weak.
Qatar’s large expatriate population means its security sector has traditionally focused on internal security, but the sharp downturn in relations with its large and well-armed neighbours, though improving now, has forced the country to re-evaluate its military; Qatar’s armed forces are growing exponentially.
The 2022 football World Cup passed off smoothly, with only a few incidents of minor disorder, mostly relating to travelling fans’ attempts to wear rainbow colours associated with LGBTQ advocacy. There were some instances of overcrowding outside stadiums, but no significant flashpoints or confrontations with the police or security services. The lack of easily available alcohol, which was banned in the stadiums, contributed to a family-friendly event, and resonated favourably with fans from the ‘Global South,’ countries and regions in Latin America, Africa, Asia and Oceania.
The end of the tournament was overshadowed by the ‘Qatargate’ allegations of improper influence at the European Parliament, but this is more of a reputational risk rather than a physical threat to security.
Terrorism Risk 5 (Extremely Low) TREND ►
Qatar has no terrorism and negligible organized crime. Well-paid security personnel and stringent border controls make successful terrorist attacks unlikely. Qatar has expanded its counterterrorism cooperation with the U.S.
The country has also made terrorist financing an increased focus of its domestic counterterrorism activities, in response to criticism over gaps in Qatar’s financial system. In 2019, Qatar ratified new anti-money laundering and counterterrorism financing legislation.
Exchange Transfer and Trade Sanctions Risk 35 (Medium-Low) TREND ►
Aside from formal central bank foreign reserves, which stood at around USD48 billion in February 2023 – sufficient for well over three months of import cover – Qatar has other liquidity and nearly USD500 billion in foreign assets held by the Qatar Investment Authority.
The country also has the capacity to raise foreign exchange through borrowing. As such, Qatar is very likely to remain committed to, and capable of maintaining, its currency peg to the U.S. dollar. There are currently no known international sanctions against Qatar.
Sovereign Default Risk 26 (Low) TREND ►
In November 2022, Standard and Poor’s raised Qatar’s long-term sovereign rating from AA- to AA and Moody’s upgraded its credit outlook from ‘stable’ to ‘positive’, reflecting improvements in the fiscal position arising from higher energy prices in 2022 as well as Qatar’s robust financial buffers, vast hydrocarbon reserves, and high per capita income. The country was last downgraded in 2017, following the neighbouring states’ boycott, and liquidity risks related to the banking system’s dependence on non-resident deposits, which account for more than a quarter of total deposits.
The banking sector remains overly reliant on external funding, which accounts for 47% of the sector’s liabilities at the end of 2021, prompting Fitch, in April 2022, to downgrade seven Qatari banks, including the largest, on concerns that the government’s ability to support the system could be stretched by the scale of non-resident funding.
However, high energy prices have greatly strengthened the government's balance sheet, propelling a budget surplus of USD24.4 billion for 2022 as oil and gas revenues surged by 67% in the first half of the year and remained at high levels for the remainder of 2022. A smaller surplus is projected for 2023, but sovereign default risks remain low.
