The effect of oil and gas on Qatar's economy - Research Paper Example

The effect of oil and gas to Qatars economy Contents Research question or hypothesis 3 Literature Review 3 Research methodology and design 4 Proposed use of Research Findings and analysis 4 Work plan and timetable 7 References 8 Research question or hypothesis The research question for this paper is, “Analyze the effects of oil and gas sector on the economy of Qatar. Explore the increasing or decreasing dominance of oil and gas sector on the Qatari economy”. The null hypothesis for this research is that the oil and gas sector has no significant effect on the economic performance of Qatar. Based on the findings of the research, the null hypothesis would be validated. Literature Review The review of literature for this research paper deals with the effects of the primary sectors in the economy on the economic growth and development of the countries. It has bee observed that the nations all over the world which have attained rapid economic growth rates are majorly due to the contribution of primary sectors in the economy. The review of literature revealed that different countries have different primary sectors that have enabled them to attain comparative advantage. The countries in the Middle East and the members of the Organization for Economic Co-operation and Development have their primary sectors as the oil and gas sector in the economy. The oil and gas extracted and processed in the refineries in those countries are the major exports and the government revenue earners. Due to the increasing global demand for oil and gas, the countries having oil and gas as their primary sectors were able to export huge volumes of oil and at the same time build the proven oil and gas reserves within their geographical boundaries. The rich reserves of oil and gas have helped the OECD countries to attain high growth rate of GDP and per capita income. Research methodology and design The research methodology has been designed on the basis of the objectives to be fulfilled through the process of research. The secondary research methodology has been adopted in this case where the data and information has been collected from the government websites, reliable online referrals, etc. The secondary sources of information have been selected so that the research could be completed in quick time. The secondary sources to be used in this research are the government websites and the academic online referrals that would provide reliable information and lead to authentic research findings for interpretation and use. Proposed use of Research Findings and analysis The research findings and analysis could be used to determine the influence of the oil and gas sector on the economy of Qatar and the trend of economic performance of the country over the last few decades. Qatar was merely a pearl fishing centre until 1940 when the oil and gas fields were explored in the country for production and extraction of oil and natural gas. The oil and gas sector in Qatar is one of the major contributors to the economy of Qatar. The petroleum industry in the oil and gas sector has a share of 60% of the gross domestic product of Qatar. The country earns 85% of its export from the sell of oil and gas extracted in the geographical boundaries of the country. It has been found that the government earns 70% of the total revenues from the oil and gas sector of the country. The oil and gas sector of Qatar has given the country the highest per capita GDP among the nations in the world. Qatar has huge volumes of proven oil and gas reserves amounting to a volume of 15 billion barrels that is expected to provide sustainable economic output of the country for the coming 23 years. The natural gas of Qatar amounts to a reserve exceeding 7000 cubic kilometer which forms 5% of the total natural gas reserves in the world. Qatar ranks third in the capacity of natural gas reserves in the world. The economic performance of Qatar over the last decades have been presented below in tabular form in terms of GDP, currency conversion rate with respect to the GDP, inflation index and the per capita income of the country. Due to the comparative advantage of Qatar because of oil and gas reserves, the country exports huge volumes of oil and gas to other countries like Japan, South Korea, India, Singapore China, etc. In the seventies, the GDP per capita growth rate reached about 1156% for Qatar. However, the excessively high growth rate could not be sustained by the Qatari economy for which the per capita growth rate reduced to 53% in the eighties. However, in the nineties the global demand for oil and gas increased which acted in favor of the Qatari oil and gas exports (Ibrahim and Harrigan, 2012, p.10). Due to the comparative advantage the per capita growth of Qatari economy reached about 94%. The oil and gas exports boosted the gross domestic product of Qatar over the years that has been represented in the table given below (Ministry of Development Planning and Statistics, 2013, p.21). Qatar is now the richest country as the oil and gas sector has boosted the available liquidity in the Qatari economy. This has been due to the consistent growth rates of the Qatari economy over a long period of time as shown in the graphical form given below (Trading Economics, 2013, p.1). The consistently good economic performance and the growth of GDP of Qatar have reflected in the international currency conversion rates of Qatari Riyal against the US dollars. It has been found that the oil and gas exploration from the wells and refineries are going to be depleted by 2023. Hence, the oil and gas sector is going to loose its share of contribution to the economic output of Qatar in the years to come till 2023. The increase in income level and liquidity in the economy has been matched with the supply of goods and service in the Qatari local markets that has helped to keep the inflation under control. With the loosing dominance of the oil and gas sector in the economy in future, the Qatari government has focused on the natural gas reserves of the country that is located to the north-east coast of the country. The research findings and analysis could also be used to explain the importance of heavy industries in Qatar’s economy in order to attain sustainable economic growth. The heavy industries that are important to the economic stability and growth of Qatar are the steel industry, fertilizers and petrochemicals, etc. Work plan and timetable The work plan for the research on the effects of oil and gas on the Qatari economy has been detailed in the tabular form as shown. Time Table Tasks Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 Week 7 Framing the Research Question               Review of literature               Designing research method               Analysis and Findings               The initial task of the research proposal is to frame the research question. For this an overall idea has been developed on the economy of Qatar and the influence of the primary sectors. In the first week, the research question is framed correctly in order to fulfill the goals of the research. A review of the literature is proposed for starting the research process which is expected to take about two weeks of time. Followed by the literature review, the appropriate research method would be designed and the rational for selection of the methodology is justified. This is expected to be completed in a week’s time. The final part of the research proposal would be obtaining preliminary findings based on the analysis of the oil and gas sector on the Qatari economy and the further use of these findings would be determined. References Ministry of Development Planning and Statistics. 2013. Qatar Economic Outlook 2013-2014. [Pdf]. Available at: http://www.gsdp.gov.qa/portal/page/portal/gsdp_en/knowledge_center/Tab2/QatarEconomicOutlook2013-2014.pdf. [Accessed on 3 March, 2014]. Trading Economics. 2013. Qatar GDP Growth Rate. [Online]. Available at: http://www.tradingeconomics.com/qatar/gdp-growth. [Accessed on 3 March, 2014]. Ibrahim, I. and Harrigan, F. 2012. Qatar’s economy: past, present and future. [Pdf]. Available at: http://www.gsdp.gov.qa/portal/page/portal/gsdp_en/knowledge_center/Tab2/Qatar%20economy%20past%20present%20and%20future.pdf. [Accessed on 3 March, 2014]. Read More