The FIFA World Cup is expected to draw over half a million visitors, almost a third of Qatar’s current population. The FIFA event at Qatar is expected to have a significant impact on the economy. Qatar had already outlined a plan to spend around $100 billion, being 87% of GDP (2010 GDP in current prices is estimated at $115 billion) on infrastructure projects as a part of the country’s ambitious National Vision 2030, to modernize the country. The FIFA event has only accelerated the infrastructure spending programme and can expect the completion by 2022.
As part of the plan, the government will spend more than $40 billion on projects, while the remaining share will be from government entities such as Qatar Petroleum. The plan includes, among others, a number of high profile mega projects, largely in the transportation, tourism, health, education and housing sectors. The plan also includes a $25 billion metro and rail network. the New Doha International Airport has the capacity to cater to 24 million passengers per year currently and could be expanded to handle 50 million passengers.
An additional $20 billion will also be spent to build and expand roads. This does not include the Qatar-Bahrain Friendship Bridge project at a cost of $4 Billion.
The Qatar World Cup bid outlines having 12 stadiums ready by 2022. The stadiums, costing around $4 billion, include three existing venues which would be expanded and nine new state-of-the-art stadiums with capacities of at least 43,000 each.
Qatar also plans to build 90,000 additional hotel rooms, although FIFA requires Qatar to build 65,000 rooms.
Because expansion in infrastructure had not kept up with the rapid growth of the economy or population. The new investments can help set the stage for further growth in the future. This also bodes well for Qatar’s plans to boost its tourism and become a pole of attraction in the region.
Spending will also have tremendous repercussions for the country’s financial sector. The banking and investment sector could be one of the main beneficiaries. Already, government backed projects have been very instrumental in 2010 in helping the banking sector’s quick recovery in the aftermath of the global financial crisis. Sustained future plans will help banks generate revenues through top line growth and increased fee generating businesses
Qatari authorities have a once in a lifetime opportunity to turn their economy into a global one. The 2022 World Cup is indeed a strong catalyst to realize Qatari growth dreams. The main sectors that will benefit include construction, infrastructure, hospitality and banking. There will definitely be significant opportunities for allied and service industries which are supporting and complimenting the aforementioned sectors. It is hence the most opportune time for related business to enter or expand in Qatar.
