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World Cup 2022 will boost the Economy in Qatar

Guiding Principle

The winning bid for the 2022 FIFA World Cup™ has catapulted Qatar to one of the economically and financially most expectantly countries in the world. Naturally Qatar in particular, but also its Gulf neighbours will highly benefit from the event. The high hopes and expectations are well-founded; the hosting of one of the largest competitions and sports event in the world is a catalyst for development and expansion in the economy and will entail huge investment projects to build stadiums and associated infrastructure including but not limited to rail, air and road, hotel and tourism. This will attract foreign investors who are eager to be part of the economical growth of Qatar.

A. Winning the Bid

The successful winning of the World Cup 2022 bid is set to launch a huge infrastructure investment program in Qatar. FIFA’s decision to choose the State of Qatar to host the World Cup is not only a historic precedent, choosing an Arab country for the first time for one of the largest competitions and sports events in the world, but also carries with it enormous economic aspects. The expectations are high and in 2022 the whole world will look at Qatar. Qatar, holder of the world’s third-largest natural-gas reserves, has already announced plans to spend at least 100 billion dollars even before being selected to host the sport event.

B. Effects on the Economy

1.  Independence from Oil and Gas

Since several years, Qatar aims to get more and more independent from oil and gas and hosting the World Cup is another big step forward to it. The state will try to figure out, how it can benefit from the World Cup also after 2022.

2.  Costs of the World Cup Host and its effects on the Economy

The preparation of the World Cup will cost Qatar around $65 billion. The investment volume for creating the necessary infrastructure, construction of nine new football stadiums and refurbishments at three other stadiums, public facilities, tourism, communications and transportations will be a big challenge for the smallest nation to host the international tournament. The investment volume is set to be several billion dollars (75 billion dollars).

A huge percentage, around 40% of the budgets is planned for infrastructure projects, including rail, air and road links. Construction and real estate will be boosted.

To cope with the expected amount of approximately 400.000 fans, Qatar will need far more hotel rooms than currently available. To make use of the increasing tourist facilities Qatar is planning to develop the country to a tourism hub. It is, however, expected that many tourists will also stay in the neighboring countries and travel to the games from there. A new bridge will be linked to the neighboring Bahrain. The United Arab Emirates will be the second-biggest beneficiary of the World Cup as it is expected that some visitors take the chance to visit Dubai and some of its attractions as for instance the world’s largest tower.

3.  Effect on Foreign Investors

Not only Qatar and Middle East countries will benefit from the World Cup. Many foreign companies are also involved in some projects in Qatar and many are keen to be part of the economical growths of Qatar as the country starts looking around for the best expertise in various fields.

Deutsche Bahn AG, the German national railway for instance, has been awarded the contract to build Doha’s new 320-kilometer metro system and another German company will apparently build the air-conditioning systems for the World Cup stadiums. The German construction company Hochtief sold 10 % of its shares to Qatar’s sovereign wealth fund. Hochtief will be building most of the World Cup stadiums and the bridge between Qatar and Bahrain. With Austria, an agreement on double taxation has been signed, ensuring, that income and capital are not taxed twice. Many foreign investors hope and expect that the relatively strict investment rules for foreign investors, which recently have been loosened with Law No. 1 of 2010, granting foreign investors up to 100% ownership in more sectors in Qatar, will be more loosened soon. 

The increase in projects will further lead to a higher demand in local and international manpower and thus to employment increases and a wealth effect. The winning of the World Cup bid will enhance investor confidence in the economy of Qatar and as a matter of fact, Qatar will become more attractive for business and foreign investment. 

C. Non-financial benefits

Beyond the financial benefits, the value of social, cultural and intercultural value of the event is significant for Qatar but also the whole Middle East region as many tourists, journalists, business and sports people will visit the region. This is expected and wished to lead to benefits to Qatar and the region, including financial and non-financial benefits such as cultural understanding, political and social aspects.

D. Summary and Outlook

Qatar was already a country with one of the highest capital income before winning the bid. The economy is expected to grow 16% in 2011 to a value of 135 billion dollar. The hosting of the World Cup 2022 will be additionally, overall a catalyst for the development and expansion of the economy and population. We are pleased to advice all foreign investors, stock companies, medium sized companies, business men and women, as well as employees, trying to be a part of the developments, by bidding, investing, setting-up companies or simply by seeking for good job opportunities to be well prepared in order to fully benefit from this step.

April, 2011  Roueida Hamdan
  Meyer-Reumann & Partners – Dubai Office
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