Inside Look: Qatar Vs. Saudi Arabia: Who's Wealthier?
Two Gulf states, Qatar and Saudi Arabia, are often perceived as countries with immense wealth and resources. While both nations have a strong presence in the global oil and gas market, their economic strengths and weaknesses differ in many ways. In this article, we'll delve into the financial numbers and narratives behind each nation to uncover who's truly wealthier.
Both Qatar and Saudi Arabia are high-income economies with strong fiscal positions. However, Saudi Arabia's economy is larger and more diversified, driven primarily by its vast oil reserves. Qatar, on the other hand, has a smaller economy but has made significant investments in infrastructure development, real estate, and financial services. Gas revenue has enabled Qatar to maintain its fiscal discipline and build up significant foreign exchange reserves.
Both countries have taken steps to diversify their economies, but they are at different stages of this process. Saudi Arabia has introduced a series of economic reforms, including the establishment of a sovereign wealth fund, aimed at reducing its dependence on oil revenue. Qatar, which has always had a diversified economy, has also taken steps to develop its non-oil sector, including the tourism and financial sectors. Despite these efforts, the oil and gas sector still accounts for the majority of government revenues in both countries.
Qatar's economic model has been driven by the wealth generated from gas exports, particularly liquefied natural gas (LNG). The country has been able to attract significant foreign investment and use its gas revenue to develop other sectors, such as real estate, tourism, and FS. In contrast, Saudi Arabia has historically relied on oil exports and has only recently begun to explore alternative revenue streams.
Saudi Arabia has a larger economy in terms of nominal GDP ($776 billion vs. $365 billion for Qatar) and is one of the top oil producers globally. However, Qatar's per-capita income ($69,900 vs. $27,900 for Saudi Arabia) and sovereign wealth fund size ($450 billion vs. $400 billion for Saudi Arabia) are significantly higher. Additionally, Qatar has a higher gross savings rate (43.5% vs. 21.4% for Saudi Arabia) and has accumulated substantial foreign exchange reserves ($47.2 billion vs. $77.5 billion for Saudi Arabia).
The Composition of Their Economies
As per the 2013 World Economic Outlook, hydrocarbons accounted for around 70% of Saudi Arabia's exports, and 90% of Qatar's revenue is from LNG exports. Saudi Arabia has always been reliant on oil exports, which comprise a significant portion of its government revenue.
In contrast, Qatar has been taking steps to develop its non-hydrocarbon sectors, such as the tourism sector, with its infrastructure projects underway. In addition to this development of the tourism sector, the development of other sectors like financial services and manufacturing has driven the growth of Qatar's GDP for several years. However, oil and gas revenues still account for the lion's share of government revenue.
The IT Infrastructure
A notable segment of Qatar's non-oil sector is the information technology industry (IT) which includes not just information technology but also information technology services. A major portion of the non-oil sectors is made up by the low value segments of Information Technology, by sectors like written on-sale, such credit card services.
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