An Analysis of the Economic System of Qatar

What is the economic system of Qatar? The economy of Qatar is based on a mixed economy. The country’s economic system combines elements of a market economy and a planned economy.

The economy of Qatar, one of the highest in the world based on GDP per capita, has grown despite sanctions by its neighbors. Petroleum and natural gas are the cornerstones of Qatar’s economy, accounting for more than 70% of total government revenue.

In Qatar, the economy is composed of a private sector, consisting of individuals and businesses that make autonomous decisions based on self-interest, and a public sector, where the state determines the production and distribution of certain goods and services. No country is purely capitalist or purely communist.

What do the freedom indexes tell about the economic system of Qatar?

Now, to determine if a country is mostly a market economy or a planned economy, it is useful to examine some economic indexes. For instance, according to the 2022 Index of Economic Freedom, which measures the ability of every human to control his own labor and property, Qatar is ranked 44th globally and 3rd in the Middle East and North Africa indicating that the country has a moderately free economy.

In a similar way, the 2022 Freedom House index evaluates the state of political rights and civil liberties globally. Generally, market economies tend to align more with democracy and freedom, while command economies tend to be characterized by greater state control and fewer democratic and civil liberty protections. Qatar gets a score of 25/100, which qualifies it as Not Free.

Qatar is a country where the government controls what people do for political reasons, and people have limited freedom to choose (what, how much, and how to produce, whether to buy or not, selling price, etc.)

The Link Between Public Sector Employment and the Economic System of Qatar

An indicator of the extent to which the State is involved in the economy is the number of public sector employees. In Qatar, according to ILOSTAT, the number of public sector employees as a percentage of the total workforce is 9.9% (2020).

In the country’s mixed economy, the number of public sector employees as a percentage of the total workforce varies based on the specific policies and practices adopted by the State. Some economic activities are left to the private sector while others are under government control. The bigger the public sector the closer the economy is to being a command economy.

What do the biggest companies in Qatar say about the country’s economic system?

The biggest company in Qatar should also be looked at, as well as whether it is a state-owned or private company. In this case, Qatar National Bank is the largest financial institution in Qatar, providing banking services to individuals, businesses, and government entities.

The ownership structure of the company is split between the Qatar Investment Authority (50%) and the remaining (50%) held by members of the public

The historical factors that have influenced the economic system of Qatar

Qatar’s mixed economy system is the result of a combination of government intervention, private enterprise, and foreign investment.

The government has invested heavily in infrastructure, education, and healthcare, while also providing incentives for foreign investment. This has allowed Qatar to become a major player in the global economy, with a strong focus on oil and gas production.

Additionally, the government has implemented policies to promote economic diversification, such as encouraging the development of small and medium-sized businesses.


An Analysis of the Economic System of Qatar


One response to “An Analysis of the Economic System of Qatar”

  1. Qatar Avatar

    It is a nice review touching the key factors influencing the Qatar economic development. It would be interesting to know how Qatar went through the COVID epidemic and how the nation is picking up.

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