The oil crisis has driven Qatar into a vicious circle of debt from which it fails to escape. The middle eastern country is considered to be one of the richest countries in the world, but its wealth is built on debt, analysts have stated. The last few years have been hard on the country making its financial position very difficult. The situation is not all roses in the country which, per capita, is the richest in the world, all as a consequence of low natural gas and oil prices that have broken the backbone of the economy. Qatar is the world’s top liquefied natural gas exporter. This leaves Qatar with no option but to borrow more and more to be able to pay its old debts.
Qatar has adopted austerity measures to rein in the detrimental situation caused by the impact of lower oil prices on its finances from spiraling further by raising utility bills, slashing spending like payouts for government officials etc. The effects are not limited to the government officials. Layoffs are rampant at private companies. Companies in Qatar that rely on government contracts are feeling the pinch of the slowdown, reports from Qatar reveal. As a result of the slowdown these private companies are freezing salaries and terminating contracts of expatriate engineers, lawyers and consultants from countries including Britain, France, the United States and India.
The significant cutbacks to funding Al-Jazeera was a major sign of things not being well in the kingdom. Al-Jazeera drew the curtains on its American channel in April earlier this year and laid off 500 staff. Vodafone’s Qatar subsidiary said in May it would cut about 10 per cent of its workforce. In 2015 state-run Qatar Petroleum sacked more than 1,000 foreign workers, stating it was part of restructuring.
The economic assistance offered to other countries during these testing times by Qatar, is nothing but a gesture to demonstrate credit-worthiness to Western banks so as to borrow more capital. The tiny middle eastern country faces the first ever budget deficit this year worth $12.8 billion, in over a decade.
The 2022 FIFA World Cup to be held in Qatar is a similar eyewash to gain the confidence of the world. Unfortunately, the bubble it seems has burst. A source in FIFA informs that the governing body of the sport is not confident about Qatar’s ability to host the World Cup in 2022. The source says that Qatar is behind schedule as far as stadiums, accommodation for athletes and officials and related infrastructure is concerned.
The source states that unless FIFA witnesses some solid developments in Qatar that point towards the possibility of the World Cup being successfully held in the country, it is keeping all its options open. One of these options is to shift the World Cup out of Qatar. That sounds like a sound decision given the damaging reports on human rights violations faced by blue collar Asian workers who are building the infrastructure for the World Cup. The source says most probably the World Cup could be moved to England which already has the infrastructure and would be a more apt choice under the given circumstances. South Korea has also conveyed its willingness to host the 2022 World Cup.