Portfolio Management and Investment Policy - Essay Example

Qatar’s economy relies on gas and oil which contribute to nearly 50% of the country’s GDP, 70% of the revenue of the government, and 85% of export earnings. The sector of oil and gas has provided Qatar with a higher and one of the fastest growing per capita income countries in the past few years. An increase in exports of natural gas and sustainable high prices of oil until 2008 have assisted the economy in developing trade surpluses, foreign reserves, and budget. Currently, the country possesses nearly 15.21 billion barrels of crude oil reserves which represent approximately 3.2% of the oil reserves of GCC and nearly 1.1% of the oil reserves of the world. Qatar produces nearly 776 thousand barrels of oil each day and this current level of production is estimated to last for 54 years. When it comes to natural gas, the country is the richest of all in the GCC countries. At the end of 2008, its natural gas reserves stood at 25.56 trillion cubic meters, representing nearly 61% of the entire GCC natural gas reserves and nearly 14% of the world’s natural gas reserves. In the GCC region, the country can be called one of the most stable countries, given its prudent macroeconomic management and combination of natural resources.

Due to the higher global demand for energy, the economic boom continued till the end of 2008. In the past six years, the economy of Qatar grew as much as five times in size from 2002 to 2008, with an annual rate of 31.6% on average making nearly $19.6 billion (2002) to $100.4 billion (2008). The reason for such massive growth is a steady increase in energy prices as well as surging gas and oil production. The country has allowed significant foreign investment in the production of its gas field in the past decade and is predicted to become the world’s largest Liquefied Natural Gas (LNG) exporter in the future period of time. The country is also pursuing to attract foreign investment in the production of its other sectors such as non-energy projects by liberalizing the economy even more.