The 2013 Arab Competitiveness Report produced by the World Economic Forum ranked Qatar as the most competitive Arab nation and the 11th most competitive country in the world. This listing is due not only to the gulf state’s substantial oil and natural gas reserves, but also to its forward looking vision.
Thanks to its considerable energy resources and relatively small population, Qatar has the highest per capita income in the world. But it also happens to have the highest water consumption per capita, despite having virtually no water resources. At the same time, Qatar is heavily reliant on foreign imports for food. Qatar’s leadership recognises that limited access to water and food threatens the country’s long-term prosperity. In response, Qatar has initiated a series of projects aimed at shoring up its future vitality. These are projects to watch, given the considerable financial resources devoted to them and their potential cutting-edge technological implications.
As Qatar knows all too well, water, food, and energy intersect in a mutually dependent system. Qatar relies on desalinated sea water for 99% of its consumption. It imports 93% of its food. For now and the foreseeable future, Qatar has enough oil and natural gas to offset these challenges. However, the desalination plants require a level of energy consumption that is both unsustainable and environmentally harmful. Furthering the unsustainable circumstances, Qatar offers substantial subsidies to water and power suppliers (oil at $2 a barrel, as opposed to the global market rate of $100). Meanwhile, Qatar’s low levels of food production leave it almost entirely dependent on foreign imports. By establishing the Qatar National Food Security Programme (QNFSP) and investing in renewables, the government is seeking to remedy this situation.
Created in 2008, the QNFSP aims to boost Qatar’s self-sufficiency with regard to food. A master plan for food security, to be released later this year, is expected to include blueprints for roughly 1,400 farms and an agro-industrial park for food processing. In implementing these plans, Qatar seeks the participation of international organizations to draw on established expertise from the field of agriculture and develop new best practices.
A new initiative called the Sahara Forest Project exemplifies this trend. A Norwegian company, the Sahara Forest Project AS (with investment from a pair of fertiliser companies), is creating a man-made ecosystem that draws on the resources Qatar does have in order to produce what it does not have. According to the company’s CEO, Joakim Hauge, this desert forest uses seawater, sunlight, sand, and CO2 to create food, clean water, and energy—all while having a positive impact on the environment. Though still in the developmental stages, this project has ambitions to expand within Qatar and beyond, in the hopes of becoming a go-to solution for dry climates with limited resources.
Meanwhile, Qatar plans to make its water treatment facilities more sustainable by creating solar powered desalination plants. The goal is to be producing enough solar power (1.8 GW) to generate 3.5 million cubic meters of water a day by 2024. This solar powered desalination initiative comes as part of an ever expanding water industry in Qatar.
These up and coming enterprises seem to represent an opportunity for investors in the agriculture and water sectors. With this in mind, it is important to consider what the investment climate is like. Perhaps discouragingly, the same report that placed Qatar 11th in the world in terms of competitiveness also ranked it just 42nd on openness to foreign competition. However, there are signs that Qatar is becoming more inviting to international trade and investment. As part of an effort to attain emerging market status, which it achieved, Qatar has recently increased foreign ownership caps, reflecting a greater interest in attracting foreign investment. Furthermore, a series of recent legal reforms have removed red tape for business, accelerated the exporting and importing process, and implemented measures to monitor borrowers’ creditworthiness. These moves support Qatar’s stated aim of becoming a regional hub for investment.
Despite the positive signs, some analysts are skeptical about the necessity, long-term viability, and prospects for success of the agricultural plans discussed above. With its very small land area (about the size of the US state of Rhode Island), its lack of rainfall, the sandiness of its soil, and its extremely hot temperatures, Qatar is an unfriendly place to farm. Cognisant of this, Qatar has actually begun investing in land abroad, in countries such as Kenya, Vietnam, and India.
So is it worth buying into the wave of new opportunities on the horizon in Qatar? Although the country may not represent a lush agricultural paradise, it does represent a well-funded living laboratory for cutting edge technology in environmentally-friendly agribusiness. As the ambitions of the Sahara Forest Project illustrate, the technology and practices developed in Qatar could have broader applicability. Meanwhile, there is clear opportunity in the renewable energy and water sectors, as Qatar funnels investment into these prioritized fields. These opportunities may be well worth exploring.