DOHA: Qatar has been ranked as one of the top countries in the world in effectively managing its energy resources. The country has made rapid strides in ‘building institutions’ and ‘better governance’ of its extractive industry, Global research firm McKinsey Global Institute’s (MGI) latest report on energy-driven countries noted.
Qatar made to the top charts of a set of criterion set by MGI for effectively handling its resource sector and contributing to the rising global economy. The country ranked second among the top 10 countries in the world in terms of ‘economic development’.
The report “Reverse Curve: Maximising the potential of resource-driven economies“takes a closer look at how the global energy resource-driven can handle them more effectively in order to bolster the economic development. MGI set six benchmarks to indicate the elevation of the economic performance of 81 resource-rich countries so that they can continue to play a pivotal role in supplying natural resources to a rising global economy.
The benchmark index included Building the institutions and governance of the resources sector; Developing infrastructure; Ensuring robust fiscal policy and competitiveness; Supporting local content; Deciding how to spend a resources windfall wisely; and Transforming resource wealth into broader economic development.
Under the “Economic development” pillar Qatar that ranked second, after Norway and seventh place in “Institutions and Governance, in addition to featuring in high slots under other pillars.
Oman and UAE are among other GCC countries that have ranked top slots. “The Gulf countries, including Qatar, have made progress on some of these metrics, but they still have to improve their competencies in spending the windfall, and fiscal policy and competitiveness.”, the report noted. It also warned that the top players cannot rest on their laurels and will need to move quickly to remain relevant in the new global energy order. For example, Qatar is the world’s largest producer of liquefied natural gas, but by 2017 the country is facing big competition with Australia to the title largest LNG producer.
On the importance of the size of a country and its relative importance of the resource sectors, the report noted in countries with relatively small populations, such as Qatar, the extractive industry is far more important to economic development than in larger countries that are likely to have more diversified economy and larger domestic market. As a result, the extractive industry is the subject of much closer scrutiny by government in smaller countries.