Before the discovery of oil, the economy of the Qatari region focused on fishing and pearl hunting. Report prepared by local governors of Ottoman Empire in 1892 states that total income from pearl hunting in 1892 is 2,450,000 kran. After the introduction of the Japanese cultured pearl onto the world market in the 1920s and 1930s, Qatar’s pearling industry crashed. Oil was discovered in Qatar in 1940, in Dukhan Field. The discovery transformed the state’s economy. Now, the country has a high standard of living for its legal citizens. With no income tax, Qatar (along with Bahrain) is one of the countries with the lowest tax rates in the world. The unemployment rate in June 2013 was 0.1%. Corporate law mandates that Qatari nationals must hold 51% of any venture in the Emirate.
As of 2016, Qatar has the fourth highest GDP per capita in the world, according to the International Monetary Fund. It relies heavily on foreign labor to grow its economy, to the extent that migrant workers compose 86% of the population and 94% of the workforce. Qatar has been criticized by the International Trade Union Confederation. The economic growth of Qatar has been almost exclusively based on its petroleum and natural gas industries, which began in 1940. Qatar is the leading exporter of liquefied natural gas. In 2012, it was estimated that Qatar would invest over $120 billion in the energy sector in the next ten years. The country is a member state of Organization of Petroleum Exporting Countries (OPEC), having joined in 1961.
In 2012, Qatar retained its title of richest country in the world (according to per capita income) for the third time in a row, having first overtaken Luxembourg in 2010. According to the study published by the Washington based Institute of International Finance, Qatar’s per capita GDP at purchasing power parity (PPP) was $106,000 (QR387,000) in 2012, helping the country retain its ranking as the world’s wealthiest nation. Luxembourg came a distant second with nearly $80,000 and Singapore third with per capita income of about $61,000. The research put Qatar’s GDP at $182bn in 2012 and said it had climbed to an all-time high due to soaring gas exports and high oil prices. Its population stood at 1.8 million in 2012. The same study published that Qatar Investment Authority (QIA), with assets of $115bn, was ranked 12th among the richest sovereign wealth funds in the world.
Established in 2005, Qatar Investment Authority is the country’s sovereign wealth fund, specializing in foreign investment. Due to billions of dollars in surpluses from the oil and gas industry, the Qatari government has directed investments into United States, Europe, and Asia Pacific. As of 2013, the holdings were valued at $100 billion in assets. Qatar Holding is the international investment arm of QIA. Since 2009, Qatar Holding has received $30–40bn a year from the state. As of 2014, it has investments around the world in Valentino, Siemens, Printemps, Harrods, The Shard, Barclays Bank, Heathrow Airport, Paris Saint-Germain F.C., Volkswagen Group, Royal Dutch Shell, Bank of America, Tiffany, Agricultural Bank of China, Sainsbury’s, BlackBerry, and Santander Brasil.
The country has no taxes, but authorities have announced plans to levy taxes on junk food and luxury items. The taxes would be implemented on goods that harm the human body – for example fast food, tobacco products, and soft drinks. The roll out of these initial taxes is believed to be due to the fall in oil prices and a deficit that the country faced in 2016. Additionally, the country has seen job cuts in 2016 from its petroleum companies and other sectors in the government.