Qatar's economy was in a downturn from in the mid-1990s. The Organization of Petroleum Exporting Countries' quotas on crude oil production, the lower price for oil, and the generally unpromising outlook on international markets reduced oil earnings. In turn, the Qatari Government's spending plans had to be cut to match lower income. The resulting recessionary local business climate caused many firms to lay off expatriate staff. With the economy recovering in the late 1990s, expatriate populations have grown again.

Oil production is currently around 800,000 barrels per day (bpd), and is expected to reach 1,000,000 bpd by 2008. At the current production pace, oil reserves are expected to last more than 40 years. Moreover, large natural gas reserves have been located off Qatar's northeast coast. Qatar's proven reserves of gas are the third-largest in the world, exceeding 900 trillion cubic feet. Qatar has the largest single non-associated gas field in the world, the North Field. Qatar sits on 14% of the worldís total proven gas reserves. Qatar currently exports 14 million metric tons per annum (mmta) of natural gas, and it expects to reach 77 mmta of liquefied natural gas (LNG) exports by 2010, thus becoming the largest natural gas exporter in the world. In five years, Qatar could very likely supply one-third of the worldís LNG needs.

The economy was boosted in 1991 by completion of the $1.5-billion Phase I of North Field gas development. In 1996, the Qatar gas project began exporting liquefied natural gas to Japan. Further phases of North Field gas development costing billions of dollars are in various stages of planning and development, and agreements have been concluded with the U.A.E. to export gas via pipelines and to Spain, Turkey, Italy, the U.S., France, South Korea, India, China, Taiwan, and the U.K. via ship.

Qatar's heavy industrial projects, all based in Umm Said, include a refinery with a 140,000 bpd capacity, a fertilizer plant for urea and ammonia, a steel plant, and a petrochemical plant. All these industries use gas for fuel. Most are joint ventures between U.S., European, and Japanese firms and the state-owned Qatar Petroleum (QP). The U.S. is the major equipment supplier for Qatar's oil and gas industry, and U.S. companies are playing a major role in North Field gas development and related energy and water infrastructure development.

The countryís economic growth potential is stunning. Qatarís GDP, currently around $30 billion, has grown at an average of 19% over the past five years. GDP grew by 20.5% in 2004. Qatarís per capita GDP is more than $30,000, soon to be the highest in the world. Even more important is the Qatari Governmentís strategy to utilize its wealth to generate more wealth by diversifying the economic base of the country beyond hydrocarbons.

Qatar pursues a vigorous program of "Qatarization," under which all joint venture industries and government departments strive to move Qatari nationals into positions of greater authority. Growing numbers of foreign-educated Qataris, including many educated in the U.S., are returning home to assume key positions formerly occupied by expatriates. In order to control the influx of expatriate workers, Qatar has tightened the administration of its foreign manpower programs over the past several years. Security is the principal basis for Qatar's strict entry and immigration rules and regulations.