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Crowd at Ezdan Mall

Ezdan Mall/Facebook

Crowd at Ezdan Mall

Qatar’s population increased by another 50,000 people last month, bringing it to another record high and as close to the 2.5 million mark as it will likely get before the New Year.

There were approximately 2.46 million people in Qatar at the end of November, up from 2.41 million a month earlier, according to a preliminary estimate by the Ministry of Development Planning and Statistics.

That’s an increase of roughly 8.5 percent – or more than 193,000 people – since November 2014.

That rate is among the lowest year-over-year increases Qatar has seen in the past 12 months, but still classifies the Gulf nation as one of the fastest-growing countries on the planet.

With preparations for the 2022 World Cup nearly in full swing, government planners are predicting the country’s population growth to slow and eventually peak in early 2017.

Expat turnover

MDPS bases its figures on a simple count of the number of people within the country’s borders at a given time.

Because so many people travel in December and early January, the November figures are likely to be the highest Qatar will see in 2015.

Photo for illustrative purposes only.

Jiseon Shin/Flickr

Photo for illustrative purposes only.

The population estimates only show the net number of new people in Qatar each month.

However, the absolute number of new residents arriving at Hamad International Airport for the first time can actually be much higher.

That’s because many of them are replacing the thousands of expats who leave the country for good each month.

There is considerable turnover within Qatar’s expat population, government data suggests.

The equivalent of more than one out of every 20 Qatar residents canceled their residence permit over the last year, according to details on the number of electronic transactions using the government’s Hukoomi service.

Source: MDPS / Hukoomi.

Peter Kovessy

Source: MDPS / Hukoomi.

While not all these individuals were necessarily replaced, this turnover has significant implications for Qatar’s economy given that employers frequently cite employee recruitment and training as major costs that harm the country’s competitiveness.

The increase in the number of canceled residence permits this year has largely paralleled the country’s overall population growth, but there was a significant year-over-year spike this spring when several major energy companies including Qatar Petroleum laid off thousands of employees.

More layoffs are expected in the coming weeks as RasGas and Maersk Oil reduce their employee headcount.

Exceeding expectations

Because growth forecasts for Qatar were prepared before the country was named host of the 2022 World Cup, the sudden spike in the population caught government planners off guard.

Construction workers eat at the Khalifa Stadium

Peter Kovessy / Doha News

Khalifa Stadium is being renovated to be ready for the 2022 World Cup hosted in Qatar.

They predicted that there would be fewer than 1.9 million people living in Qatar by 2016.

Much of the country’s rapid population growth can be attributed to a massive influx of blue-collar expats who have been hired to construct new highways, rail lines, hotels and stadiums for the football tournament.

However, these projects also require legions of engineers and other skilled workers to move to Qatar. These employees bring their families to the country, and in turn increase the demand for teachers, doctors, retail managers and other professionals.

Outside Doha

The unexpected and rapid increase in the population has placed a considerable burden on Qatar’s road network, creating stiff competition for school spaces among parents and led to a shortage of affordable housing.

To help reduce the strain on services in Doha, government planners have been encouraging residents to live outside of Qatar’s capital.

Authorities have been constructing new homes, schools and cultural attractions, as well as expanding hospitals, to make communities such as Al Wakrah and Al Khor more attractive.

Souq Waqif Al Wakrah

Chantelle D'mello / Doha News

Al Wakrah Souq

Those efforts appear to be paying off. According to new census figures, the country’s population has become more dispersed, with 65 percent of the country’s residents now living in either Doha or Al Rayyan, down from 75 percent in 2010.

Officials at the Ministry of Development Planning and Statistics have previously said they expect Qatar’s population will keep climbing until early 2017 when the most labor-intensive components of the country’s World Cup preparations are completed.

After that, the services of many expats will no longer be required and they’ll be expected to return home, according to Saleh bin Mohammed Al Nabit, Qatar’s minister of development planning and statistics.

“All migrant workers come to the state to (perform) specific tasks and duties. Their contract ends when their duties end,” he said during a lecture at Carnegie Mellon University in Qatar last month.

Thoughts?

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Lesley Walker

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A government minister has hinted that residents’ wallets could take a hit as the country grapples with lower energy prices and faces its first budget deficit in more than a decade.

Speaking at a lecture today, Saleh bin Mohammed Al Nabit, who leads Qatar’s Ministry of Development Planning and Statistics (MDSP), said it is “urgent” for the country to seek new revenue sources such as taxes and better “rationalize” state support programs.

Al Nabit made the remarks at Carnegie Mellon University in Qatar this afternoon, a week after Qatar’s Emir told the country that the state can no longer “provide for everything.”

Dr. Saleh bin Mohammed Al Nabit - Minister of Development Planning and Statistics

Hilalyazbek/Wikicommons

Dr. Saleh bin Mohammed Al Nabit – Minister of Development Planning and Statistics

In his speech, Al Nabit briefly touched on the impact that lower energy prices are having on the country’s finances.

While the government has already cut the budgets of organizations such as Qatar Foundation, Qatar Museums and Al Jazeera, the official’s remarks are the first suggestion that individual residents may also have to shoulder the financial burden:

It has “become urgent…to consider issues such as the rationalization of support and providing it to target groups, development of the tax system and supporting the revenue side of the budget,” he said.

Al Nabit did not suggestion any specific forms of taxation. Individuals in Qatar do not pay any sales or income tax, but foreign firms pay a corporate tax rate of 10 percent, according to consulting firm KMD.

In September, Qatar’s finance minister said there were no plans to reduce the country’s subsidies on food or fuel, which make consumer petrol prices among the cheapest in the world.

The state also sells electricity and water to consumers at below-cost rates and provides these utilities free of charge to Qataris and some expats who work for government companies.

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Muhammad Kamran Qureshi

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However, local utility firm Kahramaa quietly raised prices for electricity and water this fall, a move that has affected both individuals and companies.

Kahramaa operators have confirmed the hikes but not commented on them. Senior officials from the state-back utility declined to discuss the issue with Doha News during last month’s Qatar Power Summit.

IMF: Subsidies inefficient

Al Nabit’s remarks echo suggestions made by the International Monetary Fund (IMF), whose managing director – Christine Lagarde – is coincidently visiting Qatar this week.

The organization has called on countries across the region to rethink their approach to subsidies in recent years.

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Klent Michael Real/Flickr

Photo for illustrative purposes only.

In a 2014 paper, the IMF argued that discounting prices for electricity, fuel and other consumer goods are an inefficient way of sharing a country’s wealth with residents because it disproportionately benefits well-off individuals with large homes and vehicles.

Like Al-Nabi, the IMF says such state support should go to those who need it most.

In the IMF’s case, that means giving cash to poor households. In a variation of this approach, Bahrain has rolled out plans to replace its across-the-board subsidies with cash payments for citizens to incentivize them to conserve power, effectively reducing benefits for expats.

In a separate report published earlier this year, the IMF said GCC governments need to diversify their revenue sources by introducing income or sales taxes to reduce their exposure to volatile energy prices.

Population

Al Nabit used most of his speech to discuss Qatar’s National Development Strategy, a lengthy government planning document published in 2010 that sets dozens of economic, social and environmental targets for 2016.

While there have been some successes, such as the partial rollout of the Seha health insurance scheme, there appear to be few signs of progress in other areas, such as formalizing how police and health care workers respond to cases of child abuse.

Photo for illustrative purposes only.

Sam Agnew/Flickr

Photo for illustrative purposes only.

When asked how many of the strategy’s goals had been achieved, Al Nabit said a final assessment has not been completed.

“There has been a great deal of advancement in the implementation of our objectives,” he said. “Other things have not been achieved.”

Most of the development strategy was prepared before Qatar was named the host of the 2022 World Cup.

This means it did not fully predict the extent of the country’s massive construction boom or the related rapid influx of blue-collar expats that has pushed Qatar’s population to 2.4 million residents, an increase of 40 percent since 2010.

Al Nabit said Qatar’s population would continue to grow in the coming years, but at a slower pace.

He suggested that many construction workers would be returning to their home countries in the coming years as their building and infrastructure projects wrap up.

“All migrant workers come to the state to (perform) specific tasks and duties. Their contract ends when their duties end,” he said.

Thoughts?