Industrialisation and Export Diversification in Qatar

Abstract

This study examines the trends and interactions of industrialization and export diversification in Qatar over the period 1991 to 2022, to assess the extent to which industrialization efforts have been accompanied by export diversification in line with Qatar National Vision (QNV) 2030. Industrialization was analyzed using the composite Competitive Industrial Performance (CIP) index that comprises eight sub-components both in aggregated and disaggregated forms. Industrialization fluctuated moderately, while the disaggregated analysis of the sub-components revealed that Qatar’s global contribution to MVA and manufactured exports remains minimal, reflecting limited integration into global production networks. Export diversification on the other hand was manually calculated using the Herfindahl-Hirschman Index (HHI) that shows the level of export concentration, it followed a U-shaped trend; declining during early industrialization and rising again; indicating early diversification followed by re-concentration linked to specialization in few dominant sectors. Further analysis altogether highlighted the dominant structural role of natural resources in driving Qatar’s growth and helped explaining the muted performance of industrialization. The study underscores the need for broader industrial strategies beyond hydrocarbons and stronger alignment between industrialization and export development, and more focus on strengthening the Foreign Direct Investments (FDI).