Building a legacy beyond 2022: how transport infrastructure drives sustainable growth

​By Dr Abdulaziz A Al-Ghorairi

Senior Vice-President & Group Chief Economist

Head of Asset Management

Commercial Bank

 

June will mark the two-year anniversary of the Brazil 2014 World Cup and while supporters enjoyed the month-long festival of football, the value of the physical infrastructure left behind is viewed as dubious at best. Qatar will happily have a very different experience compared to Brazil, with infrastructure investment driving growth up to the World Cup in 2022, but also beyond the tournament to create a long-lasting legacy for sustainable growth. Under the wise leadership of His Highness Sheikh Tamim bin Hamad Al Thani, Qatar has expertly mastered the value of infrastructure spending as a tool for private sector growth and development. The transport sector is an important component of any national economy but especially so in a globalized world where economic opportunities are increasingly related to the mobility of people, goods and information. Economists are well acquainted with the relationship between the quantity and quality of a nation’s transport infrastructure and the level of economic development, with high density transport infrastructure and highly connected networks being commonly associated with high levels of development.

 

An important difference between Qatar and Brazil is that Qatar’s focus on infrastructure investment does not start and end with the World Cup. Qatar has a long-term development plan under the National Vision 2030 to diversify its economy, with infrastructure spending related to transport, education, healthcare, real estate and hospitality being a key part of this plan. Winning the 2022 World Cup bid meant the commissioning of eight new stadiums to stage the matches, but infrastructure plans unrelated to football were already in place, and the victory brought forward the deadlines on critical infrastructure projects such as the Doha Metro that are required to host the 1 million visitors predicted to come in 2022.

 

Qatar is on track to meet the new deadline of 2022. HE the Finance Minister Ali Sherif Al-Emadi said the government was spending around $500 million a week on capital projects focused on preparations to host the 2022 World Cup, most being related to transport. A total of 90% of World Cup projects have been awarded and are expected to be executed on time, and two-thirds of these projects will be delivered in the next 24 months. HE the Minister of Finance said that around 65% of road projects in Qatar will be completed in 2017 and 2018, and more 50% of railway projects have been completed, including 100% of tunnel-drilling operations and 45% of stations.

 

In total, Qatar will spend nearly $200 billion on infrastructure projects and 2022 World Cup. The result of this incredible rate of spending is that Qatar's economy is predicted to grow 3.4 or 3.5% this year, with much of this growth attributed to the private sector and within that, the construction sector. Critically, this construction boom will not end with the World Cup, and while sports infrastructure projects are progressing on schedule and will be completed by 2020 according to the Supreme Committee for Delivery and Legacy, non-sports infrastructure spending will continue for the next decade. The government is wisely thinking ahead beyond 2022, with an adjusted spending plan and further infrastructure projects to ensure there is no sudden drop in economic stimulus when the football ends. This means that top-down government spending on infrastructure will continue to drive economic development and diversification in the mid-term. Due to the nature of transport infrastructure, we will see the economic benefits for many years to come after the initial government spending to create it. Transport infrastructure is a gift that keeps on giving, augmenting all-round economic growth by connecting Qatar with the rest of the world, and facilitating the ease of moving people, goods and information. With world-class air, sea, rail and road infrastructure in place, transport infrastructure will continue to help diversify Qatar's economy and drive sustainable growth not only now, but also for Qatar’s future generations.