Qatar - Economic sectors
Qatar's economic sectors reflect the small size of the country. Qatar relies heavily on the oil sector, exporting some 650,000 barrels a day, mostly to Europe and eastern Asia. The services sector is the country's second-largest economic sector and most important non-oil sector. According to the CIA World Factbook for 2001, the sector's contribution to GDP reached 50 percent in 1996. The industrial sector is also an important contributor to the economy, accounting for 49 percent of GDP in 1996. This sector is dominated by the oil industry, which accounts for a little over 40 percent of GDP. The non-oil manufacturing sector, on the other hand, accounts for only 8.8 percent, according to the EIU. Agriculture is an insignificant contributor to the economy, accounting for roughly 1 percent of GDP.
One of the greatest problems facing all of Qatar's economic sectors is the dependence on oil revenue and the adverse impact of the fluctuation of oil prices on the country's investment climate and fiscal deficit. Lower oil prices generally mean lower revenue for the government. Reduced government revenues in turn translate into lower government spending on economic projects, a situation that brings about an overall slowdown in the economy.
Recognizing these obstacles, Qatar has moved to diversify its sources of income by developing its liquefied natural gas (LNG) industry and expanding its industrial base. Qatar's efforts to diversify its economic base have not been very successful. Most economic activity continues to be centered on oil. Qatar has 2 natural gas plants that have been in existence since 1980. With the help of international oil companies, Qatar launched 2 LNG projects in 1992, the North Field development at Ras Laffan