Much ink and pixels aplenty have recently been spilled regarding Qatar’s successful World Cup bid. The English media has predictably reacted with outrage that some tiny upstart sheikdom will be hosting a World Cup whereas football won’t be ‘coming home’ in 2018; others have helpfully prepared articles informing the world where exactly the place is and what all the fuss is about.
This is certainly a huge development for Qatar and the Gulf, but winning the bid was just the start of the challenges and there are risks entailed as well as opportunities. The immediately obvious issue is greatly increased scrutiny from the international media, not only of Qatar but the rest of the GCC. Dubai has already learned some painful lessons in this area and has, albeit slowly, taken some steps to improve. Many of the other Gulf countries and cities have managed to stay below the radar but that is going to change: the next 12 years are going to see some determined muckraking going on with regard to everything from political rights and democracy through to ‘carbon footprints’ and conditions for expatriate workers and labourers. There are many people waiting to leap on any difficulties and there are a lot of questions that Qatar needs to answer convincingly. For example, how are they going to deal with the influx of several hundred thousand mainly non-Muslim football fans from around the world? How are they going to deal with the inevitable ‘cultural misunderstandings’ that could ensue? How do they handle the immense security challenges given the relatively small Qatari population? How on earth are they going to live up to their commitment to a ‘carbon-neutral’ World Cup?
On the Dubai Eye Evening show last night there was a brief panel discussion on these potential cultural clashes with reference to Sepp Blatter’s comments on how homosexual visitors should comport themselves in 2022. The panellists predictably stuck to the party line of ‘when in Rome’ and this is a view I would normally have sympathy with; however, it is an argument that is far less convincing when Qatar has actively lobbied so hard to bring the world to their doorstep. You can’t have it all ways – if you want to hold a major global event and essentially invite the world into your country, then the onus lies with Qatar to adapt rather than the rest of the world. If you want to stay culturally, religiously or ideologically ‘pure’ then hosting a World Cup is probably not the path you should be following.
There is no doubt that this is going to affect Qatar’s longer-term economic strategy and development. Some commentators have opined that the vast infrastructure spending will put Doha in a position to replace Dubai as the Gulf’s main metropolis; however, business infrastructure and World Cup infrastructure are not necessarily interchangeable: vast transport investment focused on moving thousands of football fans to stadiums does not necessarily equate to effective transport for more quotidian requirements.
The frenzy of construction over the next decade is likely to make Dubai’s real estate boom look pretty tame. Qatar already had major projects planned and underway but now there is a clear and unavoidable deadline to meet with all the added cost pressure that entails. As someone who experienced the Dubai construction extravaganza, I can say with some confidence that such episodes end up crowding out other economic sectors, distorting cost structures and negatively impacting genuine economic diversification. You simply cannot dump that much money into an economy of that size for construction projects without a spike in business operating costs such as rent and employee compensation. Doha is about to get increasingly expensive at a time when Dubai is actually getting more and more affordable, albeit as part of a painful internal devaluation process. Dubai is in many ways a far nicer place to live right now than it was 3 or 4 years ago: the nightmarish traffic has somewhat dissipated, the ludicrous rents have fallen, and most of the asinine and vulgar real-estate carpet-baggers who moved here en masse have thankfully returned to whatever ooze they crawled out of. Doha, on the other hand, is about to get a nice helping of all this nonsense: there will be a lot of money to be made there of course in certain sectors, but it will not be based on long-term sustainable business in the most part. Construction booms can very quickly prove to be ephemeral, particularly if they end up crowding out the development of other economic sectors.
The other issue is the extent to which Qatar really wants to follow the ‘Dubai’ route. People sometimes wonder why Dubai, with its relatively small oil reserves, was able to become such a significant and cosmopolitan city. My theory is that Dubai actually had just the right amount of oil – enough to help get infrastructure development off the ground without allowing them to get too complacent or comfortable – in combination with a more commercial and outward-looking view of the world due to its historical role as a trading port. The question I often ask about Qatar and Abu Dhabi is whether they really have the stomach for the changes and cultural compromises inherent in following the Dubai path and becoming an international as opposed to an Arab city. With such vast oil wealth there is no certainly no compelling or pressing economic necessity for them to do so, and I therefore wonder whether they will be quite content with focusing on selected glamour projects such as the F1 and Saadiyat Island in Abu Dhabi, and the World Cup in Qatar. I could be completely wrong here of course: by 2025 Dubai could be relegated to a relative backwater in a Gulf centred on a Doha/Abu Dhabi axis; however, I’m still not convinced that this will be the case.
There is another element to all this; given the ‘friendly’ competition between the various GCC countries, would anyone be surprised by a 2020 Olympics bid from Abu Dhabi? Or perhaps even Dubai if they can get their finances in order in time or can form a joint bid with Abu Dhabi? Now that would make things interesting…