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Qatar: apathy, hubris and international recruitment

In the Middle East, countries are telling similar stories of oil-induced economic distress which could affect sovereign funding for international education as well as the coffers of individual families. Will Qatar be the next to stumble? Michael Deere reports.
May 13 2016
6 Min Read

Qatar is famous across the globe for being one of the wealthiest and most lavish countries in existence. It’s oil rich, it spends millions on infrastructure and it pays hefty salaries to expats willing to brave its 40 degree temperatures. But with its economy in dire circumstances, is it possible that international education will take a hit just like in Saudi Arabia? The answer is: possibly, but not many seem to be aware of it.

Comparing Saudi and Qatar may not seem like a giant leap to some but anyone with a grasp of Middle Eastern culture will know they are worlds apart. Saudi is strict and unwaveringly traditional. Qatar is modern, outward looking and it owns a good chunk of London, a western world capital. There is, however, one unalienable similarity and that is that both countries have an absolute reliance on oil.

Both nations have amassed fortunes and stature from trading black gold. They have positioned themselves as the oil suppliers of the world, and as such their economies, their governments, livelihoods and education are based on the value of each barrel, which we all know hasn’t been a solid bet recently.

Austerity measures across the board suggest that the once lavish Qatar is having to start searching for pennies between the cushions. Their budget cuts have been extensive. They’ve made cuts to culture projects, major developments, transport links, the World Cup 2022 and education budgets. It’s likely only to be a matter of time before the effects are felt by the international education sector, just like what we’ve seen in Saudi.

In 2014, Qatar posted its first budget deficit in 15 years and next year’s deficit expected to be in the region of $13billion

There is denial that any budgetary changes are because of economic woes but the thin veil is slowly falling. In a public address the Ruler of Qatar, Tamim bin Hamad Al Thani, clearly warned against current spending practices which he described as “wasteful” because of “overstaffing and lack of accountability”. However, it is much more likely that this focus on reductions wouldn’t be so pressing if the oil crisis wasn’t a crisis.

Just like in Saudi, Qatar’s house of cards is glued together with petroleum, and it doesn’t take much to work out that small profit margins per barrel over a sustained period is going to mean they need a Plan B. In 2014, Qatar posted its first budget deficit in 15 years and since then it hasn’t much improved its lot with next year’s deficit expected to be in the region of $13billion.

Over the past few years we have also seen major employers in the country including Qatar Petroleum lay-off thousands of employees. And significant reductions elsewhere have seen major scale-backs in the education sector, the entertainment sector, the cultural sector and even the state-funded news outlet Al-Jazeera.

As seen in Saudi, it is also rumoured that some of the major state-run firms will also be floated for international investment, and government debt will be sold on the international market– a move Qatar has sought to avoid in the past. But, with major companies like Qatar Petroleum still under complete state control, opening shares up to the international market could secure a much needed injection of cash.

The question for all of us in international education lies in what effect low oil prices will have on Qatari students studying abroad

Oil prices are still at a record low with little sign of improvement. In fact a recent crisis meeting of oil trading countries and organisations saw no agreement reached with the focus mainly resting on the tension between Iran and Saudi who, because of deep historic tensions, have little regard for the prosperity of each other’s economy.

Of course the question for all of us in international education lies in what effect this will have on Qatari students studying abroad. For now there’s little more we can do than make some educated predictions, and sadly, they’re not looking too positive.

Much like what has happened in Saudi, with ever-tightening purse strings, it is likely that Qatar’s state sponsorship will fall and that even wealthy families, who fund studies out of their own pocket, will eventually start feeling the pinch.

Unlike Saudi, the balance of state sponsorship and privately funded education is relatively even in Qatar, but the government relies on its oil income and so do families in a much more direct way due to personal family investment in industry, reliance on state employment and the small size of the population.

Many students are funded by the Qatar Foundation or Qatar Petroleum, and the latter in particular has been making significant budgetary reductions. And the numbers from Qatar aren’t insignificant. Last year over 5,000 Qataris studied abroad, with the majority of these students choosing the UK or the USA as a study destination.

Most students study undergraduate engineering or science-based courses, fitting for the industry they’ll return to. This number doesn’t come close to the mammoth cohort Saudi sends each year, which goes into the hundreds of thousands, but any reduction would still be a hit in the Middle East where other countries are now too often telling similar stories of oil-induced economic distress.

Unless the situation improves only the super-rich and scholarship students, who are deemed absolutely vital to major industry, will have access to international education

The small size of the country means that any significant change is likely to make a larger impact on the economy, and even if government and society as a whole don’t realise it yet, unless the situation improves, investments could soon take a hit and only the super-rich and scholarship students, who are deemed absolutely vital to major industry, will have access to international education.

Currently there seems to be little reported impact on student interest to study overseas. One major pathway provider in the region reported offers being only fractionally lower than the previous year, with the amount of deposits paid actually higher. A source from the company said, “currently it’s not looking bad at all. We’ve invested a lot of time and effort in the region and, like last year, it’s paying off.”

When asked for their view on a possible comparison between Qatar and Saudi, the source accepted that there had been “some probing questions raised in meetings”.

They said, “currently offers are strong but we’re well aware of what happened in Saudi. It’s not unusual for market significance to fluctuate.

“Considering the similarities, it wouldn’t be surprising if what’s happening in Saudi happens to somewhere that’s pretty identical in terms of economy.”

A number of education agencies have also been investing time and effort in the region, with one of the most successful opening up an entirely new office in Qatar.

Qobolak, which recently rebranded from Alqhtani, now has a number of staff in Qatar, who no doubt hope to up the ante on previous recruitment successes. Historically, the agency has performed well across the Middle East, and such investment from this major global player would suggest that their market research doesn’t point to such a gloomy outlook.

“Currently offers are strong but we’re well aware of what happened in Saudi”

A smaller agent in the region, who also works across the Middle East, is however concerned about the future of the market. They wished to remain anonymous but highlighted their fears that the reliance on oil could in a few years’ time spell the end of “the middle classes being able to afford foreign fees”.

The agent said, “Recruitment in Qatar is strong but it doesn’t mean things won’t change. It may take a while for the effects of the oil prices to have a knock on effect but the chances are, eventually people will have to be more cautious”.

There are clearly some rumblings in the market and the lack of attention they are drawing point to one of two things; either there is strong confidence that like every time before, the government will hold stable and pull a fix-all rabbit out of its hat, or people just aren’t looking that far forward or that far deeply into the economic ramifications.

It’s true that it’s still too early to tell for certain the extent of the impact the change in oil prices will have, just as it is too soon to fully assess the effects similar changes have had in Saudi. But, it’s certain that unless Qatar, Saudi and other GCC countries drastically change the foundations of their economies then we will certainly experience some turbulent times ahead.

For a country that has enjoyed such wealth over a long period of time, coming to terms with any differing reality may be a significant shock. However, apathy or hubris towards the very real budgetary problems it faces could spell trouble for everyone involved in international education.

It is unlikely to take long for problems at the top to trickle-down, and when they do the high costs associated with studying abroad will no doubt be scrutinised. This grand and ambitious nation could very quickly be pushed down the league table of prosperity.

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