The Attractiveness of Qatar to Foreign Direct Investment, 1980-2002

The objective of this paper is to examine the factors that determine the inflow of foreign direct investment to Qatar and the attractiveness of the country to foreign direct investment i.e., identifying the role of major macroeconomic variables that determine FDI, namely; Gross Domestic Product, exports, government spending and the degree of openness. It also aims at evaluating the dynamic behavior of the proposed variables. The importance of this paper stems from the fact that Qatar is undertaking the process of privatization, joining the WTO and planning on attaining a sustainable economic growth to maximize the benefits to its people and solving the potentially challenging problem unemployment. Test results show that foreign direct investment in the short-run is affected mainly by government spending and gross domestic product.