The past year's global financial market has been a story of continuing doom and gloom. Each day brings another report from somewhere of a business failing outright or one requiring a bailout from one government or another.

The small country of Qatar, however, appears to be bucking this trend -- the overall outlook for the economy is cautiously optimistic and a good level of continued growth has been forecast.

Qatar has one of the most robust economies in the Middle East and one of the highest per capita incomes in the world. It also has one of the fastest growing GDPs, valued at over $80 billion ($110,700 per capita) in 2008. Real GDP growth in 2009 was estimated to exceed 11%, making Qatar's one of the fastest growing economies in the world.

The optimistic outlook for Qatar is primarily based on the huge gas, petrochemical, real estate and infrastructure projects under development. This includes developments like the $20 billion Pearl and $8.7 billion Lusail developments. Qatar has been estimated to have the third-largest natural gas reserve in the world, and Qatar's continued growth is also expected, in part due to the expected doubling in the output of gas reserves this year from nearly 40 million tonnes to 77.5 million tonnes. Two major projects due to begin this year involve liquefied natural gas trains. The projects, estimated to be worth around $160 billion in the next few years, represent an opportunity for the local corporate sector to improve the health of their balance sheets.

The Qatari government authorities are vigorously searching for ways to protect the Qatari economy and financial institutions from the fallout of the global crisis. The Qatari government, through the Qatar Investment Authority, or QIA, committed to a $5.3 billion program to buy 10% to 20% of the share capital of several banks listed on the Doha Stock Market in order to boost confidence and liquidity in the market and to encourage lending. Purchases by the QIA include the listed stock of the Qatar National Bank, Commercial Bank of Qatar QSC, Doha Bank, El Ahly Bank of Qatar, Qatar International Islamic Bank, Masraf Al Rayan, Al Khalij Commercial Bank QSC, Qatar Islamic Bank and First Finance Co. QSC.

The QIA, estimated to be the world's sixth-largest sovereign wealth fund, with a $60 billion fund, said early in 2009 that it would not invest or make acquisitions for the subsequent six months while the world market stabilized. The QIA was due to revisit and revise its strategy to diversify its investments toward agricultural and food assets, including farmland, and to invest in commodities such as gold and minerals. Then, in June 2009, the QIA entered into discussions to acquire a significant percentage ownership in Porsche Automobile Holding SE.

Part of the strategy for the near future for Western investment may be to turn to alternative sources of funding and diversification in order to spread out risk. One alternative option may be Islamic finance. Senior conference directors at the International Quality & Productivity Centre in Qatar believe that the financial crisis has increased the attractiveness of Islamic finance to the world. Basic principles of Islamic law state that it is forbidden to sell what you do not own. Islamic institutions are therefore generally in better health than Western institutions due to the fact that they did not participate in the subprime mortgage business.

Western governments and financial institutions may therefore look to use the deposits in Islamic institutions, but this alternative will not always be a suitable or viable one, and would need to be considered on a case-by-case basis.

Despite the current challenging climate, the Qatari Ministry of Finance and Economy is continuing efforts at allocating resources for Qatari infrastructure projects without delay. A keynote speech by the minister of finance and economy, Yousef Hussain Kamal, confirmed that the emphasis on development in Qatar is to center on insurance, the creation of a business academy and the development of a regulatory and supervisory infrastructure.

The Qatar Financial Centre intends to make Qatar an international hub for insurance and reinsurance. Current insurance activity in the region accounts for less than 1% of worldwide insurance activity and plenty of potential for growth exists. The Qatar Business and Finance Academy has been set up by the Qatar Financial Authority as a center of financial learning and development in order to support and grow Qatar as a dynamic financial center.

The regulatory body of the Doha Stock Market has begun the process of integrating under one umbrella a new, unified financial services regulator operating from the Qatar Financial Centre. The new regulatory body is to oversee all financial activities in the country. The presence of eminent, experienced members on the committee charged with selling up the regulatory framework will significantly enhance the confidence of institutions and investors.

Qatar's healthcare system is also expanding along with the economy, and the shift toward increased private sector involvement in healthcare is clearly under way. This sector received a $2.5 billion budget allocation for 2008-2009. The money is being used to upgrade infrastructure and to raise public health awareness. Qatar also continues to dedicate the financial resources necessary to realize its vision of creating a knowledge-based economy. The expansion of Education City, along with more multinationals considering the Qatar Science and Technology Park (inaugurated in March 2009) as a viable center for research, makes this center an important link between local universities and the growing industrial sector.

Qatar is also committed to promoting sports, fitness and health. Continued economic activity exists in promoting well-known events such as the Qatar Masters and ExxonMobil Tennis Tournament. The government also provides incentives to investors: for example, allowing allocations of land at low rental rates to encourage investors to look into new opportunities in the sporting sector of the economy. New opportunities include Qatar's bid to host the 2022 World Cup. If successful, it would be the first time the event was hosted in the Middle East and the first global sports event hosted in Qatar.

Other notable sporting events for Qatar are the Motor Racing Grand Prix, the Ladies Cycling Tour of Qatar, and the Asian Cup soccer tournament to be held in 2011.

Qatar's vision to grow in politics and business is complemented by its aim to concentrate on business and convention tourism. Although Qatar is a small country, it is preparing to invest $17 billion in tourism, including investment in museums, attractions, hotels and related infrastructure projects to encourage private sector developments. The Qatari government intends to build the capacity and infrastructure necessary to accommodate events and exhibitions of various sizes. The Qatar Tourism & Exhibitions Authority has a remit to focus on premium leisure, business, medical, sports and education tourism.

The immediate intention of the Qatari government appears to be to encourage steady growth and to deal with inflation, which reached 15% in 2008, due in part to heavy government spending and increasing household wealth. It is suggested that inflation concerns could be dealt with, for example, by the Qatari government placing a cap on rent levels and diversifying its base assets.

The Qatari government is also looking to replace its dependence on generating growth through hydrocarbons market investment and, as noted above, it may branch out into investment in agriculture, gold and minerals. Qatar has not exposed itself to the risks associated with subprime loans or associated vehicles. While this means that Qatari banks have not been as seriously affected as Western banks by the financial crisis, Qatari banks must maintain customer confidence and proceed prudently.

The result of the current activities in Qatar, as well as recent statements coming from the Qatari government regarding future development and investment in Qatar, means that investors can be cautiously optimistic. Qatar remains open for business in terms of developing its gas, oil, hydrocarbons, healthcare, education, tourism and hotel trade sectors. Companies that can provide services or invest in these areas will find attractive opportunities and a welcoming business environment in Qatar.

Mark R. Williams is a partner in the corporate and securities group of DLA Piper. He was formerly a managing partner of the firm's Beijing office and recently opened DLA Piper's Doha, Qatar, office. Nikk Bond is a senior legal consultant at the DLA Piper's Doha office.