The Qatari stock market sank 1.1% on Monday, underperforming the region, after a British newspaper published what it said was evidence of corruption in Qatar’s successful bid to host the World Cup. Qatar and tournament organizers denied the allegations.
Plans to spend billions of dollars on building stadiums could be scrapped if the allegations eventually lead to a reversal of FIFA’s decision to award the World Cup to Qatar, which has a population of 2.1 million and no reason to build the venues solely for its own population.
Construction of related infrastructure, including road and rail links, could be slowed or put on hold, and real estate firms might suspend hotel projects involving thousands of rooms. Qatar would also lose the boost to tourism spending that it can expect during and after the tournament.
But the world’s top liquefied natural gas exporter is wealthy enough to handle such economic dislocation without long-term damage, and some analysts think it could even benefit from a slower pace of development.
“Not all of the planned infrastructure projects are World Cup-related – many are essential transport and logistics projects that would be needed even if there was no World Cup in Qatar,” said Khatija Haque, head of regional research at Emirates NBD, Dubai’s biggest bank.
“However, without the event providing a fixed deadline for delivery, some of these projects may be delayed or scaled down. This would have a negative impact on non-oil growth projections over the next few years, but could be positive for the budget.”