BlackRock says the two countries potentially provide emerging market-like opportunities in other ways. “The ratio of market capitalization to GDP remains low in UAE and moderate in Qatar, and is therefore still likely to rise over time as is generally expected of emerging markets.”

In making the case for the two countries, BlackRock says the Middle East has had some of the strongest growth rates in the world since the 2008 financial crisis. In particular, the Qatari economy grew nearly 67 percent between 2008 and 2013, and its world-leading GDP per capita is forecast to double between 2014 and 2025 thanks to World Cup-related infrastructure spending and to falling production costs in petroleum.

BlackRock’s report, which doesn’t provide comparable figures for the UAE, does say that country’s GDP per capita growth hasn’t been as dynamic in recent years because economic expansion has struggled to keep pace with rapid population growth.

That said, International Monetary Fund statistics show the UAE’s real GDP growth last year was a robust 4.8 percent, though that’s expected to decrease to 4.4 percent and 4.2 percent this year and next year, respectively.

Qatar’s real GDP growth last year was 6.1 percent, according to the IMF, which forecasts growth of 5.9 percent this year and 7.1 percent next year.

Both countries remain dependent on the petro economy (even though energy is a small part of both the QAT and UAE funds on a market cap basis), and both are trying to diversify beyond oil and gas production––Qatar through spending on the World Cup, and the UAE by focusing on tourism. 

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