As about Qatar well known country among Gulf countries, depends on a single commodity of resources or we can say rentire state which is totally depends on natural resources as petrochemicals and gas. In the classical views of economics always use the diminishing law of return in production, which shows if production factor one or two are used in production, this will increase production but in decreasing rate. Which means if factors of production are not using equally, this problem may come in production of anything but other things should same as technology etc but somewhere its work still in life. Qatar has an unemployment problem in youth, which could be solved through Government interference in the policies for example: Qatar and other Gulf States are suffering from lack of economic growth of the country. But to solve these problems, the Government sets up a central planning authority which has been called by several names, such as the planning commission, planning ministry or planning board. What goods should be produces, how should they be produces, how should they be distributed among the population and how much should be invested to bring about economic growth are all decided but the central planning authority. This method of solving central problems through the use of economic planning has been adopted in socialist countries. In such economic system, the capital and property are collectively owned by society and work of production is organized by the government. In this system, private entrepreneurs have no right to undertake the work of production and consumers lose their freedom to choose and consume the goods of their choice. Government plays an active role in the solution of the various central problems, regarding production, distribution and investment. Regarding Qatar, this policy works in international market as consumers of Gas is in world–wide. So the government of Qatar control its Gas production as not demand for and supply of Gas but the price will determine its production (as international market will give the price of Gas) Government of Qatar and of Corse other GCC countries could control its economy through the interference of the Government of the country. As the adaptation of proper monetary policy (in which the policies regarding the supply of money, bank credit and the rate of interest are included), fiscal policy (which is concerned with the government expenditure and taxation policies) and direct controls such as industrial licensing policies, control on price, import and exports. The other economic tool could be used in production of a single commodity as LNG in Qatar. Production possibility Curve in economics explains how much production of gas should be optimum level of production. One of the major issues before the oil-rich Gulf States (Qatar) in recent decades has been the diversification of their economies from the oil to non-oil sectors. Their heavy dependence (from 70 to 90%) on the oil revenues has prompted these countries to formulate the policies so that other sources of income from the non-oil sector can be enhanced. But the question is how in these Gulf States have been successful in implementing these policies? Moreover, what are the major drawbacks in the diversification their economies in the present time? In this paper, an attempt has been made to understand the rationale behind the diversification of Arab Gulf economies dominated any single rent revenues. This has been discussed in the framework of their overall macro-economic development, taking into consideration the various factors of productions, so that a desired balanced growth can be maintained. The main focus of the paper is on the current initiatives taken these States towards the building of a non-oil economy. While highlighting the Arab Gulf State's economic diversification drive, the paper, particularly point out the varying degrees of seriousness and success because as this paper concludes, this economic diversification project cannot be conceived without taking into account the impact of fluctuation in oil prices in the global market as well as on the overall economic and political stability in the region.


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