Qatar benefits as world takes note of Dubai's woes

Qatar's claims to become the pre-eminent financial centre in the Middle East are beginning to look a little more credible.

The latest rankings of Global Financial Centres Index - an examination of the competitiveness of the world's financial centres - haven't been kind to Dubai. The emirate has now slipped four places to 28th - a far cry from its peak ranking in 2007 when it reached the top 20.

Obviously, Dubai is still a developing market and is unlikely to challenge the likes of London and New York (which top the rankings) or even Asian centres like Hong Kong and Singapore (which are quickly gaining ground).

But the worrying thing is that confidence around the fact it even has the potential to grow at a decent rate has waned. For the first time, Dubai has fallen outside of the top five financial centres 'likely to become more significant in the next few years' category.

"Dubai is still facing a tough economic environment and that is going to hold financial services back for the next few years," said one Dubai-based asset manager.

Despite this, Dubai is still ranked as the place to be in the Middle East - largely because of the diversification of its financial sector and its connections to other regions of the world, which obviously also enhances its appeal as a place to work.

But Qatar is an increasingly serious challenger. It's the only Middle East country to actually move up the rankings (albeit by two places to 34th), with respondents from Europe and Asia particularly glowing in their assessment of its potential.

Many on the ground in the Gulf remain sceptical of Qatar's growth prospects, but the QFC has certainly been attempting to bolster its image. It's looking to both gain a bigger slice of the banking pie and expand into asset management and insurance.

Earlier this year, recruiter Kinsey Allen predicted that there would be more than 5,000 new financial services jobs in Doha in 2010.