Sheikh Hamad bin Khalifa Al-Thani, Emir of Qatar, arrives to speak during the general debate at the 66th session of the United Nations General Assembly, September 21, 2011. (Photo: Justin Lane / EPA)



When something seems too good to be true, according to an old adage, it usually is. The announcement, Tuesday, by Qatar’s Emir Sheikh Hamad bin Khalifa al-Thani that legislative council elections would be held in 2013 , without a push from protestors on the street, raises the question of what kind of dark skeletons lurk behind the fairytale kingdom façade. The Emir also declared an end to monopolies and the establishment of a free market economy, saying in the opening remarks of a new legislative session, “We know that all these steps are necessary to build the modern State of Qatar and the Qatari citizen who is capable of dealing with the challenges of the time and building the country. We are confident that you would be capable of shouldering the responsibility.”

So where is the dark side? As Shadi Hamid, of the Brookings Doha Center and a fellow at the Saban Center for Middle East Policy writes in the Atlantic, there might not be any. “If you like, call it ‘Qatari exceptionalism,’ ” he says.

If there ever were a country that resembled a fairytale kingdom as imagined by Disney, it would be Qatar: A benevolent monarch and his beautiful queen rule over a peaceful populace, untroubled by the revolutions in neighboring lands even as they support those revolutions financially and through the modern-day equivalent of a magic wand: the government backed satellite news channel al Jazeera. They spend the country’s wealth on the arts and sciences. They have built not one, but seven temples to education in what was once barren desert. The ever-blooming skyline of the capital Doha reflects a 2010 growth rate of 19 percent and the second highest per-capita GDP in the world. Unlike other insta-cities whose crystalline growth effaces cultural identity, thoughtful architecture negotiates the constant preoccupation of the Arab world: how to be modern without losing identity.

The spending doesn’t stop at the borders of this Connecticut-size peninsula jutting into the Persian Gulf. Through the Qatar Foundation, worth untold billions, the Sheikh and his wife Sheikha Moza have used their wealth to fund development programs throughout Asia. They donated $100 million to victims of Hurricane Katrina in the United States, pledged $2 billion to develop Darfur, gave millions more in Yemen and Pakistan, and have rebuilt towns in southern Lebanon devastated by the 2006 war between Israel and Hezbollah. In doing so they are attempting to solve the other conundrum plaguing the oil-rich nations of the Persian Gulf: what to do when the gas runs out. Nobody knows when that day will come, but the Qatari solution involves making friends, increasing influence and preparing the next generation for a life without oil.

Since he overthrew his father in 1995, Al Thani has directed the country’s wealth (Qatar sits on the world’s largest known natural gas field) towards building a knowledge economy grounded in research and innovation. His foreign policy is based on the theory that sustainable peace and progress in the region are in Qatar’s interest. Such a quest appears quixotic, but it underscores a canny approach to diplomatic relevance by a nation sandwiched between giants Saudi Arabia and Iran.

Home to a major U.S. military base and friend to Iran, Qatar focuses on building relations with all players irrespective of regional alliances. It leveraged its perceived neutrality in Darfur, where it was able to solve a conflict that long bedeviled the UN. It has used its influence to calm tribal tensions in Yemen. And Qatar’s success in brokering the 2008 détente between rival Lebanese factions staved off another civil war and won international plaudits. “Subconsciously all this is informed by the survival strategy of a small state,” says Mehran Kamrava, dean of the Georgetown University School of Foreign Service in Qatar. “You make yourself indispensible in the international arena.”

Satellite news channel Al Jazeera, Qatar’s best-known export, is the most visible manifestation of Doha’s desire for recognition. The broadcaster’s signature style—“a voice for the voiceless,” according to managing director Al Anstey—is the most accurate reflection of the Arab street, and has earned Qatar legions of fans, including, most recently, Secretary of State Hillary Clinton, who compared the station favorably to U.S. broadcasters saying it offered “real news.” Al Jazeera’s exhaustive coverage of the revolutions roiling the region has made it must-see TV for most of the Arab world, with millions of viewers internationally. “Al Jazeera is Qatar’s passport to the world,” says Qatari media consultant Hassan Rasheed. “No,” corrects a visiting Lebanese friend, “Al Jazeera is your nuclear missile, aimed at the heart of repressive regimes everywhere.”

In fact, Al Jazeera, which means ‘the peninsula’ in Arabic, is both a calling card and a weapon, one that has put Qatar’s neighbors on edge. Aggressive coverage of human rights abuses in Saudi Arabia brought about a diplomatic freeze in 2002; its reporting on the Egyptian revolution earned Qatar the ire of then President Hosni Mubarak. Libya has banned reporters from its Arabic channel. Al Jazeera’s light coverage of issues in Qatar, or in neighboring Bahrain where Qatari troops are helping quash a popular revolt, has led to accusations that the channel doesn’t always practice the free speech it preaches. Corralling the station’s notoriously independent journalists, rebuts al Thani, would be akin to “herding cats.” Anstey concurs: “We have absolute journalistic independence. Not once have we been asked to do a story in a particular way.” Still, Al Jazeera’s commitment to human rights, self determination and accountable government have put Qatar in the paradoxical position of an absolute dictatorship at the forefront of democratic change.

Al Jazeera’s English language program went a long way towards countering accusations that it wasn’t covering the revolt in Bahrain, a Qatari ally, with the same enthusiasm as Libya when it released an extraordinary documentary, Bahrain: Shouting in The Dark. The Bahrain government placed a formal protest, but as Hugh Eakin pointed out in his piece on Qatar last month in the New York Review of Books:

“Yet unlike Al Jazeera’s Arabic service (which did not show the documentary), Al Jazeera English is not watched by tens of millions of Arab viewers in the Middle East; its audience is predominantly elite, Western, and international—people who do not pose a direct threat to Qatari or regional stability.”

If Al Jazeera is Qatar’s introduction to the world’s newshounds, its investment in culture and sport will bring it to the attention of everyone else. The 2,500-acre Education City, on the outskirts of Doha, houses the Middle East branches of several top-ranked American universities, including Georgetown, Carnegie Mellon and Northwestern. An I.M. Pei-designed museum floats, mirage-like, on an island in the middle of Doha’s harbor. In December, Qatar elbowed aside sporting heavyweights U.S. and U.K. for the right to host the 2022 football world cup, proof, if any were needed, that Qatar is investing for the long term. “Qatar is not a flash in the pan,” says Salmaan Shaikh, director of the Doha-based Brookings Middle East program. “By 2022 pretty much every person on the planet is going to be aware of Qatar. So it really creates a sense that it is a power to be reckoned with in the region.”

The most obvious demonstration of Qatar’s newfound confidence can be found in Libya, where Qatar helped fund, arm and train the rebels that eventually overthrew, and killed, Muammar Qaddafi. Qatar was the first Arab state to recognize Libya’s revolutionary council, joining France and Italy. “Qatar had stood by us from the very beginning, even before it was announced that they were here,” Col. Ahmed Bani, a spokesman for the rebel army, told the Washington Post in May. “They have been more effective than any other nation. They just haven’t boasted about it.”

That interference, while celebrated on the Arab street, is unlikely to be welcomed by leaders of other nations worried about setting precedents. The possibility of repercussions is high. If Libya’s fractious rebel militias fail to lay down arms in advance of democratic elections, Qatar could be saddled with responsibility for a protracted civil war that not only goes against its principal of strategic neutrality, but also erodes its reputation for a golden diplomatic touch. Bold statements have ruffled feathers elsewhere as well. In April the prime minister called for the resignation of Yemeni President Ali Abdullah Saleh, a public appeal that veered substantially away from the more conciliatory approach favored by other members of the Gulf Cooperation Council. In July, Qatar became the first Gulf nation to close its embassy in Damascus, a not-so-subtle denouncement of Syria’s Bashar al Assad’s regime. Qatar might be the champion of regional revolutions, but its bold stance could backfire if declared enemies stay in power long enough to exact revenge.

Of course, it’s easy to embark on such strategies when power is concentrated among a handful of policymakers. “They are benevolent autocrats, there is no other way to put it.” says one Qatari resident, who asked not to be named. Despite constant assurances that freedom of speech is guaranteed in the kingdom, few take the risk. Nevertheless, Qatar is the rare country in the Middle East untouched by flickers of the Arab Spring. The only sign of dissent, a Facebook page calling for a day of protest, appears to have been a ruse. Not a single person appeared at the appointed hour. U.S. President Barak Obama, inadvertently caught on tape following last spring’s meeting with Sheikh al-Thani, explained it best: “There’s no big move towards democracy in Qatar. But you know part of the reason is that the per capita income of Qatar is $145,000 a year. That will dampen a lot of conflict.”

And there are some skeletons. They just aren’t Qatari. Of Qatar’s 1.7 million inhabitants, only 250,000 are citizens. The country’s growth is propelled by an army of imported laborers who work for low salaries under extreme conditions. When the Georgetown campus was completed last year it stood out for its impeccable safety record. It was the first time in recent memory that a laborer had not been killed or gravely injured during construction.

When Qataris do grumble, the complaints center on a preference that the Sheikh spend the country’s fortune on the present instead of planning for the future. “Those that don’t see the relevance of FIFA or Education City to their lives might prefer that the money goes to their pockets instead,” concedes Saif Ali al-Hajari, vice-chair of the Qatar Foundation. “Sometimes people don’t see the wide angle. We can’t just be a consumer of knowledge and technology, we have to produce it as well.”

How much money is being spent on developing Qatar’s knowledge economy is a well-kept secret. One employee working in Education City attempted to do a back of the envelope calculation, tallying up the university costs, investments into a sprawling science center, a state of the art research hospital, an Islamic Studies faculty and a largely foreign staff for the 80 plus projects currently being funded. He eventually gave up.

Such high expenditures in such a short time raise questions about the viability of grafting Western-style drive onto a native population so narcotized by generous state handouts and social welfare programs that citizens won’t work long hours or take jobs they deem below them. One of the most noticeable aspects of the brain trust driving Qatar is how few are Qatari. Only 40 percent of students at the new universities are local. The pace is so headlong, says the employee, that inefficiencies normally pruned in the course of organic growth are allowed to bloom. “It’s like taking 1000 top athletes, wrapping them in a giant rubber band and telling them to run a marathon.”

As fairytales often point out, the problem with benevolent autocrats is that they are not sustainable. Sheikh al-Thani’s approach to that problem, like his solution for a future without natural resources, is to install the basic building blocks of democracy by fiat. He has shown himself to be enough a student of the Arab street that he won’t want to be on the wrong side of history for much longer, says Brooking’s Shaikh, who predicts that Qatar will see parliamentary elections within the coming decade. “The vision of this country is to invest for future generations,” he says. “We won’t really see the finished Qatar until this generation comes of age.” He calls them the World Cup Generation, since 2022 is about when they will start becoming productive citizens. If their debut coincides with an efflorescence of democratic reform, the World Cup will be Qatar’s great coming out party indeed.

Aryn Baker is TIME’s Middle East Bureau Chief, based in Beirut. Find her on Twitter at @arynebaker. You can also continue the discussion on TIME’s Facebook page and on Twitter at @TIMEWorld.