Interview: Sheikh Mohammed bin Hamad bin Qassim Al Thani
How can Qatar accelerate its transition to a diversified, knowledge-based economy, and what role will foreign direct investment (FDI) play?
SHEIKH MOHAMMED BIN HAMAD BIN QASSIM AL THANI: Qatar is moving towards a knowledge-based and more flexible economic model focused on sustainability in line with Qatar National Vision 2030. Achieving a quick recovery from the Covid-19 pandemic and restoring growth rates in a sustainable manner are priorities in order to establish a strong and resilient economic future.
Qatar has adopted significant measures to attract FDI – a vital part of its diversified future – and the country has developed into a very competitive regional and global investment destination. Recent reforms include the launch of a single window for entrepreneurs and investors; the creation of the Investment Promotion Agency; the establishment of the Qatar Free Zones Authority; and a legal amendment to allow 100% foreign business ownership.
In this sense, foreign companies can benefit from investment opportunities in areas identified in the second National Development Strategy (NDS) for 2018-22 and contribute to Qatar’s growth in non-oil sectors, which already accounted for 63.2% of GDP in 2021. The NDS defined programmes to accelerate economic diversification in Qatar. These included enhancing the competitiveness of Qatari exports based on infrastructure and logistics services; activating regional and international networks with the aim of establishing more competitive and expansive supply chains; and concluding international and regional trade agreements that support the country’s position in key markets.
Private sector companies can achieve significant returns and expand into the region’s markets, capitalising on Qatar’s advanced infrastructure. In this regard, the country has established links with global markets through infrastructure developments such as Hamad International Airport, Hamad Port, various free zones, and other logistics- and industry-focused areas. This constitutes an important incentive for local and foreign companies to invest in non-oil sectors and engage with the domestic market, while expanding into new markets abroad.
To what extent are the Foreign Investment Law, Public-Private Partnership (PPP) Law and other reforms likely to result in FDI after the pandemic?
AL THANI: Qatar has recently implemented and reformed legislation to attract additional foreign investment. This includes more benefits for foreign investors and giving private sector companies opportunities to participate in the development of major national projects, in addition to partnering on wider economic initiatives. Qatar also offers various tax and Customs exemptions, as well as facilitating investment procedures through the single window platform. Foreign investors can also now own real estate in multiple areas.
The new law regulating PPPs aims to increase the efficiency and sustainability of infrastructure projects and government services, rationalise public budget expenditures and achieve optimal resource investment. The Ministry of Commerce and Industry has worked to assess private sector participation in major projects to gauge competitive capabilities. It has also ensured the implementation of the PPP Law in all relevant projects, especially regarding hospitals, schools and tourist resorts. As a result, several projects were announced within the PPP framework shortly after the law passed.
Qatar has reaffirmed its policy of maintaining an open business environment linked to global markets and built on strong international partnerships. These recent positive changes represent an incentive for companies to invest in the local market, particularly the industrial, technological and logistical fields, which will serve to further strengthen the economy.
What are the most significant strategies being devised to ensure sustainable growth after the country hosts the 2022 FIFA World Cup?
AL THANI: The NDS for 2018-22 pays considerable attention to national economic diversification and the goals laid out by Qatar National Vision 2030 to transform the country into a sustainably developed knowledge economy. The projects implemented within the framework of organising and hosting the 2022 FIFA World Cup support the country’s progress towards strategic development goals. The legislative reforms related to foreign investment further encourage private sector and foreign participation in vital sectors such as tourism, health and industry, which spur economic growth and positively affect other areas. The tournament itself also represents an opportunity to showcase the country’s activities and prospects to the world in order to capture future investment inflows.
Which achievements has the country made in enhancing the manufacturing sector’s contribution to GDP and in diversifying the economy?
AL THANI: The Manufacturing Strategy 2018-22 represents a roadmap for the industry in line with Qatar National Vision 2030. In parallel, the Ministry of Commerce and Industry has worked to develop procedures and facilitate the process for setting up companies and industrial establishments through the Single Window Services on the ministry’s website. By launching an investment fund for manufacturing and encouraging the availability of alternative financing mechanisms, the aim is to stimulate foreign investment in strategic manufacturing areas. Other initiatives include a portal for investors active in manufacturing; a programme to attract major international investors by simplifying their journey in the industrial sector; expanding international trade agreements; and devising a master plan to support talent and entrepreneurs specialised in manufacturing over a 10-year period.
The industrial sector is expected to grow as a result of these initiatives. The contribution of manufacturing to GDP increased to 8.7% during the first six months of 2021, compared to 7.3% during the same period of 2020. During the second quarter of 2021 the sector’s contribution to the economy amounted to about QR14bn ($3,8bn), making it the fourth-largest economic sector in the country. The total investment of operating manufacturing factories has exceeded QR250bn ($68.6bn), and about 70% of that was directed towards the petrochemicals, iron and aluminium industries.
How would you summarise the government’s goals for a broad recovery from the pandemic?
AL THANI: The overarching aim is to maintain efforts to diversify sources of income and increase the real added value from priority sectors, especially non-oil sectors. Another priority is to promote Qatar as an attractive investment destination by providing additional incentives. Moreover, the country aims to develop the business environment in a way that enhances the participation of the private sector to achieve national economic development. Work is also being done to strengthen our position as one of the top locations for customer service and ease of doing business, while encouraging a competitive environment for market players and supporting national products.
Some of the key objectives for 2022 include positioning Qatar as a leader in intellectual property rights protection and devising policies to support the industrial sector’s contribution to GDP and boost related exports. The ministry also supports the country in its self-sufficiency drive of certain goods, and provides an environment that ensures safe competition and protected consumer interests.
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