Interview: Fahad Rashid Al Kaabi,
Which non-oil- and gas-related industries will become more prominent in the coming years?
FAHAD RASHID AL KAABI: Manufacturing activities are divided in two groups, the first of which includes activities with hydrocarbons inputs – such as oil refining, petrochemicals and fertilisers – which account for around 57% of the sector’s total output. While this segment’s contribution has been steadily declining in recent years, it is expected to increase in 2022 after Qatar Energy’s announcement that it would expand liquefied natural gas production from the current 77m tonnes per year to 126m tonnes by 2027. The second involves non-hydrocarbons inputs such as the food and beverage industry and building materials.
Manufacturing is expected to drive 60% of growth through export- and innovation-driven diversified segments, including engineered materials such as plastics and aluminium, as well as pharmaceuticals and food products. A further 25% of growth is expected from optimisation in subsectors including fertilisers, petroleum products, steel and other metal products, and non-metallic minerals like cement. Innovation-intensive manufacturing activities are expected to grow from 5.1% of manufacturing GDP in 2016 to 15% in 2030. The IMF’s April 2022 “World Economic Outlook” database forecast that Qatar’s GDP at current prices would reach QR866.4bn ($237.8bn) in 2025, after contracting by 18% in 2020 due to the Covid-19 pandemic’s economic impact. The economy grew by 1.5% in 2021 and is set to see expansion of 3.4% in 2022. Meanwhile, the manufacturing sector’s share of GDP is expected to rise from 7.8% in 2019 to 9.4% in 2025.
What has been done to support small and medium-sized enterprises (SMEs)?
AL KAABI: Qatar has undergone an economic boom in all sectors. This was accompanied by a horizontal and vertical expansion in the use of IT and the automation of production process, affecting all levels of daily life. This growth benefitted from the provision of appropriate institutional infrastructure, as well as improvements in the business environment, which together helped to encourage the private sector to invest in utilities to meet burgeoning development needs. To this end, the government has taken legislative, legal and administrative measures to improve the business environment in manufacturing, and has provided financial and in-kind incentives that broadened the country’s productive base.
Qatar has created the necessary environment for SMEs to thrive by enacting pro-investment laws and administrative procedures, and launching initiatives that support business owners. There are organisations that support SMEs by promoting entrepreneurship among locals, and by empowering start-ups that help SMEs go beyond the early entrepreneurial stages towards long-term sustainability. The government has also promoted Made in Qatar products and services, helping them compete in regional and global markets. Additional support is provided by banks, education providers and business associations.
How can Qatar encourage the development of locally owned businesses across a range of sectors while attracting foreign investment?
AL KAABI: Qatar continues to improve its investment environment, as evidenced by the launch of e-government, legal and e-commerce portals; the restructuring of ministries and agencies involved in trade and investment; and the revision of legislation on foreign direct investment, intellectual property rights, anti-money-laundering and incentive schemes. Today the country allows up to 100% foreign ownership in almost all sectors, up from around half before the implementation of the current legal framework in 2019. In addition, a 2020 law on public-private partnerships boosted private sector participation in the economy, as well as encouraged competition.
Read More from OBG
