Interview: Sheikh Ahmed bin Jassim bin Mohammed Al Thani
To what extent was the first National Development Strategy (NDS) successful?
SHEIKH AHMED BIN JASSIM BIN MOHAMMED AL THANI: The NDS 2011-16 was the first implementation plan under Qatar National Vision 2030 (QNV 2030), and was used as the practical tool to position Qatar among countries that prioritise sustainability in socio-economic, cultural and environmental development. During this phase Qatar’s government focused primarily on laying the groundwork for economic development in the country.
A variety of soft and hard enablers were established, while a set of regulatory and legislative reforms were also introduced to enhance Qatar’s sustainable development. Since the beginning of this decade several large-scale infrastructure projects have been launched and some are already completed. In parallel to these advancements a series of regulatory measures have been successfully introduced to promote private investment across different sectors, contributing to the achievements of the NDS in enhancing the developmental capabilities of the state.
Since 2016 the government has worked on preparing and applying the second phase of the NDS for 2017-22. Discussions have focused on reviewing the implementation framework of the second NDS phase and revising the overall structure of the strategy and its implementation mechanisms. Preparations have included assigning responsibilities to members of different sectoral working groups, as well as forming and preparing dedicated teams.
How is Qatar mitigating the effects of international issues on its economy?
SHEIKH AHMED: Emerging global issues on both the economic and political fronts are leading to considerable challenges for almost every country around the world. For several reasons, however, Qatar’s situation is fairly positive compared to other nations. Although the last couple of years saw the economy grow at a slower pace, it still exceeded the growth rate of several comparable countries in the region and the world. Furthermore, the outlook will most likely improve, especially in light of efforts and policy reforms designed to build the ground base for economic development through a series of large infrastructure and development projects. These measures are aimed at countering the negative implications of global issues on our growth cycle.
Qatar’s resilient fiscal position has enabled the government to uphold its standing commitment to upgrade the state’s infrastructure capabilities. Its financial strength, along with the support of prudential monetary and fiscal policy, also allowed the government to avoid competing on liquidity or imposing additional strains on the private sector.
Looking ahead the government is considering several accommodative measures to help overcome the repercussions of the challenging external environment. For instance, in response to rising global uncertainty, the Ministry of Economy and Commerce (MEC) is making extensive efforts to move forward with the public-private partnership framework, which intends to enhance the participation of the private sector through a set of risk-sharing and cost-containment arrangements. While such a framework would help in assisting the private sector participate in profitable and less risky projects, it will also help the government to ensure the delivery of high-quality services at a considerably reduced cost.
The government is also giving considerable attention to strengthening bilateral economic and trade relations with several countries and blocs around the world, in order to support export-oriented industries.
What policies will Qatar develop to sustain growth after the 2022 FIFA World Cup?
SHEIKH AHMED: While massive infrastructure and service-oriented projects should help guarantee an outstanding hosting of the upcoming FIFA World Cup, they also serve, to a large extent, the foundation of a wide range of industries and the achievement of the longer-term objectives that fall under the different pillars of the QNV 2030 development plan.
To ensure that all physical assets and other development projects related to the FIFA event are adequately utilised, the MEC is conducting policy-oriented research by engaging in dialogue with different stakeholders to identify service and manufacturing industries that can benefit from the existing and planned physical assets. Being responsible for formulating the economic development pillar of NDS 2017-22, the MEC – in cooperation with various stakeholders – is working on developing a policy framework that will produce the required developmental vehicles that are needed to promote investment in these promising sectors.
The hospitality sector in particular has already started to benefit from the improving infrastructure and motivating regulatory framework, supported by the strategic efforts of the Qatar Tourism Authority. Over the preceding years, the spending of foreign tourists has grown almost ninefold, from QR2.1bn ($576.7m) in 2010 to around QR18.3bn ($5bn) in 2015. Meanwhile, the real output of the hospitality sector, represented by its core activities of accommodation and food services, increased by 80% between 2011 and 2015. The hospitality sector has also received considerable support from other related activities, namely air transportation and domestic trade, driven by the expansion of Qatar Airways. Other related sectors have witnessed notable developments in recent years as well. For instance, domestic trade has expanded significantly, pushing the real output by almost 50% between 2011 and 2015.
Essentially, the recent developments in tourism-related activities, vast investment in upgrading Qatar’s infrastructure and services, and continued regulatory reforms all suggest that the hospitality sector is set to continue expanding over the coming decade, and we are optimistic about its long-term sustainability.
Do you agree that private sector growth will flourish when the state releases control?
SHEIKH AHMED: Well, I think this is to some extent a relevant argument, and it is exactly what the government intends to achieve in its medium- to long-term plans. That said, the government has had to intervene to varying extents in the past in order to develop and protect infant industries. For instance, a decade ago the scale and quality of Qatar’s infrastructure was not adequately developed to the same extent as other countries in the region. Hence, it required the government to provide different sorts of incentives that would ensure the participation of the private sector in infrastructure development and enhance the possibility of its success by providing subsidies, preferential tax, non-tax treatments and protection, in addition to other incentives.
In other activities the scope of government intervention has been even higher, requiring more than just targeted interventions due to the poor financing and operating capabilities of the private sector. This pushed the government to be a principle actor and invest directly in several activities.
Today the public and private sectors are embracing a new developmental model, where the former is supporting the latter instead of replacing it. Parallel to this development the government is narrowing down the scope of policy intervention to enhance the commercialisation of sectors and activities in Qatar. For example, the contribution of the private sector to the total value added in the education and health sectors increased from about 18% and 17% in 2011, to 39% and 28% in 2015, respectively.
I think we will soon see considerable private sector growth, especially in the promising export-led activities, from both commodity and service industries.
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