Interview: Ali bin Ahmed Al Kuwari
How do you view the role of the government versus that of the private sector in driving growth?
ALI BIN AHMED AL KUWARI: Over the past few years Qatar’s government has gradually narrowed the scope of its intervention while enhancing the participation of the private sector in the delivery of high-quality services. Qatar is developing a holistic public-private partnership (PPP) framework. We are also in the process of drafting a PPP law in line with international best practices. This will help the private sector to participate in profitable projects while ensuring their delivery at a considerably reduced cost to the government through a set of risk-sharing and cost-containment arrangements.
Within this framework, the Ministry of Commerce and Industry has formed a governance and support mechanism that encourages PPPs and facilitates the involvement of the private sector in various infrastructure projects. Several initiatives which are designed to attract investments in essential projects have already been implemented. These are expected to attract billions in direct investments, in the process turning Qatar into a regional centre for logistics services and encouraging the private sector to participate effectively in industrial activities.
Along similar lines, the Ministry of Commerce and Industry is also spearheading the development of manufacturing-related government policies and the promotion of national industries through the development and expansion of industrial zones.
To what extent is the government’s focus on strengthening trade relations and bilateral ties impacting local industry and inbound investment?
AL KUWARI: Over the past few years, Qatar has sought to cement its position as an open economy, expand its international trade and investment relations, and conclude bilateral agreements with numerous strategic partners around the world. To this end, Qatar has inaugurated Hamad Port, which can accommodate up to 7.5m containers annually, and fast-tracked the development of Hamad International Airport. Currently, Hamad Port, which accounts for 27% of regional trade, is playing a key role in connecting Qatar to major commercial centres across the world, including Pakistan, Kuwait, Iraq, Iran, Oman, Turkey, India, Azerbaijan and other countries in Central Asia.
Meanwhile, Hamad International Airport, one of the largest regional airports with a projected annual capacity of 50m visitors, provides passenger and cargo movement to more than 160 destinations via Qatar Airways. Qatar also expanded its international trade and investment relations by concluding bilateral agreements with strategic partners around the globe. For instance, Qatar and Turkey have recently signed several trade and cooperation agreements. This cooperation aims to create a strategic economic partnership that will give access to new markets. Another memorandum of understanding was signed between Qatar, Iran and Turkey on the facilitation of international transport and transit traffic to support and strengthen economic and trade cooperation.
Qatar has also inked an agreement with the government of the UK, according to which the UK commits to finance £4.5bn worth of investment projects in Qatar. This is a reflection of the confidence in the strength and resilience of the Qatari economy.
How will regulations allowing for full foreign ownership in most economic sectors improve Qatar’s competitiveness as a destination for investment?
AL KUWARI: The government has enacted laws and regulations that have contributed to the promotion of an attractive investment environment to host various innovative and technology-driven economic and commercial projects. These laws offer foreign investors the opportunity to implement and own up to 100% of investment projects in various sectors. Qatar has introduced major amendments to a range of existing legislation, including its law on investment free zones. The law provides many advantages and incentives for investors, particularly in terms of easing restrictions on foreign capital and the freedom to choose the legal entity of a project, as well as exempting capital assets, exports and imports from taxes and fees.
Qatar has issued a law regulating the investment of non-Qatari capital in economic activity, which allows up to 100% foreign investment in all economic and trade activities. The law will increase the flow of foreign capital and bolster the level of confidence and investment security in Qatar, in addition to protecting local and foreign investors from the risks of side agreements, and advancing Qatar’s ranking on various global economic indicators.
Taken together, these laws will attract foreign investors and encourage them to invest in non-oil and gas sectors, particularly the fields of food security, sports, education, health and tourism, among others. These investments are expected to enable Qatar to sustain significant growth, driven by an increase in the contribution of the non-oil and gas sector, which accounted for about 52% of nominal GDP in 2017.
How has volatility in oil and gas prices affected the government’s spending priorities and overall long-term growth strategy?
AL KUWARI: The fluctuations in oil and gas prices have not significantly affected our country’s economic priorities and strategies. Qatar has been implementing legislative and regulatory reforms to bolster the competitiveness of its business environment, with the aim of becoming far less reliant on mineral resources and coping with global challenges.
The state has made significant progress in implementing major development projects aimed at realising the Qatar National Vision 2030. It has also successfully implemented several projects related to the 2022 FIFA World Cup, thanks to an increase in public expenditure to support the construction sector, which has helped cement Qatar’s position among the leading economies in the region and the fastest-growing economies around the world. The 2018 budget boosts expenditure on major projects and confirms the direction of the state towards the completion of major projects in the main sectors, including those related to the 2022 FIFA World Cup. The World Bank predicts Qatar’s real GDP will grow by 2.7% in 2019 and 3% in 2020, as we seek to further promote foreign investments.
To what extent has the blockade imposed on Qatar affected its economic performance?
AL KUWARI: Since the illegal blockade was imposed in June 2017, Qatar has managed to weather the crisis and ensure that day-to-day life and business continue as normal, with the establishment of direct commercial routes to and from a number of strategic hubs around the world. Thanks to its leadership, Qatar has emerged stronger and more economically independent than it ever had been before.
Qatar’s foreign trade also showed remarkable growth over the course of 2017. The total foreign trade volume increased by 16% in 2017, reaching $103bn, as compared with $89bn in 2016. Meanwhile, Qatar’s total exports increased by 18% to reach $67bn in 2017, up from $57bn in 2016, which led to a 49.9% increase in the trade surplus, up from $25.2bn in 2016 to an estimated $37.8bn in 2017.
Taken together, all these positive indicators are indicative of the fact that we have overcome the challenges posed by the blockade and, as a result, cemented the country’s position as a highly attractive destination for foreign investments. Qatar is also seeking to bolster food security and ensure self-sufficiency in terms of vegetable, fish, livestock and dairy production. To achieve this it is encouraging the private sector to invest in agricultural and farming projects.
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