The Report: Qatar 2015
Hydrocarbons revenues, specifically from liquefied natural gas, still form the bulk of Qatar’s national income. However, as the country moves forward with Qatar National Vision 2030 (QNV 2030), the government is increasingly seeking to diversify the economy away from hydrocarbons while investing in renewable solutions to meet the energy demands of the future.
Qatar’s rapid economic growth over the past decade has thrust the country of 2.22m onto the world stage, and it is now one of the world’s richest on a per capita level. While Qatar’s huge natural gas resources represent the driving force behind its fast-growing economy, the country’s long-term development plan, Qatar National Vision 2030, envisions a diversification away from hydrocarbons in the future. Leading the way in this regard is the construction sector as the government pushes ahead with its vast infrastructure investment programme in the run up to the 2022 FIFA World Cup.
This chapter contains a viewpoint from Sheikh Tamim bin Hamad Al Thani, Emir of Qatar; and interviews with Sheikh Abdullah bin Nasser bin Khalifa Al Thani, Prime Minister and Minister of Interior; Khalid bin Mohammed Al Attiyah, Minister of Foreign Affairs; and Sheikha Hind bint Hamad Al Thani, Vice-Chairperson, Qatar Foundation; and Vice-Chairperson, Supreme Education Council.Explore chapter
The Qatari economy boasts a decade-long track record of extremely strong expansion, with the state’s GDP per capita having risen to become one of the highest in the world. While Qatar is the world’s highest exporter of liquefied natural gas, and the country’s income remains largely dependent on hydrocarbons activity, Qatar has, in recent times, pursued a vigorous plan of economic diversification in line with Qatar National Vision 2030. Leading non-hydrocarbons growth are the finance and construction sectors. The banking sector’s macro-indicators are favourable, with sound capital and strong liquid assets, which will allow banks to capitalise on the state’s construction drive. Meanwhile, and as a result of the state’s infrastructure investment programme, the construction sector expanded by 22% year-on-year between Q2 2013 and Q2 2014.
This chapter contains interviews with Sheikh Ahmed bin Jassim bin Mohamed Al Thani, Minister of Economy and Commerce; Abdullah Saleh Mubarak Al Khulaifi, Minister of Labour and Social Affairs; Eisa bin Saad Al Naimi, Minister of Administrative Development; Hassan Al Thawadi, Secretary-General, Supreme Committee for Delivery & Legacy; and Abdulaziz bin Nasser Al Khalifa, CEO, Qatar Development Bank.Explore chapter
Trade & Investment
Qatar’s healthy trade surpluses, expanding international investment portfolio, and growing bilateral relations in Asia and Europe have driven the state’s trade and investment growth in recent years. Amendments to the Investment Law of 2000 in 2004, 2009 and 2014 have opened up investment opportunities by enabling foreigners to participate in financial services, hold stakes of 49% in listed companies and up to 100% of businesses in some sectors. Meanwhile, in a bid to attract investment and develop local talent, Qatar is launching three special economic zones to serve as the base of a homegrown private sector. This chapter contains interviews with Shashank Srivastava, CEO, Qatar Financial Centre Authority; and Lim Hng Kiang, Singaporean Minister for Trade & Industry.Explore chapter
An increasingly competitive banking environment has encouraged lenders to seek out revenues in previously underserved sectors. Personal lending, for example, has become more important to the sector: in 2010 it accounted for 19.3% of aggregate bank lending, but by 2013 the segment’s share had grown to 23.6% of the credit mix. Meanwhile, lenders have begun to adopt SME-friendly measures such as dedicated branches and products. This segment of the market is expected to assume a more prominent position within the overall credit mix in coming years. As of January 2015 there were 18 licensed banks operating in Qatar’s banking sector, four of which operate in the sharia-compliant segment. Another 20 banks operate from the Qatar Financial Centre.
This chapter contains interviews with Sheikh Abdulla bin Saoud Al Thani, Governor, Qatar Central Bank; Ali Ahmed Al Kuwari, Group CEO, QNB; and Abdulla Saleh Al Raisi, CEO, The Commercial Bank of Qatar.Explore chapter
The Qatar Stock Exchange (QSE) was upgraded to emerging market status in the summer of 2014 and its 18.36% gain for the year ensured the QSE’s performance was the fastest-growing exchange in the region that year. Recent regulatory reforms should ensure the QSE can successfully capitalise on its new status and attract increased foreign investment. In May 2014 the ceiling for foreign ownership of listed firms was raised from 29% to 49%, and the Qatar Financial Markets Authority (QFMA) has taken steps over the past year to improve the deal-making opportunities between the exchange’s listed companies. The recent regulatory changes have also sought to strike a balance between enhancing the integrity of the market and boosting its liquidity as the QFMA looks to ensure a well-regulated market capable of attracting sustained investment.
This chapter contains an interview with Rashid Al Mansoori, CEO, Qatar Stock Exchange.Explore chapter
Islamic Financial Services
Qatar has been a prominent player in the region’s Islamic banking sector since the early 1980s, and Islamic banking accounted for roughly 26% of the country’s total banking assets as of March 2015, with growth in the first nine months of 2014 outstripping that of Qatar’s largest banks. Meanwhile, the country was the region’s third-largest issuer of sukuk in both 2013 and 2014, while 6.2% of global sukuk issuance in the first half of 2014 used the Qatari riyal, behind only the Malaysian ringgit, US dollar and Saudi riyal. Elsewhere, the new Islamic stock index, the Al Rayan Islamic Index, offers traders the opportunity to steer capital into a subset of sharia-screened companies with strong fundamentals.
This chapter contains an interview with Bassel Gamal, Group CEO, Qatar Islamic Bank.Explore chapter
Insurers in Qatar once again showed strong financial performance in 2014, and with the supply of large projects generated by the nation’s hosting of the 2022 FIFA World Cup, the industry is well positioned to make further gains. In the meantime, a process of reform that aims to streamline the regulatory regime continues apace, with the 2012 Regulation of Financial Institutions Law establishing the Qatar Central Bank as the regulator for the entire financial services industry, including banks, financial services firms, insurers and the stock exchange. Elsewhere, the ongoing implementation of a new health insurance scheme for nationals and expatriates marks another important milestone that is likely to impact premium growth in the sector going forward.
This chapter contains an interview with Ali Saleh Al Fadala, Senior Deputy Group President and CEO, Qatar Insurance Group.Explore chapter
Home to the world’s largest non-associated natural gas field and significant oil reserves, Qatar is a leading player in the global energy market. It is also at the forefront of the international gas-to-liquids and liquefied natural gas industries, as well as fast becoming a major centre for research and development in hydrocarbons. The industry does face challenges, however. Among these are the steep decline in oil prices that began in 2014; increasing demand for energy from domestic sources as Qatar develops rapidly; and the management of a new wave of investment in existing fields. Nonetheless, with the sector operating on such an epic scale – Qatar’s gas reserves alone could last well into the 22nd century at 2012 levels of production – and the commitment of international and local giants to its continued development, such challenges seem unlikely to alter Qatar’s leading role in the hydrocarbons industry.
This chapter contains interviews with Sheikh Khalid bin Khalifa Al Thani, CEO, Qatargas; and Hamad Rashid Al Mohannadi, CEO, RasGas.Explore chapter
A rapidly expanding economy and growing population mean that demand for power and water from both industry and households in Qatar has never been greater. This trend is set to continue for some time to come, with an ambitious multibillion-dollar programme of infrastructure building in the lead-up to the 2022 FIFA World Cup, requiring more people, more electricity and more water. At the same time, new demands for cleaner, more efficient and sustainable systems are making an impact, with implications for design and cost. However, Qatar has some major advantages when it comes to overcoming these challenges. An abundant supply of natural gas connected to a modern processing system is one, while the country’s financial reserves are another. There is a continuing, planned commitment by the authorities and many international partners to make this dramatic expansion happen as seamlessly as possible.
This chapter contains interviews with Ahmed bin Amer bin Mohammed Al Humaidi, Minister of Environment; and Essa bin Hilal Al Kuwari, President, KAHRAMAA (Qatar General Electricity and Water Corporation).Explore chapter
Falling oil prices have spurred ongoing efficiency and diversification efforts in Qatar, with data from Qatar National Bank (QNB) showing that more than half of the state’s GDP is now accounted for by the non-hydrocarbons sector. Figures from the third quarter of 2014 showed industry contributed 6% of nominal GDP, with manufacturing accounting for $19.7bn of industry’s $30.7bn total contribution to GDP in 2013, or 64%. Qatar is now one of the world’s largest fertiliser exporters, with the GCC accounting for around one-quarter of global urea trade by volume in 2013 and 12% of global ammonia trade. While heavy and medium industry will remain major pillars moving forward, Qatar National Vision 2030 has emphasised the need for a shift towards knowledge-based industries, with lighter, high-tech manufacturing now receiving a boost and efforts now under way to encourage greater private sector involvement in the sector.
This chapter contains an interview with Khalid Al Subaey, Managing Director, Mesaieed Petrochemical Holding Company.Explore chapter
Rapid population growth and a fast growing economy are putting high demand on Qatar’s transport sector. However, several mega projects envisioned in Qatar National Vision 2030, along with infrastructure upgrades being implemented as Qatar gears up to host the 2022 FIFA World Cup, are expected to ease this pressure moving forward. Indeed, in September 2014 the minister of transport announced the government would be investing $140bn in transport infrastructure over the next five years. Meanwhile, Hamad International Airport opened in May 2014, with the new airport’s capacity reaching 36m passengers per year, and Doha Port has undergone several expansions and now comprises nine quays and two container berths. Plans for three interlinking railway services across the country are also in the pipeline, and an estimated 240 major interchanges, ranging from conventional traffic lights to junctions with tunnels and flyovers are set to be constructed as part of the state’s expressway programme.
This chapter contains an interview with Jassim Saif Ahmed Al Sulaiti, Minister of Transport.Explore chapter
Construction represents Qatar’s fastest-growing sector, with the government having pledged $200bn of investment as part of a vast infrastructure expansion scheme. As a result, opportunities for contractors abound, particularly in the transport, retail, real estate, tourism, and education sectors, not to mention the eight multibillion-dollar stadia being built in preparation for the 2022 FIFA World Cup. With such rapid growth, however, the sector has faced numerous challenges, including late payments, inflation and project delays. Labour conditions in the sector have also come under considerable international scrutiny. The state is working to address these issues however, with the government having announced plans for far-reaching labour reforms that will improve its work visa and salary payment schemes.
This chapter contains an interview with Nasser bin Ali Al Mawlawi, President, Ashghal (the Public Works Authority).Explore chapter
Property prices are on the up in Qatar, as are profits for listed real estate companies. Lending to the sector is also growing, with credit facilities worth $34.4bn at the end of 2014, the largest share of commercial banks’ loan book. The upward trajectory of residential rents is also gaining pace. After rising 7.9% y-o-y in August 2014, rents increased by 8.1% in September and 8.3% in October of that year. Meanwhile, Doha’s grade-A office stock, which totalled 2.5m sq metres in 2013, is set to increase when another 300,000 sq metres comes on-line in 2015. Demand is expected to hit 3.4m sq metres by 2019. Elsewhere, the size of the retail sector is expected to triple by 2016, with another 14 malls due to enter the market, bringing the total to 1.7m sq metres of shops.
This chapter contains interviews with Turki Mohamed Al Khater, Chairman and Managing Director, United Development Company; and Omar Hussein Alfardan, President and CEO, Alfardan Group.Explore chapter
Telecoms & IT
The telecoms sector in Qatar has grown at a rapid pace over the past decade and today boasts at least 100% mobile penetration, 93% laptop ownership, 65% smartphone ownership and 29% tablet penetration. Data services have underpinned revenue growth in recent years and are expected to continue driving demand and revenues in the mobile segment. Meanwhile, the take-up of IT services has been increasing rapidly in the state, with 85% of the population accessing the internet in 2013, compared with 38% in 2008. IT is regarded as a key sector moving forward, and the country has seen a strong push to encourage SMEs, which make up 97% of Qatar’s private sector, to use IT solutions, particularly in terms of cloud computing.
This chapter contains interviews with Hessa Sultan Al Jaber, Minister of Information and Communications Technology; and Rashid Fahad Al Naimi, CEO, Qatar Foundation Investments, and Chairman, MEEZA.Explore chapter
Tourism & Culture
The last decade has seen a rapid expansion in the number of hotels and other tourism facilities in Qatar, as the state has invested in transforming the country into a luxury, sports and business destination. While in 2014 the majority of tourists visited the country for business purposes, the Qatar National Tourism Sector Strategy 2030 aims to reverse this trend, with hopes that by 2030, 64% of all non-GCC tourists visit Qatar for leisure. The hosting of the 2022 FIFA World Cup should boost growth across the sector, with the government expected to spend as much as $200bn in the build-up to the global event. Meanwhile, Qatar is increasingly looking to preserve its archaeological and heritage sites with specific initiatives to safeguard its heritage and strengthen laws and regulations that support cultural preservation.
This chapter contains interviews with Sheikh Faisal bin Qassim Al Thani, Chariman, Al Faisal Holding; and Hala Mohammed Al Khalifa, Director, The Fire Station – Artists in Residence.Explore chapter
Education & Research
The government of Qatar has identified education as key to meeting the targets outlined in both the National Development Strategy 2011-16 and the Qatar National Vision 2030. Government expenditures in 2014 emphasised education, which accounted for over 7% of the national budget. Private sector actors are also playing an increasingly important role in providing education services, particularly at the primary and secondary levels, with private schools catering primarily to the expatriate population, although the number of Qatari nationals enrolled in these facilities is gradually increasing. Meanwhile, at the tertiary level a number of new research and development facilities across the state are helping to establish a strong cadre of research programmes.
This chapter contains an interview with Mohammed Abdul Wahed Ali Al Hammadi, Minister of Education and Higher Education.Explore chapter
Qatar’s rapid population growth over the past 10 years and the rising incidence of lifestyle-related diseases means the state represents the fastest-growing health care market in the GCC. The sector is forecast to be worth some $9bn by 2018, about double the $4.6bn seen in 2013, with the inpatient market pegged to hit $2.5bn and the outpatient market expected to reach $6.6bn by that time. Allocations to the health care sector increased by 12% year-on-year in the 2014/15 budget, to $4.3bn, as Qatar prepares to double the number of health facilities in the country by 2022. Meanwhile, with non-life insurance penetration at 0.6% in 2012, against a global average of 2.8%, Qatar’s health insurance market shows significant room for growth.
This chapter contains an interview with Hanan Mohamed Al Kuwari, Managing Director, Hamad Medical Corporation.Explore chapter
Qatar is ramping up its production schedule in preparation for the 2022 FIFA World Cup and the state is allocating around $200bn for the tournament and associated projects, with the money to be invested in an extensive programme of infrastructure and service development. However, Qatar is looking beyond the World Cup and aims to establish itself as a global centre of excellence for all aspects of sport. To this end the Ministry of Youth and Sports was founded by the government in June 2013 and is expected to strengthen the long-term development of athletics in the state, improving planning and oversight, and consolidating the government’s involvement in the sector. Other notable institutions leveraging the growing concentration of sector expertise include the Aspire Academy for sports and the Aspetar Sports Medicine and Orthopaedic Hospital located in the Aspire Zone, an integrated complex of sports facilities, all of which should ensure the growth of the sector’s international standing moving forward.
This chapter contains an interview with Dahlan Al Hamad, President, Qatar Athletics Federation; and Vice President, International Association of Athletics Federation (IAAF).Explore chapter
The state of Qatar has become a hub for regional broadcasters, and the country enjoys high levels of media consumption with, for example, some 81% of Qatari residents reading newspapers, compared to a figure of 65% regionally. Elsewhere, Qatar’s internet penetration rate was 85.3% at the end of 2013, according to the International Telecommunications Union, one of the highest levels in the GCC, with 72% of the state’s internet users saying that “passing time online” is important, compared to 71% regionally. Meanwhile, total advertising spend in Qatar in the first three quarters of 2014 was $461m, down 1% from $466m in the same period of 2013. Newspapers were the dominant medium on the advertising market, accounting for $353m, or 77% of overall spend.Explore chapter
With strong foundations in a thriving economy, a young population and a maturing consumer base, Qatar’s retail sector looks set to maintain robust growth as the country continues to develop into a major regional centre for trade and commerce. The state’s luxury retail segment in particular has witnessed strong growth in recent times with the rapid growth of the economy providing luxury retailers with a large and wealthy consumer base. A total of 14 new malls are in the pipeline and are set to add more than 1m sq metres of retail space over the next three years. In addition to malls, mixed-use projects are also being developed in Doha with one such development set to include 640 retail stores and 56,600 sq metres of leasable shopping space when fully operational.Explore chapter
Accountancy & Tax
In conjunction with PwC, this chapter contains an overview of the tax framework in which local and foreign investors operate in Qatar, including a look at the Customs duty exemptions for some firms and an outline of the incentives available to those businesses that are diversifying the economy.
This chapter also includes a viewpoint from Stephen Anderson, Managing Partner, PwC Qatar.Explore chapter
With Pinsent Masons, this chapter contains an outline of the legal framework in which local and foreign investors operate in Qatar. It includes an examination of the rules related to company ownership, an overview of the employment procedures governed by the Labour Law, and a look at the new actions being taken to boost cyber security.
The chapter also includes a viewpoint from James Elwen, Partner and Head of Qatar Office, Pinsent Masons.Explore chapter
The Guide contains listings of some of the leading hotels and resorts in Qatar and contacts for important government offices and services. It also contains useful tips and information for first-time or regular and business and leisure visitors alike.Explore chapter
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