How is the international relations strategy evolving to strengthen commercial ties with potential markets, and what are the related opportunities?
SHEIKH ABDULLAH BIN NASSER BIN KHALIFA AL THANI: Qatar’s total investment in the US and Europe is about $135bn. We also have large investments in Asia, estimated at about $30bn, including $10bn in China. In Russia, our investments amount to approximately $13bn. Qatar also has longterm strategic plans to develop trade relations with the untapped profitable markets. This will be accomplished by working to overcome challenges and barriers to cross-border trade, diversifying the sources of imports and enhancing the competitiveness of non-oil products – in particular in the emerging economies of Asia, Africa and South America. Visits to a number of South American, Asian and African countries by Sheikh Tamim bin Hamad Al Thani, Amir of Qatar, have demonstrated this approach, where several agreements have been signed that establish economic and commercial partnerships between Qatar and countries within those regions.
Consultations and meetings have been held among Qatari businessmen and their counterparts, contributing to the establishment of investment projects in these emerging markets. For example, the investments in South Africa amount to more than $13bn and investments in Ethiopia total more than $500m. Qatar is working to develop and expand these investments and follow up on their implementation.
We have also pursued a policy of establishing trade fairs, conferences, and economic and investment forums, both in Qatar and abroad in order to consolidate existing relations and build new relations between Qatar and other countries. These include the Carbon Energy Forum in Doha, which stressed the importance of future energy demand for Asian countries, as measured by oil and gas prices. Qatar has also organised forums at the highest levels in London and Berlin to promote investment and trade between the two countries, and we are also planning to establish economic forums and trade meetings in other new markets. In addition, Qatar is exploring regional agreements with Kuwait, Iraq, Oman, Turkey, Pakistan, India, Azerbaijan and countries in Central Asia. These agreements aim to expand business activities by establishing air and maritime fleets, targeting in the first stage a market of more than 400m people.
As a result of these efforts, Qatar’s foreign trade witnessed sizeable growth during the second quarter of 2018, with the country’s trade balance increasing to QR47.7bn ($13.1bn). Qatar’s exports increased by 31.7% year-on-year, while imports increased by 14.4%.
What mechanisms are being put in place with the goal of strengthening Qatar’s overall attractiveness as an investment destination?
SHEIKH ABDULLAH: Qatar’s plan for attracting foreign capital is guided by three interrelated strategies. The first encourages foreign direct investment (FDI) through the development of laws and legislations. The second expands the role of the private sector, as it is impossible to attract foreign investors without a strong and proactive private sector. Specialised ministerial committees, directly supervised by us, have been formed to follow up on the implementation of these plans. The third strategy creates free zones. The legislative and legal environment is of paramount importance in creating a safe and stable investment climate for potential investors. To that end, laws that will encourage FDI have been issued, including one that allows foreign investors to invest in all sectors of the economy up to 100% rather than just 49%.
In order to achieve a qualitative improvement in expediting the approval of new businesses, a single window system was launched, enabling investors to obtain business licences promptly, either from within Qatar or abroad. Additionally, nationals of more than 80 countries are eligible for visa-free entry into Qatar, thanks to our new visa waiver upon arrival, and we have increased the percentage that foreign investors can invest in listed Qatari companies.
Despite the decline in oil prices and the pressures of the economic blockade, a surplus in both budget and balance of payments has been achieved, all while continuing to implement infrastructure development and projects related to the 2022 FIFA World Cup.
Qatar is highly interested in boosting FDI as it is a major contributor to productivity, competitiveness and growth. To this end, Qatar Central Bank has reduced regulatory restrictions to attract investments in the local capital markets. Additionally, the government has enhanced the protection to minority investors, and has established ICT facilities to boost economic integration and state projects. In this sense, the Council of Ministers has approved the establishment of a global data centre in Qatar for Microsoft, called Azure Cloud Computing.
The council has recently passed a bill to establish a Media City, with a goal to attract international media, technology companies and research and training institutions. We aim to expand and enhance the competitiveness of high productivity sectors like financial services, manufacturing, professional services, IT, logistics and tourism. Qatar is providing business opportunities for international companies within the framework of public-private partnerships, making these areas attractive to foreign investors through the second National Development Strategy launched in early 2018.
How might more favourable market dynamics for hydrocarbons prices affect the government’s agenda for industrial diversification?
SHEIKH ABDULLAH: As a major component of Qatar National Vision 2030, the long-term national development plan, the State of Qatar has been incorporating the transformation from a hydrocarbons-based economy to a knowledge-based economy. This has resulted in advances in education and technology. It is true that the prices of hydrocarbons have become unstable, but this is partly a result of non-economic factors. Some producing countries have manufactured more oil than what is needed for economic development in order to advance political agendas. From 2014 onwards, this has resulted in a large surplus in global supply and a significant decline in world oil prices. Although improvement has been recorded, this overproduction has negatively affected the budgets of many countries whose economies rely more heavily on hydrocarbons revenues.
Asia is the main destination for Qatar energy exports, and long-term contracts with client countries have helped us overcome price fluctuations. In fact, the top-five trading partners for the country are from Asia and account for 64% of total exports. Qatar is advancing its policy of diversification and readiness to move towards a knowledge-based economy by developing education in all stages, and partnering with the most prominent educational institutions in the world. We also aim to motivate and develop the spirit of innovation, encourage entrepreneurship in the society and create an environment that is suitable for entrepreneurs, enabling them to develop and innovate all sectors. Furthermore, we aim to develop the necessary educational systems to upgrade human capital, which should contribute positively to overall economic development.
State-owned Qatar Development Bank is supporting the business incubator for start-ups focused on technology and innovation. The government seeks to reflect these advancements through the widespread use of e-government applications and by strengthening Qatar’s performance in global indices. The private sector has a key role to play here. We strive to encourage and stimulate participation, which will enable Qatar to compete successfully in the IT sector.
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