Much has been said about the negative regional repercussions of the 2017 blockade on Qatar, but some of the economic consequences of the embargo have been surprisingly positive in nature. […]
Much has been said about the negative regional repercussions of the 2017 blockade on Qatar, but some of the economic consequences of the embargo have been surprisingly positive in nature. Using the blockade as a wake-up call, Qatar has accelerated its pace toward economic diversification and industrial self-sufficiency since 2017.
Overseen by the Ministry of Energy and Industry, a number of government entities have contributed to the efforts in one way or another by redirecting the country’s notable hydrocarbon revenue to the expansion of industrial infrastructure. Qatar Development Bank (QDB) is one such entity that, since its launch in 1997 by an Amiri decree, has empowered many Qatari businesses, especially SMEs in areas such as manufacturing, agrifood, and even healthcare and education. Indeed, the bank takes pride in adopting a sector-blind approach. Since the coming into effect of the blockade in 2017, QDB has ramped up its activities, contributing to the stability of the economy by investing in local industries that can satisfy the country’s needs in times of hardship. To accomplish this, QDB is using a mix of strategies: offering finance and funding on easy terms, facilitating the access of Qatari SMEs to preeminent know-how, and setting the right tone in the country’s SME ecosystem. To further this end, QDB launched the Qatar Business Incubation Center (QBIC) in 2014 to lend a helping hand to rising Qatari SMEs and even turn a few of them into “Qatar’s next QAR100-million (USD27.2 million) companies.“ QBIC is now regarded as “the best business incubator in the Middle East,“ says its general manager, Hamad Al-Qahtani, adding that they offer grants of up to QAR100,000 (USD27,000) as well as office space, coaching, and other exposure opportunities to qualified start-ups. And the focus on SMEs is not without good reason. Records show that small- and medium-sized companies perform well in the Qatari economy. Well over 90% of all private businesses in Qatar are technically SMEs, according to Abdulaziz bin Nasser al-Khalifa, CEO of QDB. The Ministry of Finance, meanwhile, believes that the nation’s SMEs can meet as much as 90% of the country’s needs and keep the country’s ambitious construction projects alive. Given the importance of SMEs for the future of the economy, their supporters are not limited to the QDB. Fortunately, the country’s larger banking sector is currently well-positioned to finance most enterprises, whereas some can even rely on international capital markets for funding. In the meantime, QDB, Qatar National Bank (QNB), several government ministries, and Qatar Chamber (QC), along with other stakeholders, have formed partnerships to coordinate their efforts. The Ma’an initiative, which was a joint effort between QC, QDB, and Qatar University, is a successful instance of such initiatives, enabling the Qatari youth and students to put their entrepreneurial ideas into practice. A similar scheme was launched by the Commercial Bank in 2018 to draw attention to the capabilities of Qatari start-ups by offering them workspaces and other forms of support. Some start-ups have already gone beyond their initial goal of meeting local requirements and ventured into international markets, exporting construction materials, plastics, agrifood products, and IT solutions. The activities are not limited to these categories, however, and niche businesses have also been addressed; in 2019, for instance, QDB supported the launching of a group of perfume brands, in addition to their bottling factory. Hamad Salem Mejegheer, QDB’s acting executive director of export, stated on the sidelines of a business forum in 2018 that some 300 non-oil companies had exported their products in that year, fetching over USD2 billion in revenue. With its SME-focused approach, Qatar is only looking to grow these numbers, thus providing itself a path through the blockade.