In 2018, Qatar's GDP grew to USD225 billion and foreign trade jumped 19% to reach USD116 billion. What are the major factors behind this improvement, and what new measures are you planning to bolster the business environment in Qatar?
In recent years, international trade and investments have been the main drivers behind Qatar's economic growth and diversification. Capitalizing on its strategic location between East and West, Qatar has successfully established direct commercial routes with a number of strategic hubs and major markets around the world using its advanced infrastructure to bolster its trade activities. Qatar's trade balance registered a surplus of QAR191.4 billion in 2018 compared to QAR136.9 billion in 2017, as exports grew to QAR306.8 billion, an increase of QAR61.1 billion or 24.9% compared to 2017, which recorded total exports of QAR245.7 billion. Growth in international trade is expected to maintain momentum, as Qatar expands its activities to major international markets using the country's high-tech logistics and advanced facilities. Today, the new Hamad port accounts for 27% of the regional trade volume in the Middle East, with an annual capacity of 7.5 million cargo containers, positioning Qatar as a major transit hub with links to more than 40 ports in three continents. Hamad International Airport, meanwhile, is one of the biggest in the region, linking Qatar to more than 160 destinations worldwide via Qatar Airways, which operates a fleet of more than 230 aircraft.
What are the most appealing sectors to continue diversifying the economy, and what measures from your administration will ensure their proper development?
Qatar has been channeling its hydrocarbon revenues into supporting various economic sectors and transforming national industries and trade sectors into active partners in achieving the objectives of QNV 2030. Ongoing investments into the development of Qatar's infrastructure enhances the competitiveness of domestic industries and lays the foundations of a strong production base that is contributing to balanced economic growth. This has been evident in the increasing contribution of Qatar's non-oil sectors to GDP, which maintained its growth in the first half of 2018, increasing by over 5% compared to the same period of 2017. While Qatar has accelerated the implementation of plans aimed at bolstering productive sectors, particularly the industrial sector, the government is also dedicating a great deal of importance to bolster its energy sector, with plans to increase its LNG production capacity increased from 77 million tons to 110 million tons by 2024. By embracing these integrated and balanced policies, Qatar is expanding its economic base, bolstering investor confidence in the country, and increasing the contribution of various sectors to the development of the national economy in line with QNV 2030, which envisions a future built on the principle of sustainable development to ensure prosperity for future generations. Moreover, Qatar's second national development strategy has (2018-2022) identified six priority sectors to ensure diversification of the economy: manufacturing, financial services, professional and scientific activities, tourism, logistics, and ICT.
What will be the relevance of the contribution of the private sector in order to develop the Qatari economy?
In April 2019, the government approved a draft law to regulate public-private partnerships, which will provide investors with the opportunity to finance, develop, and operate projects in a number of priority sectors. Once ratified, the law will provide a legislative framework to involve the private sector in the implementation of various state projects through build-operate-transfer (BOT) contracts among other forms of partnerships depending on the nature of projects. The law will pave the way for investments in the fields of food security, sports, tourism, health, education, and logistics. Major projects in food security among various other sectors in addition to projects associated with preparations for the 2022 FIFA World Cup account for 43.3% of Qatar's total expenditures in 2019. In total, Qatar is committed to the implementation of new projects worth QAR421 billion, including new projects worth QAR48 billion in 2019, with QAR22.7 billion allocated for the health sector and QAR19.2 billion for the education sector. Qatar's spending on these projects will provide a myriad of opportunities for the private sector to tap.
What are the efforts in terms of new measures and policies applied by the government of Qatar in order to attract FDI?
In the past few years, Qatar has revised its legislative framework and business regulations to improve the country's business-friendly environment and bolster investments by providing attractive incentives to foreign investors. These include a law on regulating the investment of non-Qatari capital in economic activity that allows foreign investors up to 100% ownership in all economic and commercial activities. Under current legislation, Qatar offers income tax exemptions as well as exemptions from customs duties on the import of all required goods for production with no restrictions on repatriation of capital. Foreign companies that choose to operate in Qatar have access to warehousing parks and industrial zones as well as free and logistics zones in strategic locations in close proximity to Hamad International Airport and Hamad Port. Investors in free zones can export to local markets, tap investment funds, and enter into joint ventures with state-backed local companies. Qatar has also opened its real estate sector to foreign investors by easing restrictions on property ownership with the issuance of Law No. 16 of 2018 on regulating non-Qatari ownership and use of real estate in Qatar. The law enables investments in the property market through investment funds in 16 areas, freehold ownership in 10 strategic areas, the ownership of residential villas within compounds, and the ownership of shops within malls.
How is the ministry standardizing the different resources under the same umbrella for companies to be easily established in Qatar, through initiatives like the Single Window?
The Single Window for investor services is one of numerous initiatives that the Ministry of Commerce and Industry has launched to speed up licensing procedures for both local and international investors and to streamline business and industrial activities across the country.
The Single Window for Investor Services enables investors to complete numerous transactions such as the incorporation of companies and factories, the registration of trade names and the issuance of commercial records, environmental permits, and industrial licenses among other licenses and services such as the recruitment of foreign labor. Investors in the industrial sector also benefit from several other initiatives. These include streamlining the processing of permits among 19 government agencies, the extraction of a construction license for a warehouse within three working days, and “Own Your Factory Within 72 Hours" initiative, which streamlines the issuance of all industrial and environmental approvals and licenses.
What will be the next practical steps of ministry in 2019-2020?
The Ministry of Commerce and Industry will pursue its efforts to further improve Qatar's business environment, attract new investments into the country and bolster the competitiveness and productivity of the private sector with a special focus on expanding the industrial sector. This includes the expansion of the Small and Medium Scale Industrial Area, which will offer 155 land plots to accommodate new industries. Some 400 industrial projects currently under construction and a total of 775 industrial land plots have been allocated so far in the industrial area. Another 19 additional investment opportunities will be announced in a number of sectors and industrial activities in the coming period.