Apr. 19, 2016


HE Sheikh Ahmed bin Jassim Al Thani

Qatar

HE Sheikh Ahmed bin Jassim Al Thani

Minister, Economy and Commerce

TBY talks to HE Sheikh Ahmed bin Jassim Al Thani, Minister of Economy and Commerce, on the impact of falling oil prices, the role of SMEs, and challenges going forward.

BIO

HE Sheikh Ahmed bin Jassim Al Thani served as the Director General of the Al Jazeera Media Network from 2011 until June 2013, when he was appointed the Minister of Economy and Commerce. He is also the Chairman of Enterprise Qatar, Deputy Chairman of the Qatar Financial Centre Authority, Member of the Board of the Financial Markets Development Committee, Member of the Supreme Council for Economic Affairs and Investment, Member of the Board of Directors for the Qatar Investment Authority, Member of the Advisory Board at North-Western University in Qatar, and Member of the Qatar University Board of Regents. He started his career at Qatargas as an Engineer in 1995, in which he ascended to various leading posts including Head of Production Engineering, Director of Production and Reservoir Engineering, Director of Offshore Operations, and then as the Chief Operating Officer-Engineering and Ventures. Sheikh Ahmed holds a degree in petroleum engineering from the University of the United Arab Emirates, followed by a master’s degree in integrated reservoir project management from the Imperial College of Science, Technology, and Medicine, London, and has studied at the Institut Français du Pétrole in France, and Delft University of Technology in the Netherlands.

How would you describe the way that the drop in oil prices has affected Qatar's economy?

Hydrocarbon activities have a vital role in Qatar's economy, and particularly in formulating fiscal policy, as oil revenues comprise a considerable share of government revenues. Hence, one shall expect that a fall in oil prices has some direct and indirect implications on the economy. However, it's worth reminding in this regard that the Qatar government has proactively planned to deal with such possible global market conditions; hence, the dramatic fall in oil prices is not a shocking aspect, but rather has influenced the government to adopt further measures with ease. Qatar's economy has several strong market fundamentals, which can adequately contain the negative implications of falling oil prices. The government's commitment to its planned vital projects over the coming five years can be perceived as a strong fuelling source for non-hydrocarbon activities, of which trade-based activities are the most important. The nature of planned projects, where several forward and backward linkages exist with other activities across the economy, suggest that non-trade based activities will continue observing robust growth over the foreseen future. These important facts shall, in turn, maintain confidence among businesses and consumers, and send clear signals on the growth prospects of our economy. Accordingly, trade-based activates shall expect a growing demand on their products, be it commodities or services, but perhaps with a slightly slower pace than what it would be under significantly higher oil prices.

What role do SMEs play in overall diversification?

The fast developmental pace that Qatar's economy has witnessed over the last 10 years and the associated demographic developments have strongly fueled the rising number of SMEs. Currently they comprise almost 97% of all companies. Nevertheless, our ultimate vision is not only to see the number of SMEs rise, but, even more importantly, see their contribution to economic growth, employment, and investment develop, among other positive dimensions. To achieve this promising target, the government, through its relevant bodies, has taken and will continue considering several direct and indirect measures to motivate SMEs in the country. On the Ministry's side, a new commercial companies' law was introduced and came into effect in August of 2015. The new law entails more efficient legal rules and procedures meant for licensing new businesses. While the new law targets all types of businesses, SMEs are expected to benefit the most, as the cost and time savings associated with this new law matter the most to small-scale businesses. More importantly, the Manateq free zones area, which will expand over the coming few years together with the development of logistic areas, shall with no doubt provide considerable opportunities for SMEs. These areas can be seen not only as a promising incumbent for SMEs, but also as a potential market for SMEs country-wide through backward and forward channels.

What business-related challenges in the Qatari economy do you foresee in the near to mid term?

Qatari businesses need to adjust well to the increased global competition that significantly narrows market sizes for individual businesses, given the fact that most activities in Qatar operate under open-market conditions. Of course, competition is not a newly emerged challenge, but one shall expect that its severity will increase in the foreseen future in light of slowing global economic growth. Therefore, Qatari businesses need to climb up the ladder of efficiency and need to think about new innovative products. Another possible challenge that could dampen business appetite for growth, and influence potential investors' decisions to invest, is uncertainty among the repercussions of falling oil prices and volatility. Equally important is the the lack of a better understanding of the market and its potential opportunities. The need to touch upon such a challenge will further rise over the near future, as traditional investments may not continue to be as profitable as they once were, especially in light of emerging global market circumstances. Hence, existing businesses as well as potential investors might face difficulty in accessing credit and finance as credit institutions may become more risk averse in the medium term. In this regard, as I mentioned earlier, the Ministry is conducting detailed diagnostic work to define promising sectors and activities in Qatar, and this will help potential investors to decide on the most profitable and sustainable opportunities. Moreover, economic and logistic zones shall also play a vital role in this context.

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