The Business Climate and Opportunities in Qatar

Alex SchnappU.S.-Qatar Business Council

Qatar قطر

About the Business Council

Mission - To provide a forum for discussion of key economic, commercial, and other issues of interest to American companies doing or planning to do business in Qatar, to provide insight into Qatar and its international and business environment, and to play a leading role in the expansion of the U.S.-Qatar bilateral relationship

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Over 40 U.S. and Qatari Members

SMEs and Fortune 500 Companies

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Office in Washington, DC

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The State of Qatar دولة قطر

- Ranked 48th out of 189 countries for Ease of Doing Business- Economic freedom score of 71.2 - 30th freest economy in the 2014 Index- US FDI in Qatar (stock) was $10.6 billion in 2012, up 34.1% from 2011

Qatar by the Numbers

GDP: $202.45 billion - 6.3% GDP projected annual growth rate for 2014

GDP per capita (PPP): $103, 900 (World Rank: 1)

Net foreign assets: $24.676 billion (2012)

Population: 2,042,444 (July 2013 est.)

Population under 25: 26.4%

Pop. growth rate: 4.19% (4th fastest in the world

Qatar by the Numbers

Ranked 13th in global competitiveness

Gross national saving: 58.8% of GDP (2012, World Rank: 2)

Unemployment rate: 0.5% (2012, World Rank: 3)

Top U.S. Exports to Qatar

Qatar was the United States’ 45th largest goods export market in 2013

U.S. goods exports to Qatar in 2013 were $5.0 billion, up 38.6% ($1.4 billion) from 2012, and up 1,117% from 2011

Qatar is our 57th largest goods trading partner with $6.3 billion in total (two way) goods trade during 2013

Good imports totaled $1.4 billion

2%

3%7%

11%

12%

65%

Aircraft Vehicles MachineryPrecious Stones Electrical Machinery Agricultural Products

In March, Emir Tamim approved the biggest budget in the history of Qatar - $62 billion

Infrastructure and transport costs will jump 21.94% to $20.76 billion

Education spending will rise 7.35% to $7.22 billion

Health care costs will go up 12.14% to $4.31 billion

The budget has increased allocations to provide housing for Qataris by 18% to nearly $1 billion

Compensation for government employees is also expected to increase and reach $13.04 billion

Qatar 2014-2015 Budget

Qatar National Vision 2030

The National Vision aims at transforming Qatar into an advanced country by 2030, capable of sustaining its own development and providing a high standard of living for all of its people for generations to come.

$220 billion set to be invested over the next 8 years in the spirit of the National Vision and the 2022 World Cup.

Human Development - Development of all its people to enable them to sustain a prosperous society.

Social Development - Development of a just and caring society based on high moral standards, and capable of playing a significant role in the global partnership for development.

Economic Development - Development of a competitive and diversified economy capable of meeting the needs of, and securing a high standard of living for, all of its people for the present and for the future.

Environmental Development - Management of the environment such that there is harmony between economic growth, social development, and environmental protection.

Leading Sectors of Opportunity

Construction

Medicine and Healthcare

Defense and Security

Information Technology

Petrochemicals

Transportation

Water and Wastewater Technologies

Agriculture

EducationAspire Tower, Doha

ConstructionPlans to invest $20 billion in tourism infrastructure

Projects focusing on housing, hotels, new stadiums, a new port, metro and rail systems, malls

Estimated $168 billion of work is expected to be awarded for top twenty projects over the next few years

Construction sector expected to expand by 14.1% in 2014, up from 13.6% in 2013

Lusail City is most expensive project by value at $45 billion

Medicine and HealthcareHealthcare expenditure accounts for nearly 2% of GDP ($4 billion)

Major medical issues - cardiovascular diseases, cancer, prevalence of obesity and diabetes due to growth in per capita income and increasingly sedentary lifestyles

69% of doctors and 91% of nurses are recruited from abroad

Healthcare system needs additional investment of $550 million and 2,000 additional doctors and nurses to improve healthcare services

$494 million currently being spent on primary healthcare - government needs to raise that to $1.03 billion by 2017 to accommodate population and exponential increase in demand

Defense and Security

Opportunities in the defense sector are dominated by large companies, especially in aerospace engineering

$11 billion arms deal struck between US and Qatar - US companies Boeing, Raytheon, and Lockheed Martin to supply Apaches, Patriot missiles, and Javelin missiles

Opportunities in security training, security equipment, cyber capabilities, access control

IT and Telecommunications

Government spending on IT projects will grow at a high rate over the medium term

National broadband network will expand fibre broadband infrastructure to 95% of homes and businesses by 2015, enabling new services such as cloud computing to grow rapidly

The government is focusing on increasing IT use through SMEs

The Qatari government has outlined plans to invest $1.6 billion in information technology and IT services as part of its ICT-2015 strategy

IT services are expected to increase from 33% of IT spending in 2013 to 37% by 2017.

Oil & GasQatar is the largest exporter of liquefied natural gas in the world

Oil production levels will remain steady over the years as Qatar is producing around 730,000 bbl/day at capacity

Qatar often focuses its natural gas development on integrated large-scale projects linked to LNG exports or downstream industries that use natural gas as a feedstock

These projects tend to include investment from international oil companies (IOCs) with the technology and expertise in integrated mega-projects, including Occidental Petroleum, ExxonMobil, Shell, and Total.

Petrochemicals

The bulk of Qatar Petroleum’s downstream investment has been in petrochemicals

In 2013, total production capacity of Qatar’s petrochemicals and fertilizers industry reached 18 million tons per annum

Fertilizers account for the major share of 52.1%, followed by basic chemicals and polymers which represent 23.3% and 10.4% accordingly

Qatar's long-term objective for the manufacturing sector includes developing small and medium-sized enterprises (SMEs)

The petrochemical industry will increase production from 9 million tons a year (t/y) to 23 million t/y by 2020 to support two major projects beginning in 2014

TransportationQatar plans to invest $140 billion over the next five years in transport infrastructure - includes new airport, roads, and a metro system (in anticipation of 2022)

Qatar Rail has announced plans to build an integrated railway network at a cost of $40 billion

Development of transport sector has two goals: stimulate economic diversification and prepare for the 2022 World Cup

Over the short term, the road sector will see some of the strongest growth - to expand by 8% in 2014

Road infrastructure is projected to support a population of 3.8 million by 2030.

New Doha Port Project is being constructed at an estimated cost of $8 billion

Water and Wastewater Treatment

Qatar has budgeted to spend $4.1 billion up to 2015 on electricity and water projects, aiming to increase the country’s water reserves by up to 126%

Ashghal, the PWA of Qatar, issued a tender for a project that involves working on 16 sewage/storm/groundwater pumping stations in Doha, Rayyan, and adjacent areas

The PWA will shortly award contracts worth nearly $1.7 billion and has announced $550 million worth of new water and sanitation projects to be carried out

Water consumption expected to increase by almost 6% per year through 2018.

Wastewater sector has also proven fertile ground for foreign firms

Agriculture

Qatar currently imports 92% of all its food.

Currently engaged in the Sahara Forest Project, which opened its pilot facility in Qatar in 2012 - goal is to lay sound scientific foundations for bringing restorative growth to Qatar and to deserts around the world

Government working to remove natural obstacles that impede horizontal extension of agriculture by supporting farmers and encouraging national investments in the agricultural sector

Opportunities in desalination, agri-tech, renewable energy, food storage and distribution

Education

Many universities from the U.S. have opened up satellite campuses in Education City: Cornell, Carnegie Mellon, Georgetown, Northwestern, Texas A&M

About 1,200 Qataris are currently studying in the United States

The 2014-2015 financial plan includes a promise to construct 85 new schools over the next year and a half

Questions?

Thank you!

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