QATAR STEPS UP TRANS­PORT SPEND­ING

Eco­nomic di­ver­si­fi­ca­tion in Qatar takes many forms. Qatar Pe­tro­leum (QP) for ex­am­ple ac­quired a nat­u­ral gas im­port ter­mi­nal fa­cil­ity in co­op­er­a­tion with Exxon Mo­bil and Conoco Phillips in Texas and is now in the process of ob­tain­ing per­mis­sion by the US g

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In­crease in spend­ing on Qatar's trans­port sec­tor has re­sulted in build­ing the mo­men­tum across Qatar's rail, avi­a­tion and port projects, which in turn is paving the way for a broad­en­ing of the state's eco­nomic base.

As the US be­comes a net pro­ducer of gas, the in­vest­ment would also al­low QP to open up new mar­kets for its nat­u­ral gas and Qatar to main­tain its cur­rent po­si­tion world­wide as a ma­jor bro­ker in the nat­u­ral gas mar­ket. It also en­sures that hy­dro­car­bon rev­enues for Qatar will con­tinue un­abated in a chang­ing global land­scape for en­ergy de­mand.

But what does this have to do with en­trepreneur­ship? Just like QP adapt­ing to chang­ing de­mand for en­ergy, Qatar's non-hy­dro­car­bon sec­tor, which con­sti­tutes about half of to­tal eco­nomic out­put, needs to adapt, evolve and grow. It's not just a mat­ter of na­tional pride to di­ver­sify Qatar's econ­omy away from oil and gas, it is es­sen­tial for the coun­try's long-term eco­nomic sus­tain­abil­ity. And who bet­ter to do it than en­trepreneurs? Men and women who cre­ate busi­nesses that grow into small and medium sized en­ter­prises are the en­gines of wealth and job cre­ation world­wide.

And Qatar is well po­si­tioned to of­fer en­trepreneurs a base from which to do business - it ranks in the top tier coun­tries for ease of do­ing business ac­cord­ing to the World Bank, is the rich­est coun­try in the GCC by per capita in­come, and has an ac­tive youth pop­u­la­tion. Youth con­sti­tute over 30% of the pop­u­la­tion, have high lev­els of ed­u­ca­tional at­tain­ment when com­pared to other MENA coun­tries, and have an em­ploy­ment rate of nearly 70% - well over any other coun­try in MENA. While the num­bers are en­cour­ag­ing, en­trepreneur­ship in Qatar is very low when com­pared to in­ter­na­tional bench­marks.

The en­trepreneur­ship land­scape in Qatar has some weak­nesses but also presents some op­por­tu­ni­ties for adjustment and growth. For ex­am­ple it's ex­pen­sive to do business in Qatar be­cause salaries in the pub­lic sec­tor are rel­a­tively high, so busi­nesses who want to com­pete re­gion­ally find it dif­fi­cult be­cause their cost struc­tures are higher than their com­peti­tors. This is why many busi­nesses in Qatar that are suc­cess­ful tend to be in the non-trad­able sec­tor – re­tail, restau­rants and hos­pi­tal­ity.

Also, there are cur­rently no Dubai-style free zones from which busi­nesses fully owned and op­er­ated by for­eign­ers can flour­ish. While Qatar has plans to open up eco­nomic zones, the reg­u­la­tory de­tails have not been worked out yet so it's dif­fi­cult to know how much th­ese zones are go­ing to con­trib­ute to eco­nomic di­ver­si­fi­ca­tion and this is an op­por­tu­nity for the gov­ern­ment to de­sign a reg­u­la­tory frame­work that al­lows Doha to com­pete as a business hub with other economies in the re­gion.

On the other hand, for com­pa­nies that are es­tab­lished by for­eign­ers in Doha, the 51/49% own­er­ship law im­plies that many Qataris are ac­tively in­volved in man­ag­ing busi­nesses that are set up by for­eign­ers. This is in­ter­est­ing be­cause this is a dif­fer­ent form of en­trepreneur­ship than what we ob­serve in other coun­tries. The own­er­ship law gives an op­por­tu­nity for Qataris to get in­volved in, and con­trib­ute to SMEs that have been es­tab­lished by for­eign en­trepreneurs while at the same time get­ting on-the-job train­ing, skills-build­ing and pro­fes­sional ex­pe­ri­ence.

What other fac­tors drive en­trepreneur­ship in Qatar and what prac­ti­cal so­lu­tions can be put in place to stim­u­late a richer en­trepreneur­ship ecosys­tem? To find out, a gath­er­ing of en­trepreneurs, pol­icy mak­ers, aca­demics and oth­ers who are in­ter­ested in cre­at­ing an ecosys­tem that fosters growth of en­tre­pre­neur­ial ac­tiv­ity in Qatar will meet from Novem­ber 16 to Novem­ber 22, 2014 at Global En­trepreneur­ship Week (GEW). Thou­sands of sim­i­lar GEW events take place in Novem­ber ev­ery year, bring­ing in more than 7.5 mil­lion peo­ple and 125 coun­tries last year alone. Launched in 2007 by Carl Schramm of the Kauff­man Foun­da­tion and Gor­don Brown, for­mer Prime Min­is­ter of the United King­dom, the event will now be hosted this Novem­ber in 140 coun­tries world­wide.

In Qatar, a num­ber of work­shops or­gan­ised by Si­lat­ech will be ded­i­cated to bet­ter un­der­stand­ing the en­trepreneur­ship ex­pe­ri­ence. Th­ese in­clude a meet­ing of the En­trepreneur­ship Pol­icy Work­ing Group that will dis­cuss im­prove­ments in the reg­u­la­tory en­vi­ron­ment that can ben­e­fit Qatar's global com­pet­i­tive­ness, a work­shop on the up­com­ing eco­nomic zones and how they can be shaped to al­low en­trepreneurs from across the world to cre­ate wealth and jobs in Qatar and many other work­shops fo­cus­ing on youth and women en­trepreneurs that will shed light on the chal­lenges and op­por­tu­ni­ties faced by Qataris in start­ing an op­er­at­ing a business.

Just like QP adapt­ing to new mar­ket con­di­tions, the pri­vate sec­tor in Qatar will need to evolve and adapt to pro­vide a sus­tain­able ba­sis for na­tional eco­nomic growth. Global En­trepreneur­ship Week is an ex­cel­lent oc­ca­sion to ex­plore how ex­actly the pri­vate sec­tor will have to adapt to make this trans­for­ma­tion pos­si­ble

BY DR TAREK COURY is an economist at Si­lat­ech, a so­cial ini­tia­tive based in Doha.

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