Business prospects in Qatar

Business prospects in Qatar article image

Qatar, a tiny Gulf state in the Middle East, is a relative newcomer on Australia's export radar, but this ambitious Arab emirate is no mere blip on the screen. With around 15 percent of the world’s proven reserves of liquefied natural gas (LNG), Qatar is focused, financed and ready to do business. This year, the country will double its LNG exports to 77 million tons, thrusting it to the top of the global per capita rich list. The International Monetary Fund has forecast growth of 16.5 percent in 2010, making it one of the fastest growth markets in the world and number one in the Middle East, far outpacing its Gulf Cooperation Council (GCC) neighbours. In such an environment, opportunities for canny exporters are plentiful and diverse. Qatar may be small, but this cash-rich new kid on the block is determined to make its mark. That means spending strategically for sustainable growth. Outside the emirate, the growing presence of Qatari capital on the international scene is attracting much attention. The Qatar Investment Authority (QIA), the country’s $75 billion sovereign wealth fund, weathered the recession with relatively few shocks, using the break to reassess and refocus. As the dust settles on the slowdown, the QIA, Qatari financial institutions and an abundance of private capital are all looking for interesting partnerships. But spending at home is the key for potential exporters. The QIA is only one of many funds that benefit from vast budgetary surpluses. Other state investment vehicles dedicated to healthcare, education and stabilisation are also on the finance ministry’s pay list. The message from the ministry is to diversify this desert economy and to develop enterprise and society. The government’s National Vision for 2030 focuses on human, economic, social and environmental development and is dependent on the continued influx of thousands of foreign workers, from unskilled labourers to experienced executives. Much of the country’s estimated $35 billion in revenues for 2010 has already been earmarked for massive infrastructure projects that belie the recession elsewhere. Qatar is playing catch-up with more developed states in the region and has the growing LPG receipts to fund a vision in concrete and steel. Development projects include the $14 billion Doha International Airport, which will have a capacity for 24 million passengers annually. Add to this a massive port relocation project, new rail networks and the construction of entire new cities at The Pearl and Lusail, and the extent of the government’s infrastructure investment program becomes apparent. Many Australian firms have already made their mark in Qatar’s construction boom. Last year, Victoria-based WWW Projects announced it would project manage the first phase of a $74 million deal to design, integrate and install the telecommunications and IT infrastructure for Ras Laffan Port, slated to be one of the world’s largest when complete. The company is delivering cutting edge communications and security infrastructure for this key departure point for the emirate’s LNG-laden tankers. Foreign expertise remains crucial to Qatar’s growth. "The country’s population has doubled over the last five years, mainly due to the arrival of skilled and unskilled expats," says Kym Hewett, Austrade’s senior trade commissioner responsible for Qatar. "Today, around 80 percent of the population of 1.7 million is foreign." The Government is keen to ‘Qatarise’ the workplace and young people are being trained to take the reins from foreigners in the future. For the moment, however, there are simply not enough locals to manage and staff enterprises in this fast diversifying economy. Training and management skills will continue to command a premium in the years to come.

New exporters

The opportunities for exporters are growing daily and Australia is well placed to benefit from Qatar’s success. The launch of Qatar Airway’s non-stop flight from Doha to Melbourne last December brings the thriving emirate that bit closer to Australians who want a piece of the action. Tourism has already increased and the greater facilitation of labour movement and freight shipment will doubtless have a marked impact on bilateral trade opportunities. Construction is thriving in Doha where cranes peppered the skyline right through the global economic downturn. "There has been a shift in focus towards public infrastructure, but this was partly in response to development needs," says Hewett. A growing population combined with massive investment in infrastructure guarantees that the sector will offer opportunities for years to come. While Doha’s bid for the 2016 Olympics may have failed, the authorities remain undaunted and efforts to make Doha a sporting heavyweight continue. The city is investing heavily in bids for the 2020 Olympics and the 2022 World Cup. Hotels and tourism projects feature heavily in the government’s strategic thinking and some $17 billion will be spent over the next five years to raise the number of hotel rooms in the emirate to 30,000. Not surprisingly for this desert emirate, agricultural products and foodstuffs are major imports. Food security is an important issue for the government and its voracious investment arms are on the hunt for foreign hook-ups that will help ensure preferential access to staples. Food imports are rising rapidly to feed a growing workforce and with an ethnically diverse expat population and a growing number of locals acquiring international tastes, Doha’s supermarket shelves are packed with variety.

Existing exporters

Qatar aims to create a sustainable, knowledge-based economy by 2030, making education a key focus for investment. Australian companies have already gained a foothold in the sector, mainly as consultants to the Supreme Education Council, which has overhauled standards and training for primary and secondary teachers. At university level, the multibillion-dollar Education City, an academic quarter aimed at making Qatar the regional centre for learning and research, has so far been dominated by American partnerships. The project is home to several satellite campuses of major US colleges including Georgetown, Texas A&M and Weill Cornell Medical College. Qatar University is also changing rapidly as English-speaking professors are brought in from overseas and the old regional system of rote learning is replaced by research and debate. Building personal relationships is crucial to doing business in the Middle East and Qatar is no exception. Many exporters who had hoped to operate from other regional bases are realising that a presence on the ground is the only way to ensure they are hitched to Qatar’s fast-rising star. Indeed, dealing from an office in neighbouring Dubai or Abu Dhabi (both members of the UAE) can be a hindrance to growing business. The rivalry between Gulf States has increased in recent years and while Qatar is at an earlier stage of the development cycle than its neighbours, the locals are keen to do business on their own terms. An active networking group exists for Australians and New Zealanders that want to improve their business presence in Qatar. Australia New Zealand Business in Qatar (ANZBIQ) hosts monthly events that offer new and established operators the chance to connect.

Advanced exporters

Building the right relationships can also help established exporters to reach beyond Qatar. Family connections and tribal bonds define this region and getting close to those in the know can open doors. Financial institutions were among the first to realise that proximity pays when looking to cross borders. Relationships win mandates and the days of suitcase banking are well and truly over. Also, with an excess of private capital on the Qatari market, foreign companies may find opportunities for local financing in Doha. With local capital in the mix, it becomes easier to leverage connections and to expand into new territories. As development gains momentum, Qatar has become more of a regional hub for business intelligence. The country’s ruler, Sheikh Hamad bin Khalifa, is a strong voice in the GCC, calling for greater economic collaboration and championing a single currency, while Al Jazeera, the hard-hitting English and Arabic news network, makes Doha home to some of the region’s top journalists.


Poor or opaque regulation remains a barrier to doing business in Qatar. Forming a company can be a lengthy and frustrating process while the commercial courts are relatively new institutions. It’s often difficult to predict outcomes when there is little precedent to work from. Cash flow can also become problematic in a market where payments can be painfully slow. Hewett recommends working with good lawyers to ensuring a rigid legal framework and clear payment terms from the outset. "Depending on the type of exporting you are doing, progress payments or separate expenditure payments that continue to give you some leverage are important planning considerations," he advises. Supporting local entrepreneurs and encouraging foreign businesses is firmly on the Qatari reform agenda. Last year, three sectors were thrown open to full foreign ownership: information technology, distribution and consultancy and technical services. But getting direct answers to legal queries remains difficult. "There are different structures on ownership and taxation depending on the industry you are in," says Hewett, "but here are also some mooted changes, so it is worth speaking with a local law firm to see what specifically applies to you."

The future

As many countries around the world contemplate a grim future of crippling debt and shrinking public spending, Qatar is on the threshold of a new phase of massive and sustained wealth generation. Economic sustainability is a key goal as this LPG-rich country has made it clear that investing for the future means acknowledging the finite nature of its natural resources. The challenge for exporters is to find a place in the market as this ambitious emirate diversifies from hydrocarbons and builds an enduring economic and social infrastructure.

Case study Viocorp

For a company that has provided internet broadcasting solutions to the Pope in Vatican City, Microsoft in Europe and Austereo in Australia, the Arabian peninsula may not seem the most obvious next move. But for Viocorp, a successful Australian digital media business, tendering for a contract with Al-Jazeera in the tiny Middle Eastern nation of Qatar might prove a lucrative opportunity. The eight-year-old company provides digital video solutions for clients at any scale: from simple webcasting to full-scale, real time internet broadcasting. Over the last four years it has developed such an international reputation that when Al-Jazeera sought tenders to develop internet broadcasting infrastructure in Qatar, they approached Viocorp and asked it to respond. For Ron McCulloch, executive chairman, the opportunity came out of the blue. "We’re based on the internet and accessible globally, so I guess if someone wants to talk to us from Qatar then its one click and they’re connected to us." When Al-Jazeera got in touch, McCulloch set out to find out as much as he could, talking to colleagues in Dubai and the Middle East and to the Australian Institute of Export (AIEx). "The response we got in regard to Al Jazeera was extremely positive, they’re a credible organisation. They’ve obviously made significant process in the last five years, which is exactly why they’re looking at the next stage: internet broadcasting." The process so far has been straightforward, with assistance from AIEx and a Qatari bank. "Our experience to date has been answering an extremely detailed and very disciplined document that told us exactly what we had to do." McCulloch hopes that, if successful in Qatar, Viocorp will be able to explore other opportunities in the region. "It would be ideal for us to have more than one client in that region, and I would imagine there are other prospects that would be interested to see the implementation we do. "Certainly it prompted us to think about placing a representative there to supervise, so the next stage for us would be to get a local representative we could use as a base for exploring other opportunities in the region." Viocorp are lucky to have a polished product in a defined market that operates across borders. "Our offering is relevant across the board, wherever you are globally. People are interested in solutions that give them additional functionality or scope across the internet." -Jennifer Blake

Trade Links

Austrade: Australia Arab Chamber of Commerce and Industry: Australian & New Zealand Business in Qatar: Department of Foreign Affairs and Trade: Qatar Airways:


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