GRTU Participates in Business Delegation to Qatar

GRTU representative Michael Galea has in April participated in a trade mission to Qatar organised by Malta Enterprise. Mr Galea has prepared a brief overview of Qatar for members who would might be interested in exploring opportunities in this market.

Qatar Background

Qatar is a small flat limestone peninsula located in the Saudi Arabian peninsula into the Persian Arabian gulf. Politically Qatar is evolving from a traditional society to one based relatively on more formal democratic institutions to meet the requirements of social and economic progress.

The capital city is Doha. The population is 1.8 million as at 2011. Arabic is the official language and English is widely spoke. Religion is Islam. Natural resources are: petroleum, natural gas and fish. The national currency is the Qatari Riyal.

Qatar has 3 airports; Doha international, Al Khorramshahr and Al Udeid. It's major seaports are Doha, Mesaieed and Ras Laffan.

The new corporate tax in Qatar Is 10%. This applies mainly to foreign companies and is payable on a progressive scale up to a maximum of 35% and there is no VAT. The GDP for 2011 is estimated at €100 billion. External trade plays a big part in the Qatar's economy, mainly exporting oil and gas. Mining and quarrying including oil and gas account to 52% of the GDP.

Trade with EU 27 countries in 2010 accounted to about €13.1 billion. Exports towards Qatar stand about €5.3 billion. The EU exports to Qatar are mainly machinery and transport equipment which account to 60% other products range from manufactured articles, chemicals, food, crude materials, inedible fuels, beverage and tobacco to commodities and transactions n.c.e. Imports from Qatar to the EU mainly consist of fuels 94%, chemicals, machinery and transport equipment commodities and transactions and other manufactured goods.

Trade between Malta and Qatar in 2011 stood and €5.3 million. Comparing 2010 with 2011 total trade increased with 71%. imports from Qatar are relatively low, so Malta has a trade surplus with Qatar. The top goods exported from Malta to Qatar are printed material €3.6m and miscellaneous edible preparations €529K. Products imported from Qatar in 2011 where mainly plastics.

Qatar's total FDI in 2009 was also 36.4% higher than previous year, putting total FDI at about €35billion. This figure amounted to about 47.9% of the gross domestic product generated in Qatar in 2009. A spokesman for the Qatari Statistics Authority commented that: "despite the decline of liquidity in global markets in 2009 due to recession in World economy Qatar has succeeded in attracting foreign investment flows by QR 45.7 bn during the year."

Although to date the main activity is related to oil, the government is fully aware that diversification is a must if the buoyant economic growth recorded is to be pursued. In fact policies designed by the government are being carried out with the intention of facilitating this diversification process.

Qatar, besides it's economic diversification process is also seeking to promote more free market economy and to move away from state monopolies and monopolisticcompetition.

Another major factor that will be driving business opportunities is that related to the World Cup 2022 that will be held in Qatar. The World Cup which is considered as a global event will nonetheless serve as a promotional activity for Qatar. In view of this global event Qatar will be investing heavily to ensure that the world cup hosted in 2022 will endure a positive impression with all those attending the event as well as the billions of event viewers. It is expected that for the 2022 World Cup circa 65 billion United States Dollars will be spent mainly in transportation.

The real estate sector in Qatar is currently enjoying a boom. After Dubai it is the largest Market in the Middle East. This rapid growth is being driven by a number of factors. A main factor that has contributed in this sector is the reform that Qatar carried out in the constitution with respect to ownership of property. These changes actually made purchase of property more accessible to foreign investors since it allows the freehold of property within Qatar. These changes in part can be considered as being coherent with Qatar's strategy to reduce it's economic dependence on oil and to develop other sectors.

Another contributor to the real estate sector has been the big amount of foreigners employed in Qatar. The fact that the oil industry pays higher salaries to workers than competing industries, Qatar manages to attract a considerable number of workers such as: geologists, petroleum engineers and others which are driving the demand for property in the country.

Hosting the 2022 World Cup has increased the growth momentum in this industry. According to a recent research that has been carried out it is envisaged that the Qatari construction sector will be awarding in 2012 more than $22 bn new contracts. Also in view of the World Cup preparations, it is expected that the Qatari construction sector in the next 5 years will be most buoyant construction Market in the Middle East.

Education in Qatar today is being given the importance that it merits. Government is pumping billions of Qatri Riyals every year to further push up the level. The education received by all Qatari citizens is free. The Qatari government has an education vision in mind. To succeed a Supreme Education Council has been set up. The SEC is responsible for education policy and setting broad and sound goals for the school system. Under this system a new school system was intrigued better known as The Independent School Model.

The Qatari government has engaged on a drive to attract and encourage international schools to operate from Qatar. Schools setting up under this project are entitled to a number of incentives. All these efforts towards the education system are being carried out in view of the vision 2030. The main objective is to improve the skill of Qatari males and females to be in a better position to compete for better employment opportunities in energy and industry sectors and also improve the image of vocational training.

Qatar provides an excellent Market for English language courses. With respect to the English language courses, Malta has a very strong sector and provides high quality English language courses to thousands of foreign students on an annual basis. Opportunities in the education sector include those associated with newly privately funded schools; teacher professional development training; curriculum design and standards; innovative teaching, pedagogy, school furniture and learning difficulties. The awarding bodies that should be approached are the Supreme Education Council, The Higher Education Institute, The Evaluation Institute and the Outstanding Schools Oversight Committee.

Healthcare in Qatar is by and large provided by the Government. Private healthcare is practically non existent. In the pipeline the government has a privatisation drive so the opportunities here will also increase. It is planned that in the long term the government will hand over the healthcare services to the private sector.

Furthermore recent changes in Qatari law now allow foreign companies to invest in this sector together with a local partner. The opportunities within this sector are said to increase because the Qatari population is increasing very fast. Population forecasts by the International Monetary Fund show that for 2011 the population of Qatar was about 1.8 million. This represents an increase of 99% to the population recorded in 2005.

At present Qatar has free trade agreements with:

• Iraq
• Singapore
• European free trade association

There is a free trade agreement between Qatar and the USA. However, this agreement has been on hold since 2006. Qatar is also in the process of negotiating a trade agreement with Australia.