Qatar - Market Opportunities Qatar - Market Opportunities
The Government of Qatar budgeted $56.8 billion for expenditures in 2019. Expected spending on infrastructure in 2019 is $9 billion (16% of total expenditures); spending on healthcare is $6.2 billion (11%); spending on education is $5.3 billion (9.3%); and spending on transportation and communication is $4.5 billion (7.9%). Government spending will continue to support the long-term strategic goals set forth under the Qatar National Vision 2030, which include developing a knowledge-based economy and increasing the share of GDP derived from non-extractive industries.
The government has taken several initiatives to encourage more foreign companies to do business and invest in Qatar over the past year. The Ministry of Commerce and Industry (MoCI) is leading the efforts on both the Foreign Direct Investment Law and Public Private Partnership (PPP) law. The PPP law draft has been finalized and received cabinet-level approval in 2018; it is anticipated that it will offer opportunities for U.S. companies in the fields of healthcare, sports, infrastructure, and education.
- Infrastructure: Near-term market opportunities still revolve around major infrastructure projects in the lead-up to the 2022 FIFA World Cup, mainly involving road, water, electricity and sewage networks, along with other public facilities. More than $200 billion has been allocated by the government for construction, infrastructure development, public transportation, and logistics projects to meet and serve the demands of the country’s growing population and projected event spectators.
- ICT: The Information and Communications Technology (ICT) sector has also been a key focus of the government since the 2017 announcement of a “Smart Nation” program, which allocates more than $1.5 billion for ICT solutions in the transport, logistics, health, spots, and environmental sectors and is aimed at transforming Qatar into one of the most digitally-connected countries in the world. The Ministry of Transport and Communications has taken the lead on this program.
- Food Products: The embargo on Qatar significantly complicated food trade routes. Qatar imports over 90% of its food, and prior to the blockade, Qatar received nearly 40% of these shipments via Saudi Arabia. Major food suppliers to Qatar, which traditionally received shipments through Saudi Arabia and UAE, were forced to establish alternative trade routes. Food security has become a top priority, and the government continues to aggressively invest in local food production, which presents an array of opportunities for U.S. companies.
- Energy: The energy sector, specifically oil & gas production in Qatar, continues to present some of the greatest opportunities for American companies, especially with Qatar’s North Field mega LNG expansion project which is set to increase natural gas production by 43% by 2024 from 77.1 million tons per annum (mtpa) to 110 mtpa. Qatar Petroleum has also invited bids from international firms to develop and operate a new petrochemical complex in Ras Laffan Industrial City, which will feature the region’s largest ethane cracker. Such projects provide additional opportunities for American companies to consider. Recently, Qatar Petroleum invited investors to participate in the recently-announced Tawteen program, a localization initiative that aims to create domestic manufacturing and service opportunities for the energy sector supply chain. Applications will be accepted through June 15, 2019.
- Healthcare: Qatar has allocated $6.2 billion to healthcare spending in its 2019 budget. Healthcare projects include expanding Hamad Medical Corporation facilities, establishing national laboratories, and building new health centers.
- Aviation and Defense: The growing strategic partnership between Qatar and the U.S. is demonstrated by the recent series of major U.S. arms sales to Qatar. Qatar’s Foreign Military Sales portfolio is currently ranked 2nd in the world, with a total case value of over $24 billion. Qatar’s significant demand for aviation technology involves its continued global expansion plan for national carrier Qatar Airways and Hamad International Airport, in addition to military modernization initiatives. As demonstrated in recent years, Qatar’s plan to expand and modernize its military will continue to provide opportunities for foreign military and direct commercial sales, especially training and capacity building programs across all branches of the Qatar Armed Forces.