Category: Analysis

2022 FIFA World Cup Brief

On March 26th, Qatar-America Institute hosted a representative of the Supreme Committee for Delivery & Legacy (SC), a Qatari entity mandated to deliver the infrastructure and legacy programs for the upcoming FIFA World Cup™ in Qatar, who shared relevant information about the mega-event set to take place in November 2022.

 

The SC is tasked with delivering proposed tournament venues and projects for the FIFA World Cup Qatar 2022™ – the first to be held in the Arab world – while ensuring that its preparations align with Qatar National Vision 2030.

 

For the FIFA World Cup™ in 2022, there will be a total of eight stadiums that are being built within a 55km radius, making it the first compact FIFA World Cup™ in the modern era. Each stadium will fulfill multiple purposes, not just sporting: community-based workshops were instituted to address and express the needs of local constituencies in the stadiums’ surrounding areas. The aim was to maximize the benefits from these projects by integrating and satisfying local demands as these structures are being completed to ensure they are used long after the last ball has been kicked in 2022.

 

This strategy will foster local development, promote and increase social cohesion, avoid bureaucratic mismanagement of resources duplication, and decrease the likelihood of disenchantment or skepticism from the local population towards the perceived benefits of hosting a sporting mega-event such as the FIFA World Cup™.

 

A concrete example of this strategy can be seen with the construction of the new state-of-the-art Doha metro system that will serve a dual purpose: firstly, it will offer sustainable transport to tournament venues and Qatari attractions for the 1.5 million fans Qatar expects in 2022, and secondly it will enhance accessibility and inter-connectivity amongst the eight municipalities that constitute Qatar. Therefore, the mega-event will be an opportunity for Qatar to promote its role as a main international destination for sports and to modernize the country’s infrastructure for its population.

 

Another noteworthy characteristic of the eight stadiums for the FIFA World Cup™ is that they are being built according to a criterion that incorporates sustainability and efficiency. For instance, the under construction Ras Abu Aboud Stadium will be a clear example of such commitment and, furthermore, demonstrate the country’s degree of technological sophistication. Like a Lego set, the stadium will be fully demountable, being built via the assembly of repurposed shipping containers that were used to transport materials to Qatar. Thus, once the tournament ends on 18 December 2022, state-of-the-art software will be employed to assist the disassembly of the structure. The various parts and components will be re-allocated to create both sporting and non-sporting facilities in Qatar. Ras Abu Aboud Stadium will be the first fully demountable tournament venue in FIFA World Cup™ history.

 

During the briefing, the SC’s representative noted Qatar’s recently implemented reforms for workers’ rights, which reflect their commitment to respect the standards of hosting the tournament and to improve the welfare of the country’s expatriate labor force. This was witnessed with the following policy decisions: Qatar’s unilateral decision to sign a three-year technical cooperation agreement with the United Nations’ International Labour Organization to promote labour laws in the country and build government officials’ capacity to implement them and ensure that recruitment practices are in line with best international practices. Additionally, the Amiri’s promulgation of Law No. 13 of 2017, which established a judge-led Labor Dispute Resolution Committee, and Law No. 15 of 2017, which limited working hours and secured paid leave, and with the creation of a Workers’ Support and Insurance Fund to ensure workers are paid overdue wages are just a few of the other significant reforms made.

 

Most notably, the SC pledged to allocate between $40-50 million to write off the debts that supply-chain migrant workers may have incurred as a consequence of unscrupulous non-affiliated recruiters in key labor markets. Unfortunately, the recruitment and placement industry, which is a global phenomenon, is a $464.3  billion industry that affects more than 150 million migrant workers. The SC’s pledge will transform the lives of those affected by these illegal practices.

 

The SC representative also discussed safety and security preparations for the 2022 World Cup and INTERPOL’s Project Stadia, which was established by INTERPOL in 2012 and funded by Qatar.  The aim of Project Stadia is to create a Centre of Excellence to help INTERPOL member countries in the planning and executing policing and security preparations for major sporting events. The 10-year project will contribute to policing and security arrangements for the 2022 FIFA World Cup™ in Qatar and will leave a lasting legacy for the world’s law enforcement community.

 

Lastly, the representative emphasized the existing degree of U.S.-Qatar economic ties in relation to the mega-event. Qatar has worked with over 30 U.S. organisations across a range of industries to date, all of which have been involved in some of the country’s most important tournament projects. Turner International, CH2M and Jacobs and AECOM have been integral to a number of construction projects. CISCO, Oracle and Amazon have been working with Qatar on everything from IT to networking to cybersecurity solutions, all to ensure 2022 will be the most connected tournament ever, for fans and businesses. And Leading U.S. universities including Georgetown and Northwestern and tech giant Facebook have been helping support Qatar’s innovation legacy programs. Overall, $10 billion will be invested in American services and expertise for the upcoming tournament in 2022.

 

 

(Image Source: Archinet.com)

 

World Cup Workers Provided Protection from Heat
Qatar Abolishes Exit Visa Requirement
Dr. Ali Al-Marri – A Conversation on the Status of Human Rights in Qatar
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Qatar’s Minister of Finance meets with the IMF & World Bank

Qatar’s Minister of Finance – Mr. Ali Shareef Al-Emadi – is leading Qatar’s delegation to the Spring Meetings of the World Bank Group and the International Monetary Fund from April 12-14. The Qatari delegation’s participation in the Spring Meetings is set against a backdrop of Qatar’s strong 2019 growth forecast of 2.6% and fiscal performance that will see the country post a surplus this year. This is despite the global economy entering “synchronized slowdown” according to the latest update of a tracking index compiled by the Brookings Institution and the Financial Times.[1] The IMF also cut its global growth forecast from 3.5% to 3.3% for 2019. Investor confidence in Qatar’s economy was reinforced in March 2019, with a $12 billion issuance that was well oversubscribed by investors globally.

 

Qatar Economic Update:

– Qatar is forecast to post a fiscal surplus of $1.2 billion in 2019 — the first surplus in 4 years — supported mainly by higher hydrocarbon prices translating into stronger budgetary revenues.

– Qatar’s macroeconomic resilience allows it to enjoy high investment-grade credit ratings from the three international credit ratings, Moody’s, S&P and Fitch. Despite the uncertainty created by recent geopolitical conditions, all rating agencies have rated Qatar’s economic outlook as “stable”.

– The non-oil and gas sector account for 64% of the overall economy in 2018, with construction and manufacturing driving GDP growth.

– Qatar’s economy grew by 2.7% in 2018, outperforming the GCC average of 2.4%.

Non-hydrocarbon exports have grown to represent a more material element of Qatar’s export mix, currently at 13.9% of total exports. The government’s diversification agenda will continue to increase the non-hydrocarbon contribution to economic activity.

– Qatar’s crude oil prices increased by 32.9 % for the first three quarters of 2018 to average US$71.5/barrel compared to an average of US$53.8/barrel in 2017.

 

 

Qatar Key Economic Facts:

Metric
Qatar
Population (December 2018)
2.67 million
Long-Term Credit Ratings1
Moody’s Aa3 Stable
S&P AA- Stable
Fitch AA- Stable
Nominal GDP
US$ 166.9bn (2017)
US$ 142.5bn (9-Month 2018)
Nominal GDP per Capita
US$ 64,705 (2017)
Fiscal Balance
Surplus/(Deficit)
US$ 1.2bn Surplus (Forecast 2019)
Debt/GDP ratio
50.2% (September 2018)
Trade Balance
US$ 53bn Surplus (2018)

 

  1. Qatar is in the same rating horizon as the likes of Belgium, Taiwan, Macau and the Cayman Islands. AAA rated countries include (not limited to) Australia, Canada, Denmark, Germany, New Zealand, Singapore and the U.S.

 

[1] “Global economy entering “synchronised slowdown” Financial Times, April 7, 2019

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Qatar National Museum Unveiled

Located in Qatar’s capital of Doha, the National Museum of Qatar (NMoQ) is an institution that celebrates the culture and heritage of Qatar and embodies the pride and traditions of its people while offering international visitors a dialogue about Qatar’s rapid change and modernization. The National Museum of Qatar generates a national spirit of participation and promote a cultural legacy.

The museum honors the traditions of the past, while embracing the future of Qatar through exhibitions, educational activities, cultural site visits, and technology-based programming.The museum aims to develop, promote, and sustain the cultural sector at the highest standards, in addition to creating, supporting, and inspiring the next generation of cultural audiences. The museum is divided into three chronological chapters of Qatari history that are showcased across eleven galleries. The galleries include a research center and laboratories that provide new study opportunities for students and dedicated researchers.

Everything in this museum works to make the visitor feel the desert and the sea,” said Jean Nouvel, the Pritzker Prize-winning architect who designed the innovative museum. Nouvel’s design was inspired by the Qatari “desert rose” with its curved disks, intersections, and cantilevered angles that grow organically around the original Emiri palace, a much-loved local landmark where the original National Museum was housed. Not to be confused with the plant of the same name, the Qatari “desert rose” is a natural phenomenon found in the deserts of Qatar where arid conditions create these unique clusters of gypsum crystals underground.

Nouvel hopes the design will have visitors questioning the mysteries of the desert’s concretions and crystallizations, bringing new meaning to the desert rose, all the while marveling at the Museum’s employment of futuristic design and modern innovation. “This building is at the cutting-edge of technology, like Qatar itself,” remarked Nouvel.

When planning the design of the Museum, Nouvel envisioned a site that would symbolize the growth and evolving identity

 of Qatar since the 1950s. It is for this reason that the Palace of Sheikh Abdullah bin Jassim Al-Thani sits in the center. Originally built during the early 20th century by Sheikh Abdullah bin Jassim bin Mohamed Al-Thani, the Palace has served as both a family residence and the seat of government.


“…from a little village, [Doha] has become a capital. What could be more natural, then, than the desire to testify, to talk about identification, about the evolving identity of this country as it reveals itself on the sensitive paper of history? And what could be more logical than to give concrete expression to this identification process in a National Museum of Qatar that will relate the physical, human and economic geography of the country, together with its history?”

 

 

 

 

 

Read more about the Qatar National Museum at the Links Below:

 

Qatar National Museum Tells a Country’s Story at Every Turn
The new National Museum of Qatar is a desert rose of mutant scale
Why Soft Power Is in Style in Qatar
The Middle East’s hottest new museum is here
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QAI Attends International Forum of the America’s

 

The Qatar-America Institute was represented at the International Forum of the America’s, appearing on the panel Envisioning the Cities of the Future.

A Summary of QAI’s Remarks

Qatar experienced an energy-driven economic boom that at one point made it the world’s fastest-growing country in the world, and made available the infrastructure that today makes it the largest exporter of liquified natural gas in the world – with 30% of global market share in that commodity – and with less than four years until it becomes the first country in the Middle East to host the FIFA World Cup in 2022.

This boom was of course enabled by hydrocarbon exports, but Qatar has built sustainability into the National Vision 2030 that was adopted as far back as 2008. That Vision has cascaded through to initiatives ranging from hosting the 2012 Conference of Parties – also known as COP 18 – that was an important milestone in concluding the Paris Agreement in 2015 (COP 21), all the way to efforts to ensure that 2022 will be the first ever carbon-neutral edition of the FIFA World Cup.

These events have acted as catalysts for sustainable management, including a drive to rationalize the consumption of water and electricity by the residents of Qatar through more realistic pricing mechanisms. That campaign is known as Tarsheed, which is Arabic for rationalization of resources. Tarsheed has succeeded in reducing harmful carbon emissions by about 5 million tons since its launch in 2012, due to the reduction in per capita consumption of electricity and water.

Food Security in Qatar has gone hand-in-hand with water conservation. The national plan for food and water security has enacted policies that have discontinued by law the practice of aquifer depletion for agriculture and incentivized the adoption of greenhouse and hydroponics technology to locally grow fruits and vegetables

 

About the International Economic Forum of the America’s

IEFA is a Montreal-based organization dedicated to convening global forums in four cities, including the World Strategic Forum in Miami. The Forum has grown to become a landmark organization bringing together more than 9,500 participants and over 540 speakers combined under the auspices of four annual conferences: the Conference of Montreal, the Toronto Global Forum, the World Strategic Forum in Miami and the Conference of Paris in conjunction with the OECD.

The choice of Miami for the World Strategic Forum is due to its location as the so-called “capital of Latin America” and recognition of the concentration of South American wealth and influence in Miami.

 

 

 

 

Curious to learn more about Qatar’s sustainability efforts and economic policy?

Find two resources below for more information. 

 

Qatar’s Domestic Sustainability Initiatives
Qatar’s Economic Competitiveness
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Qatar and California: Partners in Advancement

 

The Qatar-America Institute (QAI) has launched a new initiative, the Expert Voices Series. The initiative is envisioned as a medium for encouraging broader and more diverse conversations between Qatari experts and/or experts on Qatar with U.S.-based leaders in business, academia and politics.

In an effort to diversify outreach beyond the traditional East Coast hubs of Washington, D.C. and New York, QAI sought to initiate new channels of engagement with the key West Coast hubs of San Francisco and Los Angeles. With a population of 39.5 million and a GDP of $2.7 trillion – the fifth largest economy in the world – California (CA) was QAI’s natural choice for a first foray to the West Coast. The state boasts some of the world’s premier academic institutions and science labs, as well as America’s motion picture industry (Hollywood).

Silicon Valley in California’s Bay Area is the global capital for hi-tech innovation and entrepreneurship; the co-location of a critical mass of venture capital investors and a talent pool of unparalleled depth and quality has produced some of the world’s most valuable companies. California’s industrial origins in defense and aerospace remain integral to the state’s research and development (R&D) nexus and economic export composition.

 

Dr. Khalid Al-Ali – Qatari Tech Entrepreneur and Former NASA Specialist

The first participant in QAI’s Expert Voices Series was Dr. Khalid Al-Ali, a Qatari technology entrepreneur and Co-Founder and Executive Chairman of Senseta, a Silicon Valley-based data analytics firm.

In the field of aeronautics and exploration technology, Dr. Al-Ali spent 10 years in NASA’s Ames Research Center and Jet Propulsion Laboratories. Dr. Al-Ali was also the CEO of the Qatar Science and Technology Park (QSTP), Qatar’s premier business “free zone” dedicated to the development of market-ready tech products

Having earned his PhD at UC Berkeley and worked at NASA and DARPA-administered labs, Dr. Al-Ali has made California his second home both professionally and personally. He is uniquely well positioned to provide a nuanced outlook of promising and fertile areas of collaboration between Qatari entities and the State of California.

 


California Engagement Snapshot

 

 

Stanford University

QAI hosted Dr. Al-Ali in Northern California, where he featured as a speaker on a panel, “Technology Trends in Emerging Markets,” at Stanford University’s inaugural MENA Forum. As the CEO of tech firm, which has created knowledge-intensive jobs in both Silicon Valley and Doha, Dr. Al-Ali spoke about Qatar’s commitment to increasing its GDP contribution to R&D that forms the basis of commercially successful tech-enabled products.

On the panel, Dr. Al-Ali spoke about his experience leading the complex negotiations that brought two of the seven U.S. universities that have established full degree-granting campuses in Doha’s Education City. With his appointment as the first CEO of QSTP, he spoke of the vision to “capture the intellectual property from the academic institutions and providing a finance bridge from QSTP to create value from knowledge.” Dr. Al-Ali spoke of his leadership role on national steering committees that have shaped Qatar’s technology policy and articulated Qatar’s vision of integrating its industry with the research and higher education infrastructure that it has been investing massive resources to develop.

On the sidelines of the Stanford MENA Forum, Dr. Al-Ali held meetings with Research Fellows at the Hoover Institution, a leading American think tank, to discuss potential partnerships between Hoover Fellows and research institutes in Qatar, such as the Qatar Computing Research Institute and the Qatari Energy and Environment Institute.

Similar consultations were held with Distinguished Fellows at the Freeman Spogli Institute for International Affairs, with a specific focus on food security and energy markets and with the Stanford’s Program on Energy and Sustainable Development.

 

 

UCLA

UCLA’s Center for Middle East Development (CMED) hosted QAI and Dr. Al-Ali at the university’s Faculty Club for discussions that will reinforce UCLA’s already deep ties with Qatar. CMED is UCLA’s dedicated center for Middle East expertise and, for many years, has partnered with Qatar’s Ministry of Foreign Affairs to host an annual conference in Qatar under the banner of “Enriching the Economic Future of the Middle East.”

 

 

RAND Corporation Santa Monica

At the RAND Corporation’s Santa Monica headquarters, Dr. Al-Ali gave remarks on “Qatar’s Economic Diversification and Tech/Innovation Policy” to a select group of researchers, followed by an engaging Q&A session under Chatham House rules. He highlighted the nexus approach of linking Qatar’s universities with government-backed funding mechanisms, such as Qatar Development Bank (QDB) and QSTP. He emphasized that enabling the private sector through access to credit and business incubators will facilitate the creation of small and medium enterprises (SMEs) that will help Qatar diversify its economy away from hydrocarbons.

Though the RAND Corporation no longer maintains an office in Doha, it remains an important strategic partner to many Qatari institutions who rely on RAND for research and advisory support.

 

 

Larta Institute

The Larta Institute defines itself as providing a “mesh network” of mentorship resources, expertise, funding and connections to patient capital. In that sense, Larta is an Institute and not in the mold of traditional Bay Area “accelerators” that tend to be a source of one-time funding, office space for a limited time, and a scattered feedback loop.

Larta recognizes the fiercely competitive space of emerging technology start-ups and instead seeks to support nascent tech companies in every step of their lab to market transition. This starts with pairing companies with Principal Advisors who are experienced practitioners in both academia and industry. Larta is organized around the four pillars of Feed, Fuel, Heal and Innovation, with long-standing partnerships with the federal research funding arms of the National Institute of Health, Department of Energy and United States Department of Agriculture.

QAI and Dr. Ali had a very positive meeting with the Larta leadership. QAI expressed enthusiasm for converging some of Larta’s internationally renowned experience with Qatar’s efforts to cultivate its own organic “mesh network” of business enablers. This will help advance the Qatar National Vision 2030, which prioritizes economic diversification and human capital development.

 

 

The Pacific Council on International Policy

The Pacific Council is the West Coast’s premier member-based public diplomacy institute. It has hosted sitting U.S. Secretaries of State, Members of the U.S. Senate and House of Representatives, former presidents, and the list could go on.

The Pacific Council hosted a lunch in their LA headquarters in honor of Dr. Khalid Al-Ali. The lunch was well attended by Pacific Council members who hail from diverse industries: financial services, aviation, law enforcement, defense, academia and literature.

Dr. Al-Ali offered some remarks on Qatar’s journey from seeking partners in the 1960s to finance and provide the technology for a world-leading LNG industry, to its current investment-led boom in human capital development and a sovereign wealth fund with a global and diversified portfolio of assets. Under Chatham House rules, Dr. Al-Ali fielded many thought-provoking questions about Qatar’s role in international affairs, its sporting ambitions and engagement with the U.S.

 

 

 

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The Origins of Qatar’s National Sports Day

In an unusual move, the Emir of Qatar issued an Emiri decree in December of 2011 announcing the creation of a National Sports Day. Presently, Qatar’s National Sports Day acts as an important annual occasion (on the second Tuesday of every February) with the goal of engaging the local community in Qatar with sports activities and fostering the adoption of a healthy lifestyle.

 

The impetus behind the declaration of a National Sports Day also coincides with the launch of Qatar’s National Vision 2030 (QNV 2030). The National Vision serves as a framework for Qatar to achieve an advanced society providing a high standard of living for its residents by the year 2030. The vision has 4 main pillars, with Qatar National Sports Day, primarily aimed at the pillar of Human Development. The other three pillars of QNV 2030 are Economic Development, Environmental Development, and Social Development.

 

The Human Development pillar specifically states, “The prosperity of any country depends on the health of its people. Qatar aims to build a comprehensive world-class healthcare system that is effective, affordable and universally available to all citizens.” It is common knowledge that leading an active lifestyle with a diet rich in nutrients is vital to one’s health. Yet, urbanization and technical advancements in Gulf countries has resulted in increased obesity in major cities and towns.

 

 

 

Qatar’s National Sports Day also serves a dual purpose. Not only does it aim to supporting the pillar of Human Development, but it also serves to support the pillar of Economic Development. Qatar is increasingly serving as a hub for Sports tournaments in the Middle East. Most famously, the nation will host the 2022 FIFA World Cup. Qatar has also successfully staged the 2006 Asian Games, the 2011 AFC Asian Cup, and the Qatar ExxonMobil Tennis Open, among several others. Qatar’s aim of serving as a regional hub for sports will not only bring the nation name recognition but will also serve as a basis of a domestic and international sports market, supporting both local entrepreneurs and attracting foreign investment.

 

 

(Image Source: Flickr – Jadi)

 

 

2022 World Cup Key Facts
How Qatar Claimed the Asian Cup
Read Blog Detail

Qatar Welcomes Scrutiny from Amnesty International

 

Qatar reiterated its commitment to institutionalizing effective labor reform following the latest report released by Amnesty International. The report, titled “Reality Check,” concludes that the 2022 World Cup host needs to do more to combat labor abuse.

 

The Government Communications Office (GCO) of Qatar responded in a statement saying that:

 

From the outset, we have said that we understood labor reform would be a journey and not an end in itself. We have publicly stated, and restate here, our commitment to labor reform so that Qatar would have a suitable labor system that is fair to employers and employees alike…Far from seeing time as running out, the government of the State of Qatar understands further change is needed and we remain committed to developing these changes as quickly as possible, while ensuring they are effective and appropriate for our labor market conditions.

 

The GCO stressed that the State of Qatar will continue to engage and work with foreign governments, both international and multilateral organizations, and NGOs, to ensure that its labor code meets international standards.The Qatari government response also mentioned the extent to which labor laws and regulations were being enforced. In just the first half of 2018, there were nearly 12,000 companies that were either penalized or banned from operating in Qatar due to labor law violations.

 

Qatar has taken considerable measures to improve both labor rights legislation and the implementation of the legislation. Qatar signed an agreement with the United Nations, International Labor Organization (ILO) to mutually cooperate to both enforce and strengthen Qatar’s legal framework to best protect migrant workers. The ILO has now established a field office in Doha, Qatar’s Capital to assist the nation in administering the reforms. Other recent developments consist of the removal of the exit permit requirement, formally establishing a minimum wage for migrant workers, and the implementation of a Wage Protection System (WPS).

 

Prior to this change in the labor code, workers were required to obtain an exit permit to leave the country. Law No. 13 of 2018, amended provisions of Law No. 21  (2015) and Law No. 1 (2017) that regulated the entry and exit of foreign nationals. Previously, all migrant workers were required to obtain an exit permit from their employer in order to leave Qatar. This move was termed a “huge step” by the International Organization for Labour (ILO). According to the head of the ILO Project Office in Qatar, Houtan Homayounpour, great progress has been made with regards to labour reforms in the country but the work is far from finished.

 

 

 

(Image Source: Argaam)

 

 

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How Qatar Claimed the Asian Cup

2022 World Cup host Qatar has won its first ever regional tournament, the Asian Cup. Qatar defeated the four-time previous winner of the Asia Cup, Japan, with a final score of 3 (Qatar) – 1 (Japan). Qatar controlled the dynamic of the match from the onset with a twelfth minute bicycle kick goal by Almoiz Ali – his ninth goal of the tournament. 15 minutes later, Abdulaziz Hatem, scored again for Qatar doubling their lead. In the 69th minute, Japanese forward Takumi Minamino, brought Japan back into the game with 21 minutes left of the game. Qatari player Akram Afif was able to cinch its lead with a penalty kick goal that was awarded following an accidental handball by the Japanese defense.

 

Qatari goalkeeper Saad el-Sheeb and striker Almoez Ali both received awards for their performances through the tournament. El-Sheeb was awarded the best goalkeeper award and Almoez Ali was awarded both the top goalscorer award and MVP award.

 

Yet, the question remains, “What did Qatar do to pull off this stunning victory?” Over the years, the small peninsular nation has drastically overhauled and improved its soccer establishment as it prepares to take the field in 3 years for the World Cup. The Qatar national team coach, Felix Sanchez Bas, deserves considerable credit for this accomplishment. Bas, a Spanish football manager, has been intrinsically involved in the formation of the Qatari national team and has previously worked with the under-19, under-20, and under-23 teams. Rather than import players, Bas has chosen to focus on Qatari-born and raised players by working closely with Qatar’s Aspire Academy.

 

The academy, a state-of-the-art training facility for young athletes, was established in 2004 and later incorporated into a larger umbrella organization, the Aspire Zone Foundation. The academy has been successful in both building and refining Qatari talent producing the likes of Akram Afif (first Qatari to play in Spain’s La Liga) and Abdulkarim Hassan (AFC 2018 player of the year).

 

 

Felix Sanchez Bas has chosen to focus on a ‘slow and steady’ strategy so that Qatari players can learn how to perform well under intense pressure gradually. At the start of the tournament, Bas committed to “isolate” the Qatari team from any politics at the Asian Cup. Qatar is currently under an illegal diplomatic and economic blockade by Asia Cup host country, the UAE. Since taking on the head coach position in 2017, Bas has focused on playing friendly international games with middle weight countries like Switzerland and Iceland. He stated in a New York Times article that these teams can teach “what it is to play at a high level, how quickly mistakes are punished.”

 

However, the credit for Qatar’s maiden victory at the Asia Cup does not lie solely on Felix Sanchez Bas but also on the players that performed wonderfully through the tournament. Sudanese born – Qatari raised Almoez Ali held the limelight by scoring the most goals for a single player. The teams chemistry and strategy has paid off as they now look forward to playing in Brazil for the Copa America tournament. Qatar has several years left to prepare for the 2022 World Cup and has so far brought its game face to the pitch.

 

 

 

(Image Source: Twitter – FIFA)

 

2022 World Cup Key Facts
Qatar’s Changing Economy & National Vision 2030
Labor Reforms & Migrant Rights In Qatar

 

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Moody’s Issues Government of Qatar Credit Opinion

Introduction: Moody’s is one of three major international credit rating agencies (CRAs) – the other two being S&P and Fitch – that evaluate the Sate of Qatar’s (SoQ) sovereign creditworthiness. These ratings are important for any government’s debt management exercises as they affect the country’s ability to access financing – for fiscal deficits and other external funding needs – through debt capital markets (DCM).

Government-related entities (GREs), such as Ooredoo (telecommunications) and Qatar National Bank (QNB), also benefit from the strength of the SoQ’s credit rating as private creditors use the sovereign’s borrowing spreads as a pricing benchmark for GREs looking to sell bonds.

In other words, rating upgrades or downgrades can lead to materially higher or lower costs of funding. On large multi-billion-dollar transactions – such as the jumbo bond issued by the SoQ in April 2018 – even marginally higher spreads can translate into accrued interest payments in the millions of dollars.

Moody’s uses the following criteria to assess any sovereign issuer’s ability to service its debt:

 

– Economic Strength – Wealth, size, diversification, and long-term potential;
– Institutional Strength – Governance, quality of institutions, and policy predictability;
– Fiscal Strength – Ability to deploy resources to face current and expected liabilities;
– Susceptibility to Event Risk – Risk of sudden risk migration

 

 

 

On 13 July 2018, Moody’s changed the outlook on Qatar’s sovereign issuer rating to stable from negative, citing that “Qatar can withstand the economic, financial and diplomatic boycott by the three neighboring Gulf Cooperation Council (GCC) countries and Egypt in its current form for an extended period of time without a material deterioration in its credit profile.”[1]

 

 

Key Highlights of Credit Opinion:

 

– Current SoQ rating: Aa3 (outlook: stable)

 

– Continued strength of fundamental credit metrics, underpinned by:

 

– Vast hydrocarbon reserves, fueling high export capacity and a dominant global LNG market share (28%);

 

– Exceptionally high per-capita incomes – with a nominal GDP per capita of $69,933 in 2018 (forecast) – allowing for significant shock-absorption capacity and reform flexibility for the government.[2]

 

– Continued progress in the government’s debt reduction (de-leveraging) program is credit-positive. Government debt to GDP (debt/GDP%) has declined from 49% in 2017 to 42% in 2018 and is expected to fall further to 36% in 2019.[3]

 

– The stable outlook is consistent with Moody’s expectation of a declining government debt burden under Moody’s baseline oil price assumption of $75/barrel in 2019 and $65/barrel in 2020.

 

– What could lead to a rating upgrade? Coupled with the government’s de-leveraging strategy, a sustained re-building of foreign exchange (FX) reserves – which were negatively impacted by the blockade – would prompt Moody’s to consider upgrading the rating. According to Qatar Central Bank (QCB) data, FX reserves have increased from $14.8 bn in December 2017 to $29.4 billion in November 2018, an increase of 99%.[4]

 

– During the course of 2019, it will be worth monitoring how Moody’s rating sensitivity will correlate with Qatari policymakers’ steps to build up QCB reserves, strengthen its external position and continue to successfully manage the status quo of the blockade.

 

– Institutional Strength: The Credit Opinion states that “The government’s responses to the GCC boycott imposed in June 2017 demonstrate policy effectiveness and coordination between public sector entities, as well as a strong institutional capacity to manage crises.”[5]

 

– Budget 2019 Highlights: The government is targeting a small budget surplus of QAR4.3 billion (0.6% of projected 2019 GDP), compared to a budgeted deficit of QAR28.1 billion (4% of estimated GDP) for 2018. This will be the first fiscal surplus in 3 years, reflecting higher oil prices. (Brent crude average in 2018 was $72/barrel, compared with $54/barrel in 2017).

 

– Major capital projects – public investments in infrastructure for the World Cup and the economy at large – will continue to account for the lion’s share (43%) of government expenditure.[6] This flows both from the need to complete requirements for hosting the 2022 FIFA World Cup, and from the Qatar National Vision 2030, which prioritizes investments in the building blocks of a modern competitive economy.

 

Qatar’s OPEC Exit: Moody’s does not expect Qatar’s decision “to have any credit implications for the sovereign. Qatar’s reliance on LNG means that OPEC’s decisions on oil supply and their implications for oil prices will continue to have an indirect impact on Qatar’s government and export revenue. For Qatar to no longer be part of these decisions will not change the sensitivity of its credit metrics to oil price fluctuations and will not have material impact on the country’s hydrocarbon production and growth dynamics.”[7]

 

 

 

__________________________________________________________________

[1] Moody’s, “Moody’s changes Qatar’s rating outlook to stable, affirms Aa3 rating,” 13 July, 2018

[2] Moody’s, Government of Qatar: Financials

[3] Moody’s Credit Opinion, “Regular Update: Government of Qatar”, pp.2

[4] QCB Monthly Monetary Bulletin – November 2018 – Table 11, “Total Official Reserves”

[5] Ibid., pp. 3

[6] Ministry of Finance – Qatar

[7] Moody’s Credit Opinion, “Regular Update: Government of Qatar”, pp.6

 

 

 

 

 

Facilitating Foreign Investors’ Access to the Qatari market
Qatar Establishes General Tax Authority
Qatar Leads Gulf Region in Economic Reforms
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Facilitating Foreign Investors’ Access to the Qatari market

 

Legislation to Ease Non-Qatari Capital Access

On 8 January 2018, Qatar issued a new law to facilitate foreign investors’ access to the Qatari market. Known as Law Number 1 of 2019, the new measure is the government’s latest step to open up the economy to foreign capital flows and promote private sector-led growth. The law aims to lower or remove barriers to entry that have previously hindered access to the Qatari market. Using the blockade as an impetus for greater self-reliance, the law expands the investment incentives rolled out by the government to advance a national agenda focused on localizing supply chains in-country.

 

Boosting Industrial Activity

Under the new law, non-Qatari investors can receive government assistance in securing land for setting up their investment and are exempted from customs duties on imports of machinery and equipment necessary for the operation of their companies. Imports of raw materials and semi manufactured goods that are required for production are also exempted from custom duties. Given that industrial machinery, vehicles and electrical machinery collectively accounted for 49% of total imports in 2017, this provision represents a high potential for cost savings.[1] As preparations for the World Cup enter peak construction phase, the law provides a timely incentive for international investors to set up their operations in Qatar and seize on regionally unrivalled opportunities to implement infrastructure projects.

 

Reform Drive and Free Zones

The law builds on existing plans – yet to be legislated – to allow 100% foreign ownership in all sectors of the economy. Currently, full foreign ownership is limited to designated zones. Last year, the government also established the Qatar Free Zones Authority (QFZA) to set the strategic direction and policy of the free zones, as well as securing anchor investments. The free zones will be self-sustaining clusters of enterprise that seek to attract local and international investors through incentives and a “business ecosystem based on transparency and the rule of law.”[2] Two of the zones, Umm Al Houl and Ras Bu Fontas, will be open in the first quarter of 2019 and are strategically located near Hamad Port and Hamad International Airport, respectively. Given the proximity of the zones to a deep-water port and a major airport, spurring a domestic logistics industry is a clear objective of the QFZA. Future zones will also target chemicals, aviation, plastics and artificial intelligence, among other industries.

 

The QFZA will also offer its tenants “doing business” solutions to encourage them to anchor their investments in Qatar, including one-stop shop facilitation for investors, introduction and business network connections, and assistance with work permits and residency permits for their workforce.

 

In-Country Value

Emerging as a post-blockade priority, creating In-Country Value (ICV) is intended to reduce reliance on imported goods and services, build the capabilities of the local population, and attract investment to Qatar to achieve a competitive and resilient economy. Qatar Petroleum’s recently announced ‘Localization Program for Services and Industries in the Energy Sector,’ known as the Tawteen initiative, is a prime example of promoting ICV.[3]

Tawteen is designed to reward suppliers and contractors who execute their contracts and agreements by maximizing local content. The program aims to create around 100 new investment opportunities within the energy sector in order to retain economic value within Qatar, which in turn is expected to add QR 8bn of import substitutes annually and is also expected to create more than 5,000 new white-collar jobs.

Commenting on the program, Qatar’s Minister of State for Energy Affairs, stated that it “aims primarily at helping develop the private sector, particularly small and medium-sized enterprises, which plays an important role in Qatar’s economic development in terms of production, employment generation, and contribution to manufacturing, exports, and GDP.”[4]

 

Self-Reliance Agenda

Although ICV has only recently been discussed as an explicit policy goal in Qatar, efforts to localize supply chains and promote homegrown industries have in fact pre-dated the blockade. Supply chains for the tourism, food security and defense industries, to name a few, have been both diversified and anchored domestically through greater public-private partnership. For instance, Barzan Holdings, an investment management company specialized in the defense niche was incorporated last year with seed funding from the Ministry of Defense. Barzan’s mandate is to provide the financing and business ecosystem for private sector-led innovation in defense and security technologies that will help “empower the military capabilities of the Qatari Armed Forces.”[5] Barzan will essentially serve as an incubator and venture capitalist for cutting-edge defense capabilities to emerge from Qatar and the international market.

Qatar’s new law governing non-Qatari capital is intended to enable the creation of new industrial niches that can both contribute to Qatar’s non-oil GDP and facilitate knowledge transfer to the country.

 

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[1] Qatar Ministry of Development Planning and Statistics

[2] Linkedin – “Qatar Free Zones Authority”

[3] Gulf Times – January 8, “QP to Enhance Localization of Energy Sector’s Supply Chain”

[4] Ibid.

[5] https://barzanholdings.com/en/

 

 

 

(Image Source: Providence Mag)

 

 

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