tag this

Monitoring

Qatari growth up close

By ror y c oe n

w

hy is Qatar’s economy firing so well at the moment? There are many reasons – none more obvious than the government’s fat wallet – but as businesses locate here to cash in on the prosperity, they also come with some anxiety. How will they grow in a market which may be unfamiliar to them? How can they be sure they will make the right decisions? As new enterprises get started, and more established ones push ahead with loftier goals, it’s essential they receive the guidance and expertise to make the hard decisions which promote growth and sustainability. The Qatari government will be watching closely too, of course, as it has an avid interest in private sector growth. The Qatari economy can easily survive on the back of the hydrocarbon sector, but this is the antithesis of what the 2030 National Vision is all about. As Qatar sprints forward, it needs every sector of the economy punching its weight and this is why it is critical that these companies get the qualified advice they need. Jamal Fakhro, Chairman of KPMG’s Middle East and South Asia sub-region and managing partner of its Qatar and Bahrain practices, never believed that the country could elevate itself to its current position. The government seems to be playing its cards right, but a country as young as Qatar – which really only started to develop in the mid-nineties – must be mak-

ing a lot of mistakes as well? “Qatar is in expansion mode, so it’s normal to make mistakes,” said Fakhro. “The most important thing is to analyse the mistakes and correct them quickly – use the mistakes for long-term benefit. One area where I believe the country is focusing well, and has to continue into the future, is the area of education and the preparation of Qataris to take responsibility for the future of the country. Today we see lots of Qataris take the important positions in the private sector. Not so long ago, they would only work for the government or Qatar Petroleum. The country should be run by its own people.” Unfortunately, expensive mistakes are the premium when starting a new project – whether it’s a new country or a new business. Fortunately, there are experts and experienced personnel available to alleviate the number and the impact of these mistakes, and they work with both the government and the private sector. The country has experienced massive growth in recent years regardless of any errors made, and although the oil and gas sector has slowed a little due to external issues, the Qatari economy is still expected to witness robust growth of up to 8% due to the booming construction sector, which is very encouraging. Another sector is able to pick up some of the slack. Serious growth ahead Qatar started to develop itself in the mid-nineties, around the same time that KPMG brought its services

64 Qatar today

october 2012

tag this

“the government has been pouring money into the country and companies here are attracting top-Quality personnel to really add value to their products. all the success factors are in place – money, a leadership strategy, a clear vision – and it has been successful with its strategy to date.”

Jamal Fakhro
Chairman of KPmG’s middle east and south asia sub-reGion

here. Since then, the company has been helping businesses to redesign their practices, taking their ideas from the drawing board to the real world. It advises about getting ahead of the competition and avoiding costly errors, and provides a framework for sustainability. These services help businesses mitigate risk, improve performance and create value. These are qualities which drive a good business and a good economy. “KPMG has doubled in size here in the past four years and we definitely see ourselves continuing to grow with the economy,” Fakhro continued. “If you don’t grow with the economy, then you aren’t being a major player. We see ourselves as a major player – we are looking for more staff, partners, directors and senior managers, because we believe the market is in need of our services. It would be flippant of anybody to assume that the economy isn’t going to grow further. The government has been pouring money into the country and companies are attracting top-quality personnel here to really add value to their products. All the success factors are in place – money, a leadership strategy, a clear vision – and it has been successful with its strategy to date. If you had sole market share of a particular segment five or ten years ago, the chances are that this is no longer the case. There is a huge drive within the government to promote entrepreneurship and SMEs, which are the backbone of most economies. New businesses are getting remarkable practical, financial and advisory services to get off the ground, which means it’s a competitive marketplace in Qatar now. “You cannot continue to compete in this market, you cannot be attractive, unless you can be the equivalent or better than your competitors,” said Fakhro. “In the past ten years there has been an influx of contracting companies, hotels, businesses, banks, insur-

ance companies. Everyone can do business, everyone can invest, and nothing is closed. “I would expect, aside from oil and gas, that services such as banking and insurance companies will bring more growth to the economy. Competition brings a much better brand of service. The country is able and will continue to be able to pour money into the economy, and whether we like it or not, in this part of the world governments are the major players in economies.” GCC and further afield Talking about this part of the world, how is Qatar holding up against its peer states in the GCC? Is it following similar strategies or is its focus elsewhere? “Taking into account the size of the countries and their respective populations, and where it has come from in a short period of time, Qatar could be number one or two in the region in terms of spending progress and development. Its strategies are clear – we can see clearly that they know exactly what they what and what sort of role they want to play in the region and on a global scale. “I think Qatar’s investments outside the country are very wise, and this comes from a risk management point of view to ensure they don’t put all their eggs in one basket. There are lots of countries which will bring great return on long-term investment, so they are preparing themselves should there be a drop in the price of gas in the future, i.e. they have alternate revenue off investments, either for capital appreciation or for dividends to be used to support the economy. Qatar’s focus is clear: they are spending for specific goals and for specific international commitments, but at the same time are saving a lot through their investments abroad”

october 2012

Qatar today 65

Sign up to vote on this title
UsefulNot useful