Qatar is an economy successfully built for decades over its oil and gas industry. Nevertheless, for the past few years, the country is driving to a more diversified one. Several agencies from the government and the private sector, depict a new set of industries they want to develop and new markets they want to conquer.
The ecosystem of trade and investment institutions dedicated to consolidating a policy of diversification is more robust nowadays. Along with the ministers in charge of guiding industrial policies, there are specific efforts aimed to strengthen them.
Qatar Financial Centre, the Qatar Free Zones Authority, Manateq, and the Qatar Science and Technology Park are working to attract Foreign Direct Investment (FDI) in order to create specific hubs in spheres such as sports, financial services, IT, logistics, health, hospitality, infrastructure, food security, amongst others, taking advantage of the new investment law (recently approved), better incentives, and other measures that ease doing business in Qatar.
The cherry on top of this virtuous circle is the establishment of Qatar Investment Promotion Agency (IPAQ). In July 2019, the government announced the launching of an agency aiming at attracting FDI, being the door for companies worldwide to access investment solutions as well as being the face of Qatar when it comes to promoting the perks of investing here.
It is likely to see in the near future a better performance in key indicators with this ecosystem of agencies and institutions being enforced. Qatar is ranked 77 out of 190 countries in the “2020 Doing Business” by the World Bank. In the 2019 World Competitiveness Report, prepared by the World Economic Forum (WEF), Qatar ranks 29th, second highest in the region. We might expect these indicators to perform better in the following years, given a strong set of tools to foster the country’s conditions to grow bigger in the frame of Qatar National Vision 2030.
On the other hand, there is also an aggressive policy of internationalization. Through its sovereign fund, Qatar Investment Authority (QIA), and the national oil company, Qatar Petroleum, the country has expanded and diversified its stakes worldwide. A very intelligent approach to invest abroad seems to have its dividends, distinguishing regions in order to find the best opportunities in each one, given the fact that there are unexplored ones worth looking after.
In this context, the relation between Qatar and Latin America can be profitable for both parties, as it has shown in the past few years. One of the most relevant bets of Qatar Petroleum, for example, has been its incursion to markets in Mexico, Brazil, and Argentina, partnering with other oil and gas titans like ENI (form Italy) Shell (from the Netherlands), Petronas (from Malaysia), Chevron (from the USA) Total (from France), amongst others. It is expected that these investments can grow over the years, as it is one of the most attractive sectors in the region.
It is no secret that Latin America is attractive for investment stakeholders. We have seen the president of Brazil showing opportunities to Qatar for more than 400 million USD; or Mexico, presenting an ambitious infrastructure plan for the next five years to QIA. The region is becoming more and more integrated between each other and with other regions. The Pacific Alliance or the Comprehensive and Progressive Agreement for Trans-Pacific Partnership are good examples of it. In the case of Mexico, USMCA, the agreement that will substitute NAFTA, is an empowered gateway to USA and Canada. In my point of view, the relation when it comes to trade and investment, is a win-win equation with a long-lasting perspective.
In this weekly column, I will address how Qatar is approaching its strategy to foster trade and investment ties with a region of developing countries willing to open their economies to new markets. At the same time, I will give insights on the rationale of these Latin American countries when turning their ayes to the Arabian Gulf, specifically to Qatar.
Long distance between Qatar and Latin America has always been raised when discussing bilateral relations. Thou, the distance is starting to come to an end, mainly because the willingness of all parties have shown how relevant can be a strategic partnership now that world integration has become a path to building strong global chain-value oriented industries.