Backed by the government’s diversification efforts, Qatar’s industrial sector is steadily forging ahead amid the ongoing economic blockade imposed by the Gulf neighbours in June 2017, according to a recent report.
In its ‘The Report: Qatar 2019’, Oxford Business Group (OBG) said efforts to diversify the country’s industrial sector have helped insulate Qatar’s economy from the effects of the two-year old blockade.
Similarly, recent changes in public policies, privatisation of the industry, investment incentives, and reforms to boost FDI inflow, among other measures, have contributed to the development of this sector.
OBG reported that the country’s rich natural gas reserves have enabled it to diversify vertically into petrochemicals and energy-intensive segments, such as steel and aluminium, but those petrochemical, chemical, and metal commodities have often been subjects to price fluctuations on global trading markets that mirror the volatility characteristic of petroleum prices.
“The blockade imposed on Qatar by Gulf neighbours and traditional trading partners, Saudi Arabia, Bahrain, and the UAE have pushed the country to adapt, survive and thrive by re-engineering import and export routes, while also kick-starting growth in the agriculture and food manufacturing industries.
“It has, however, also left current and prospective investors facing significant challenges in developing products that can serve alternative export markets beyond Qatar’s 2.7mn residents,” OBG said.
The report said Qatar is moving to implement a series of reforms that will give private investors more freedom to participate in industrial production. Also, Qatar is seeking to be self-sufficient in the field of agriculture and in the defence sector, OBG said.
According to OBG, the industrial sector has demonstrated ample ability to adapt to and overcome challenges posed by the economic boycott imposed by some of its traditional trading partners.
“Qatar is looking further afield and creating fast shipping lanes to connect it with other parts of Asia.
“In addition, key downstream industries are poised to receive a boost to the volumes of chemicals, plastics, petrochemicals and metal products they are able to manufacture with the planned expansion of the North Field,” OBG said.
The report added, “Qatar’s industries have an inherent advantage in that they do not have to worry about potential shortages in the gas to power plants or the feedstock to fuel crackers.
“There is optimism that those larger petrochemicals facilities, steel mills and aluminium smelters will develop specialised manufacturing verticals that will create new products for Qatar’s domestic market and new global trading partners.”