Business and Economics: Qatar

Executive Summary

The State of Qatar is located in the western part of Asia. This country is a sovereign Arab emirate. It is essential to underline that the State of Qatar is considered to be one of the most influential and strong countries in the Arabian world. It occupies a Qatar Peninsula and is a former colony of the British Empire. The State of Qatar is an absolute monarchy and it presents a significant sample of moving from a poor colony to the country which occupies a wealthy and influential position on the global scale in the current course of time.

The paper provides a profound insight into domestic as well as international performance of the country in the current course of time. Moreover, it deals with the process of investigation of strengths and weaknesses and presentation of the perspectives the country tends to have in the course of future development.

Countrys Macro Environment

Country Description: The State of Qatar is a famous center of pearl-fishing in the past. Furthermore, this country may be regarded as one of the poorest states within the Gulf territory. According to Qatar Profile (2013), Qatar is now one of the richest countries in the region, thanks to the exploitation of large oil and gas fields since the 1940s. Dominated by the Thani family for almost 150 years, the mainly barren country was a British protectorate until 1971, when it declared its independence after following suit with Bahrain and refusing to join the United Arab Emirates.

Qatar is one of the most advanced, wealthy and sufficiently influential country in the current course of time. Furthermore, this tendency is observed to have numerous significant perspectives for the future development. Such a tendency was observed 9 years ago by BI-ME Staff (2005): The Report focuses on the challenges of improving the region’s competitiveness at a particularly critical time. To remain viable in the global economy in areas other than the energy sector, Arab countries will need to significantly raise their levels of competitiveness. In the course of the next 9 years the level of competitiveness has been significantly increased. The record of numerous achievements in the sphere of economics as well as in the scope of international relations confirms this assumption.

Political Situation: One of the basic and predetermining for the whole course of development of Qatar as independent and perspective country stages of political situation is the period of political domination of Thani family. The Thani ruled on the territory of the State of Qatar for approximately 150 years and left significant heritage for further development of the country.

According to Qatar Profile (2013), the mainly barren country was a British protectorate until 1971, when it declared its independence after following suit with Bahrain and refusing to join the United Arab Emirates. In 1995 Crown Prince Hamad bin Khalifa deposed his father to become emir and since then he has introduced some liberal reforms.

The current political situation within the country is more perspective as well as quite stable. Sheikh Tamim bin Hamad al-Thani is a monarch who is reigning the State of Qatar in the current course of time. The throne was inherited by Sheikh Tamim bin Hamad al-Thani from his father in 2013. It is essential to underline that the fact of throne inheritance in such a consistent, relevant and planned manner is quite unusual in the State of Qatar. The reason is that the majority of Qatar leaders tend to reign for life. Though, orderly and constrictive transfer of actual power, for example, is regarded as positive tendency for further development of the country.

The political situation on the territory of the State of Qatar is predicted to remain quite reliable and stable in the nearest future. Furthermore, certain changes of supreme importance in policy are unlikely to be introduced by the new emir. Despite a lack of political participation, there is little risk of social unrest as experienced in North Africa or Bahrain, largely because the government has ensured that Qatari citizens benefit from the countrys huge hydrocarbon wealth. Qatar, thus, does not face the unemployment and poverty issues seen in the Arab countries in transition (Qatar, 2013).

Moreover, it is significant to underline the pre-emptive steps which had been taken by the government of the State of Qatar in order to prevent the potential probability of emergence of political discontent within the country. These preventive measures had been taken by means of allowing the elective process for an Advisory Council that was characterized by sufficiently limited legislative powers.

Thus, the scope of politics in the contemporary State of Qatar presents positive dynamics in the course of development as well as stability and reliability. The qualitative alterations in the concept of power transfer present the introduction of a new era in political life.

Legislation Affecting Inward Foreign Investment:

The basic element of supreme significance in the course of any successful business venture is reliable and beneficial legislation background as far as the law aspect provides proper and relevant condition for the establishment of a new business venture as well as for its further development. It is essential to underline that Qatars growing stance over the GCC provides numerous relevant and favorable opportunities and perspectives for the new business ventures. Furthermore, the opportunities appear to be within the local market as well as on more global scale.

According to Qatar (2014), Launching a business takes eight procedures and slightly more than a week. However, despite some progress, completing licensing requirements continues to be relatively time-consuming. The labor force consists primarily of expatriate workers, and immigration and employment rules are relatively flexible. The government does not mandate a minimum wage.

Economic Conditions and Stability: The overall positive and perspective level of stability within the State of Qatar has been proved and illustrated by means of the aforementioned data.

Actually, positive predictions and expectations have a tendency to appear every year. The basic reason for this tendency may be considered apparent positive dynamics of economic development within the State of Qatar as well as significant steps which are regularly taken by the government. One of the most essential, profitable and perspective trends of the whole economic development is the process of significant improvement in the course of internal terms of trade within oil and gas sectors.

Furthermore, the overall level of the manufacturing growth in the State of Qatar is expected to alter to certain extent. Actually, a dramatic increase in the course of its growth is not expected in 2014, but the result of 7.6% growth is considered to be quite realistic and proper provided; all the trends will remain beneficial and perspective. Permanently increasing demand for cement and metals that is observed in the field of construction is expected to sustain the overall level of manufacturings growth.

According to Qatar Economic Outlook 2013-2014 (2013), Qatars economy is expected to expand by 5.3% in 2013 (slightly down from 6.2% in 2012) and by 4.5% in 2014. Despite this expansion of aggregate income and output, per capita GDP is set to decline as a result of fast population growth and of slowing labor productivity.

Thus, the economic development and stability are consistent, gradual and perspective in the State of Qatar in the current course of time.

Cultural Issues: The cultural issues in Qatar appear to be quite controversial and complicated in the current course of time.

According to the investigation and sheer observations of Katz (2013), the State of Qatar is considered to be in sufficiently threatening crisis. The author defines it as A crisis borne of native vulnerability and imported menace. Like all crises, this one harbors both danger and opportunity. The danger is clear enough. The opportunity is to introduce remedial programs and policies at a pace and scale commensurate with the threat. A small country of less than 2 million with a highly centralized authority, Qatar can, in theory at least, do this. The healthy way of life is absolutely abandoned in the State of Qatar.

One more significant and apparent new trend in the course of cultural development in the country is a strong level of femininity within the Qatar cultural dimension. The issues of quality and equality of life are considered to be stressed sufficiently in the current course of time by means of numerous feminine societies and organizations. Thus, the level of culture is quite contemporary and advanced, but it obviously lacks positive and perspective trends.

Factor Endowments

The aspects of business performance and its subsequent success depend on a certain sequence of factors. These factors may be internal and external. The internal factors deal only with the inner construction, philosophy and business plan of the business venture; whereas the external ones are provided by the market environment, general conditions of business performance, counterparts and rivals impact, etc. The external factors which predetermine perspectives, competitiveness and demand of the chosen field of industry and the selected type of business performance may be united into two basic categories and can be classified as basic and advanced factors.

The basic data that should be taken into account comprises information about the geographical location of the country and all subsequent ramifications of this location. All the basic factors are quite positive and perspective, except the distance of the country which is a serious drawback for regular and timely business performance.

Advanced factors comprise all those aspects and elements which are obligatory for a contemporary business venture to be competitive and succeed within the contemporary market. The State of Qatar possesses primarily all the beneficial advanced factors providing that the level of stability and efficiency of overall performance remain the same. For instance, the following aspects confirm the competitiveness of Qatar on the world wide scale:

Qatar is the worlds third largest producer of natural gas, accounting for one third of the worlds proven reserves, as well as the largest exporter of liquefied natural gas (LNG). Moreover, it provides 2% of global oil supply. The country has successfully translated this resource wealth into economic wealth. With a GDP per capita of USD 91,000 Qatar is among the richest countries in the world (Qatar,2013).

Analysis

Benefits: one of the most relevant and significant benefits for the establishment of a new business venture within another country is human factor. The State of Qatar will provide a new business venture both with professional and ambitious employees and significant audience of customers. Furthermore, such factors as external financing system, essentially high GDP per capita as well as positive dynamics increase in terms of the growth performance.

Costs: the overall financial expenses may appear quite high as the result of distance as well as of quite high and wealthy way of life in the country. Though, the investment and further development of a new venture are considered to be very perspective and efficient, properly and effectively developed business plan is provided.

Risks: Risks are to be considered on the preliminary stage of business plan development. It is necessary to take into consideration all the drawbacks, obstacles and weaknesses of the country that has been chosen. According to Qatar (2013), the key weaknesses of the discussed country as a target for the investment and development are:

High dependence on hydrocarbon sector.

Limited monetary policy flexibility.

High lending concentration in the real estate sector.

Recommendation & Conclusion

The profound and thorough analysis of the economic, political as well as cultural aspects is provided in the paper. These factors sufficiently predetermine the development and perspective aspects of a particular new business venture and financial investment in general.

Thus, the State of Qatar is worth being invested in. It has proper background for the investment and business performance as far as the economics is stable and efficient whereas political situation may be characterized as relevant and beneficial. The aspect of distance may result in significant financial expenses, but they may be compensated in the course of successful and profitable business performance.

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