Qatar and Germany can build on existing opportunities to bolster trade and investment relations, HE the Minister of Economy and Commerce Sheikh Ahmed bin Jassim bin Mohamed al-Thani stated at the first session of the Qatar-Germany Business and Investment Forum in Berlin on Friday.
“There should be additional efforts to achieve a trade balance between the two countries,” he urged at the high-profile event, according to a statement issued by the Ministry of Economy and Commerce.
Dr Ulrich Nussbaum, Germany’s Federal Minister of Economic Affairs and Energy; Sheikh Khalifa bin Jassim bin Mohamed al-Thani, chairman of Qatar Chamber; HE Sheikh Faisal bin Qassim al-Thani, chairman of the Qatari Businessmen Association; Salman Kaldari, chairman of the Single Window, and Khamis Ahmed al-Mohannadi, chairman of the Private Sector Development and Support Committee, participated in the session along with a number of Qatari and German officials, businessmen and representatives of major companies.
Sheikh Ahmed touched on German-Qatari bilateral trade and investment ties, highlighting the most recent economic indicators and achievements of both countries.
He noted that Doha and Berlin have more than 60 years of commercial relations, marked by collaboration and partnership agreements in the economic, science, education, technical training, research and development, and new and renewable technologies fields.
Over 44 years of diplomatic relations have positioned Qatar as a key partner of Germany in the Middle East and North Africa region, the minister pointed out.
Qatar and Germany have signed several agreements and memoranda of understanding, including those on the promotion and protection of investments, in the areas of sports, health and media, in addition to the fields of archaeology, solar energy, cultural, industrial, commercial, civil aviation and air transport.
Both countries have also signed an agreement on the establishment of a joint committee for trade, economic and technical co-operation, the minister said.
The committee has so far convened for five sessions, with the fifth taking place in Doha in the last quarter of 2016.
These ties reflect positively on the Qatari-German bilateral total trade exchange, which has been steadily increasing year-on-year, reaching approximately $12.6bn over the last five years.
Qatar is now positioned as Germany’s 11th largest trading partner, and Germany was the third largest destination for Qatar’s imports in 2017.
Qatar's significant investments in Germany represent another key reason to expand investment relations and extend the long-term economic and financial co-operation between Doha and Berlin, Sheikh Ahmed said, noting that Qatar Investment Authority (QIA) has invested about $25bn into vital projects in the automotive, IT and banking sectors.
On the other hand, over 304 German companies are currently operating in Qatar, including 45 companies that are 100%-owned by German investors, in addition to 259 joint Qatari-German companies. These firms are involved in the development of railway, road and infrastructure projects, as well as the service industry, trade, contracting, telecommunications and medical equipment, among other fields.
The minister highlighted that Qatar Airways operates around 35 weekly flights to Germany, including 14 each to Munich and Frankfurt, seven to Berlin, and seven weekly cargo flights to Frankfurt. This has reflected positively on bilateral trade and tourism, as demonstrated by the 25% year-on-year increase in the number of German tourists visiting Qatar, reaching 45,000 in 2017.
Touching on the resilience of the Qatari economy, Sheikh Ahmed said Qatar had weathered the unjust blockade imposed on the country in 2017, noting that the strong recovery in global energy prices, thanks to diminishing supply and rising global demand, has bolstered domestic growth performance.
Qatar has also managed to establish direct commercial lines with a number of strategic ports that now represent key trading partners. Along the same lines, Qatar is utilising its world-class facilities and hi-tech logistics in activating regional agreements with Kuwait, Iraq, Oman, Turkey, Iran, Pakistan, Azerbaijan and other countries in central Asia.
Through these agreements, Qatar aims to expand its trade activities by establishing a sea fleet that connects the nation with its major trading partners around the world, targeting a market comprising 400mn people in its first stage.
Sheikh Ahmed explained that the wise policies adopted by the state, which stimulated all sectors of the economy to achieve increased productivity, have reflected positively on the nation’s economic performance. Qatar’s economy continued its impressive performance during the past year, he said, confirming that the country was not particularly affected by the blockade.
In 2017, Qatar's gross domestic product (GDP) rose at constant prices to $221.6bn, compared to $218bn in 2016, – a better than expected growth rate of 1.6%.
Non-oil real GDP grew at a reasonable rate of 4.2% in 2017 despite the unjust embargo imposed on Qatar, Sheikh Ahmed said, adding that the non-hydrocarbon sector's share of GDP increased to 51.8% in 2017 compared with 50.5% in 2016.
The transfer and readjustment of economic activities has also breathed life into the manufacturing, trade and construction sector, which rebounded strongly in the second half of 2017. Sheikh Ahmed also noted a recovery in the wholesale and retail sectors in the fourth quarter of 2017, which reflects the resilience of Qatar’s economy to volatility, thanks to the diversification strategy endorsed in recent years.
The opening of the new Hamad Port, one of the country’s leading integrated infrastructure projects, has also played a key role in facilitating foreign trade and addressing the negative consequences of the unjust siege, he noted.
Quoting the latest report released by the World Bank, the minister said that Qatar’s real GDP growth is expected to increase to 2.8% in 2018, the highest among GCC countries.
Sheikh Ahmed added that the annual inflation rate in the consumer price index (CPI), declined to 0.5% in 2017 from 2.7% in 2016, reflecting lower rental fees in addition to reductions in food prices.
Qatar's foreign trade sector witnessed remarkable growth last year, with trade volume increasing by 16% to $103bn in 2017, he said.
All these positive indicators, according to Sheikh Ahmed, show that Qatar has overcome the challenges arising from the blockade by enhancing its economic competitiveness and cementing its position as an attractive investment destination.
Elaborating on the legislative and legal frameworks that Qatar has adopted to stimulate investments, the minister said a significant number of laws and regulations have been revised to keep abreast of political and economic developments in the region, as well as to meet the requirements of the Qatar National Vision 2030 and to encourage domestic and foreign investments.
For instance, Foreign Investment Law No. 13 of 2000, enables foreign investors up to 100% ownership in numerous economic sectors, he said, stressing that a new law will streamline investment procedures in light of the many promising investment opportunities in the logistics, food security, education, health, tourism and sports sectors.
Currently, and within the framework of the National Development Strategy 2017-2022, additional organisational and institutional reforms are being undertaken to encourage foreign direct investments, Sheikh Ahmed said.
These reforms enable the Ministry of Economy and Commerce to play a key role in terms of approving foreign investment, reviewing Qatar’s legislative frameworks to remove restrictions on access to priority sectors, and revising the legislative framework of the current investment law to further protect investors’ rights in relation to capital movement and property expropriation, while guaranteeing that foreign and local investors are treated equally in accordance with the law, he said.
Sheikh Ahmed added that the Ministry will also seek regulations and legislation that are consistent with international best practices.
The amendments that the state introduced to the Free Zones Law represent an important step in strengthening Qatar's position as a leading investment destination in the region.
The new law provides many advantages and incentives for investors. These include allowing foreign investors up to 100% ownership, eliminating restrictions on capital origin, the freedom to choose the legal entity of a project, exempting capital assets, required production material, exports and imports of taxes and fees, which will in turn streamline the flow of goods and services from and to Qatar.
The free zones constitute a one-stop shop for all licences required by investors, who are only required to seek the approval of the Free Zone Authority.
Touching on trade openness between Doha and Berlin, Sheikh Ahmed expressed his confidence that Qatar will become a major international business hub in the region across all fields including trade, industry and services.
On the private sector front, the minister said the sector proved resilient amid economic challenges, noting that Qatari companies seized the opportunities that the government offered to increase their contribution to Qatar’s development.
The government had allocated QR93bn (€21.9bn) in its 2018 budget for the development of major projects relating to the FIFA 2022 World Cup, health, education, and transport among others, he said.
These figures indicate the productive partnership between the public and private sectors, in addition to the key contribution of private investments in the development of Qatari economy, Sheikh Ahmed stressed.
Public-private partnership projects are not new to Qatar, the minister explained, noting that the state had previously introduced such initiatives across various sectors including the energy and water sectors. Qatar has continued to undertake such partnerships over the years, and is now aiming to extend PPPs to the infrastructure, sports, education, health and government services sectors.
Qatar is currently developing a legal and institutional framework for PPPs in accordance with best international practices, Sheikh Ahmed said, explaining that this framework has been designed specifically to accelerate and facilitate the implementation of PPPs in Qatar, as well as to streamline the implementation of economic and social infrastructure projects, whether by domestic or foreign investors.
A Public Private Partnership Law has been drafted and is currently being adopted, he explained, noting that the law will also contribute to enhancing government support for PPPs and establishing a clear legal framework based on a more efficient and transparent procurement process.
The ninth edition of the Qatar Business and Investment Forum featured five working sessions attended by high-level government officials, businessmen and representatives of major companies from both countries. The sessions touched on efforts to enhance bilateral economic and investment co-operation including growth indicators of a truly successful partnership, co-operation in the financial sector, the promotion of industrial co-operation between Doha and Berlin to contribute to the diversification of income sources, in addition to the promotion of investments in Germany and bilateral co-operation in the fields of tourism, health and sports, especially in relation to the FIFA 2022 World Cup.
The forum also featured bilateral meetings between Qatari and German businessmen, during which participants reviewed investment opportunities in both countries and discussed mechanisms to bolster long-term economic co-operation between Qatari and German companies.