Qatar is well-positioned to embark on localisation journey for which it should enact in-country value (ICV) initiatives to diversify and develop the local economy and strengthen the resilience of the national supply chain, according to PricewaterhouseCoopers (PwC).
"With a wealth of natural resources, a strong talent pool, and a promising upcoming agenda, Qatar can use this to its advantage to ultimately enhance the sustainability and resilience of its economy. However, the foundation must be reinforced to ensure a successful implementation of ICV in Qatar," PwC said in a report.
Stressing that Qatar should take advantage of lessons learned from countries with similar challenges; the report said, "It should enact ICV initiatives to diversify and develop the local economy and strengthen the resilience of the national supply chain."
Finding that to date, there is not a country-wide formula that defines “what” and “how much” is local; PwC said the first step in implementing ICV for Qatar is to define a formula which calculates ICV across the end-to-end value chain for goods and services.
The ICV, according to PwC, helps Doha continue reducing reliance on imported goods and services, building capabilities of the local population, and attracting investment to Qatar to achieve a competitive and resilient economy.
"Effective local content policy has become a key factor in driving economic growth and diversification across the region, and where countries continue to spend billions of dollars on infrastructure projects. ICV will impact both public and private entities in Qatar, and will have a role to play in maximising local content in the provision of goods and services,” said PwC’s Qatar country senior partner, Bassam Hajhamad.
Qatar must ensure that the local capabilities are equipped with the proper knowledge, tools, and knowhow prior to shifting critical spend back to Qatar, PwC said, adding countries around the world, which have pushed ICV, have undergone a prioritisation activity to develop a localisation roadmap of goods and services.
This allows countries to focus on “critical” and “possible to localise” items rather than localising the full spend. It is imperative to focus on specific categories of goods and services when localising spend and ensure that the local supply base is prepared to take on the additional capacity.
It is imperative that Qatar fosters a “business-friendly” environment to enhance the ease of doing business and attract foreign investment, the report said.
Once the vision and enabling environment is put in place, Qatar must introduce a strong governance model, it said, adding governance of localisation initiatives is critical to the implementation, the sustainability of the programme, and the resilience of the country.
Although there is different localisation governance models used around the world, each country has put in place an entity to drive, monitor, and enforce the ICV agenda across industries.
Without a proper governance model, Qatar may risk introducing a programme which businesses view as another “tick in the box", it said.