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Despite the ongoing trade blockade and in anticipation of hosting the Fifa World Cup in 2022, Qatar has announced plans for two new special economic zones. Alex Irwin-Hunt reports.  

Qatar is due to open two special economic zones (SEZs) in 2019, as a “starting point for communication between Qatar and the global market”, minister of state and chairman of Qatar’s Free Zones Authority (QFZA) Ahmad Al Sayed told the International Products Exhibition and Conference in October 2018.

The first SEZ, Umm Al Houl in Doha, spans an area of 30.3 square kilometres adjacent to Hamad International Port, and will be ready to receive local and foreign investors during the first quarter of 2019.

The second SEZ, Ras Bu Fontas in Doha, covers an area of 3.96 square kilometres next to the Hamad International Airport, and will facilitate cargo operations and associated businesses by having a gate connected to the airport, featuring advanced technologies.

“Qatar is ideally equipped to serve as a testing ground for disruptive technologies, by which I mean technological innovations as diverse as blockchain, drones, the Internet of Things and AI,” says QFZA deputy CEO Abdulla Al Misnad. “Innovators in these areas can benefit from Qatar’s strong technological infrastructure, including a range of world-class universities and vocational training centres. With continued high investment and economic growth, there’s really never been a better time to invest in Qatar.”

Blockade avoidance

The SEZs are part of Qatar’s plan to liberalise its economy following the land and sea blockade imposed on it by Saudi Arabia, the United Arab Emirates, Bahrain and Egypt since June 2017. The chairman of business organisation Qatar Chamber told Qatari newspaper The Peninsula that 21,000 companies were established in in the country between the start of the blockade and the end of August 2018.  

“FDI is the most prioritised agenda item for every politician in the country. Enhancements would not have happened without the blockade,” says Qatar Financial Centre CEO Yousef Al Jaida.

The risk of loss of capital caused by the regional blockade on Qatar has mostly abated following “the recovery of foreign reserves and the return to a current account surplus” in 2018, according to the Economist Intelligence Unit (EIU). The EIU also says that an increase in oil and gas export revenues has led to a strong fiscal position, and that the devaluation of the Qatari riyal remains unlikely because there are sufficient Qatari Investment Agency reserves to maintain the currency peg to the US dollar for several years. 

Since the blockade began, Qatar has allowed visa-free entry for citizens of 80 nationalities, approved 100% foreign ownership in certain local sectors and increased foreign ownership on listed companies on the Qatar Exchange from 25% to 49%.

Qatar’s National Vision 2030, a programme targeting economic, social, human and environmental development in the coming decades, is also well under way. “QFZA’s strategy for the free zones is aligned with the ambitious goals of Vision 2030, particularly in regard to diversifying the economy,” says Mr Al Misnad.

Ready for kick-off

Given that Qatar is due to host the Fifa World Cup in 2022, the introduction of two SEZs in 2019 fits with the larger plan to affirm Qatar’s position as an open and outward-looking centre for business in the Middle East and beyond.

Qatar’s World Cup preparations are well in hand. “[We are] building a full metro system in Doha, deepening Qatar’s port infrastructure, major IT and cybersecurity projects and of course constructing the state-of-the-art sporting facilities themselves,” says Mr Al Misnad. “These projects will improve Qatar’s infrastructure, not just for the World Cup, but over the long term, for the benefit of all investors in Qatar.”

This article is sourced from fDi Magazine
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