The competitiveness of Qatar - should I take my business there?

The World Economic Forum’s (WEF) annual publication, the Global Competitiveness Report (GCR), ranks economies’ competitiveness based on 11 categories of indicators, called ‘pillars’. Each pillar, e.g. Higher education and training, Infrastructure or Business sophistication, consists of several indicators. Economies are given a score from 1 to 7. Additionally, economies can be in one of five stages of development. These stages, from least to most developed are: Factor driven, Transitioning from Factor driven, Efficiency driven, Transitioning from Efficiency driven and Innovation driven. The report also presents a list of “The most problematic factors for doing business” for each economy, based on respondents engaged in business in the economies in question.

In the GCR 2011-2012, Qatar is ranked the world’s 14^th most competitive economy (rank 17 one year ago, 22 two years ago). For comparison, Finland is ranked 4^th and is an Innovation driven economy. However, regardless of Qatar’s high rank and GDP per capita, it is still regarded as being in the second stage of development, transitioning from a Factor driven economy to Efficiency driven. The high overall rank reflects the country’s eagerness to become a hub of business and innovation. Qatar ranks well above other economies in the same stage of development (see figure below), only showing equal results in the pillar for Market size, which is understandable due to its small population and geographical area. Indeed, the measures the Qatari government is taking to boost its competitiveness are ahead of its stage of development. Other economies, who have wanted to rapidly attract businesses and boost national competitiveness in the past, have taken similar measures.

The most problematic factor for doing business in Qatar is ‘Restrictive labor regulations’. Firing employees is considered expensive for the employer, and the ratio of women to men in the labor force is very low. The factor ranked second most problematic is ‘Access to financing’. The third most problematic factor is ‘Inadequately educated workforce’, but this factor is not experienced as problematic by nearly as many respondents as the first two. It would behoove businesses planning to enter Qatar to take these factors into account. No doubt Qatar has to address these issues if they persist.

Overall, based on the WEF GCR 2011-2012, Qatar offers an attractive business environment. 

Source:

World Economic Forum. Global Competitiveness Report 2011-2012. p 302. Qatar Country Profile. Accessed from http://www3.weforum.org/docs/WEF_GCR_Report_2011-12.pdf