Qatar on competitive edge

Qatar holds a distinguished position in the world today as it remains the most competitive economy in the Middle East. The World Economic Forum's Global Competitiveness Report for 2011-2012, which ranks the world's fastest growing economies, has placed Qatar on the 14th spot, up three notches from the previous year, surpassing many other countries in the region such as United Arab Emirates (UAE), Bahrain and Kuwait.

There are many factors that augur well for Qatar's strong position in the global economy today. The country boasts of having a highly sophisticated business environment, and figures well in terms of innovation and ability to curb corruption and crime. However, there are many challenges that Qatar needs to hurdle – restrictive labour regulations, insufficient access to financing, and an inadequately trained labour force, the report further stated.

Highest construction cost in the region
Even whilst Qatar's economy is projected to encounter a slowdown at the end of this year due to external factors that can affect the prices of oil and gas, the booming construction sector will save the day, according to another report by the KFH-Research. In 2011, Qatar's real GDP growth expanded by 17.6% as a result of the substantial increase in liquefied natural gas (LNG) production. The GDP growth rate is expected to be moderate in 2012 but most analysts expect a robust performance of not lower than 8%.

Qatar's construction industry is set to maintain its top position as the region's best performing markets, growing at 9.5%, according to a Business Monitor (BMI) forecast. In its third quarter, 2012 infrastructure report, it noted that $150 billion worth of construction and energy projects are being planned and will be implemented to support Qatar National Vision 2030 and the 2022 FIFA World Cup. Huge hydrocarbon reserves offer financial stability that investors are now encouraged to bring their wealth and expertise into Qatar's construction market, which has now become the most expensive in the region. Since its selection to host the World Cup in 2022, construction activities in Qatar have started to gather momentum in preparation for this major event. The construction industry, which accounts for nearly 5% of the GDP, expanded to 10% in 2011 after two consecutive years of decline. Further rise is anticipated in the 2012.

Qatar's construction activity involves four major projects. The first project is directly related to the 2022 World Cup. The second is the $11.1 billion Doha Airport, with its first phase set to start operations in late 2012 whilst the second phase is scheduled in 2015. The third project is the new Doha Port with investment costs of $8.2 billion and targeted to replace the existing one located in the capital. Target completion is in 2016 for the first phase whilst full completion is set in 2030. The fourth project is the $25 billion rail plan. 

To date, Qatar has t h e highest construction costs in the Middle East, according to the annual International Construction Costs Report for 2012 released by consultancy EC Harris . The report also said that the UAE rose one position on the overall index to rank 17th, mainly because of the improvement in the construction sector. However, the report suggested that competition with Saudi Arabia and Qatar for both labour and materials could lead to a further price increases for these resources. The impending increase in construction expenditures is manageable for Qatar is on its way to achieving another record fiscal surplus. Revised figures from the Ministry of Economy and Finance published in Qatar Central Bank's recent quarterly bulletin indicated that revenue grew by 42% to QR220 billion ($60 billion), well above the previous record set in 2009/10.

Expenditure was also at a record level of QR166 billion, up 16% on 2010/11. As a result there was a fiscal surplus of QR54 billion, or 8.6% of GDP, hAir Jordan XIII Slippers