Mohamed Jaidah, Group Executive Director, Jaidah Group, on private sector development and greater efficiency

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Mohamed Jaidah Corporate.pngWhat do you identify as the most promising business opportunities for the private sector given the decrease in public spending?

MOHAMED JAIDAH: A couple of months ago the answer to this question would have been different. Today the government is committed to continuing with its investments, but in a smarter and wiser manner. Efficiency is a requirement by the government that has now also been adopted by private actors.

On a business-to-business level, it creates opportunities for all private businesses that have a hands-on and on-the-ground advantage in order to better cater to clients’ needs. One of the major challenges in the past was that local companies were competing with foreign companies that had no long-term prospects in Qatar. In comparison, local companies take full responsibility in terms of customer service and adopt a life-cycle approach which is necessary in the current context.

In addition, on a business-to-consumer level, we have seen a shift in consumer behaviour. For example, in the automotive sector, foreigners used to buy and sell cars during their stay. Since 2015-16 customers have been more cautious and now lease and rent rather than purchase vehicles. The shift towards renting is driven by flexibility, car-pooling applications like Uber and the increase in traffic. As a result, many people only want to drive when needed. Car dealers have changed their business models accordingly to meet the new demand in the second half of 2016.

In what ways is the newly inaugurated Hamad port going to ease supply-side constraints and increase efficiency along the value chain?

JAIDAH: Logistics is critical for the development of Qatar. The establishment of the port, the airport and especially Manateq has been a life saver for private companies because the whole economy was facing a shortage of storage capacity. The price of land has skyrocketed in Qatar, and the cost of storage and logistics was very high. The new port allows companies to receive their goods faster, and therefore international logistic companies are more willing to come to Qatar. Manateq has also helped build a smooth supply chain that is cost-effective.

In terms of private sector development, to what extent can entrepreneurship be developed in Qatar, and what will catalyse greater growth in this area?

JAIDAH: Today is one of the best times to own and start a company. Governmental institutions are aiming at being more efficient and cost effective, which means they are looking for in-country solutions rather than searching for services abroad. As long as quality and price can compete with international companies, local companies will benefit from low oil prices. For instance, in the advertising sector, local companies used to work with well-known international players. Now, we have witnessed a shift with local providers being gradually accepted as first-tier companies, as long as they have the credentials.

Nevertheless, it remains difficult to attract and retain the know-how, and the smaller the company, the harder it is. However, outsourcing is problematic due to cultural differences and the time difference. The biggest challenge for entrepreneurs is to create this nest of know-how that can benefit Qatari start-ups.

With the last major public tenders coming on-line for the 2022 FIFA World Cup, what is your outlook for the construction sector beyond 2022?

JAIDAH: The outlook is positive. When it was announced in 2010, lots of concerns emerged. However, the focus on infrastructure – road, rails, stadia and hotels – to accommodate the World Cup does not overshadow other mega-projects like Msheireb, which has a long-term effect beyond 2022 and will reinvigorate the heart of Doha with phase 1 due in time for the 2022 World Cup. In the meantime, there are smaller projects in education and health. Even though these are moving at different rates and magnitude, I believe that sound growth from a solid base will trigger a healthier country in the long run. In a sense, World Cup 2022 will establish the foundations for healthier and more sustainable growth. 

 

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