Introduction
Every one of us wishes to start and run a successful business regardless of the region, country in which the business enterprise is launched. There are some of the concepts that a business man has to look into before he or she can decide on the exact position where the business premises are going to be located.
Some of those issues include the proximity to the main road, availability of consumers, availability of raw materials in case the business is going to involve manufacturing process, security of the area and the nation at large and also the government commitment to provide secure environment to run a business.
For instance it is very difficult for an investor to start up a new business enterprise such as bottling of water in a very dry area because in such an environment, water is in scarcity and if the business is set up, the operating costs may be higher than the revenue and hence the company may end up closing down.
In addition one cannot set up a business enterprise in a place that hardly experience peace and stability. Some of these issues play a very vital role in determining whether one will invest in certain areas.
Having achieved these entire requirements then, the business can initiate its operations or decide to abandon the whole idea if some or all of the requirements are not met by both the state and the individual starting up the business.
Anderson (p 198) points out that the government should encourage more and more people to invest in the country as the investments contributes a very big share in the government revenue realized in terms of taxes charged on the profits that they make. Therefore, the more the investment, the more the governments realizes more revenue and thus the economy of such a country continues to grow year in year out.
In addition he points out that delocalization of business enterprises is very important for any country as this ensures that the whole country gains equally in the terms of development. He notes that some government have a tendency of encouraging investors to start their business in the already invested areas to enhance competition thus making other regions in the country lag behind in terms of infrastructure development.
He asserts that delocalization of industries and other forms of businesses helps in the springing up of other small business enterprises around the area where the investor has initiated his business. This according to him helps in improving the lives of the people around that region in way of job opportunities and improvement of infrastructure such as roads that comes hand in hand with such investments.
In this paper we will focus on the manufacturing industry in Qatar. Owing to availability of massive deposits of oil in Qatar, manufacturing industry is likely to thrive since crude oil is a raw material for many products such as plastics, petroleum jelly, as well as tar that is used for the purposes of tarmaking the roads.
Therefore, I will look at some of the positive things that make Qatar a better place for a person to invest in and not in any other country in the entire world.
Economic state of Qatar
Qatar is a country found in the Middle East. According to the World Bank and the International Monetary Fund, Qatar is the fastest growing country with an annual economic growth of about 19 percent as at the year 2008. In Qatar petroleum is the backbone of her economy that has for a long time accounted for over seventy five percent of total government revenue.
In addition, Becker (p 278) points out that petroleum contributes more than fifty percent of the country’s gross domestic product and also holds the lion’s share of all her export income. According to him, without oil Qatar cannot be in existence.
She is currently among the world leaders in the crude oil production and also she exports the product. He points out that soon after attaining her independence from Saudi Arabia in 1971, Qatar has continued to record a continued growth in her economy except in the period between 1982 to around 1987 when her economy experienced a down turn as a result of low prices from oil sales.
For a country to continue thriving economically she needs a strong banking sector and this has been the case with Qatar. According to Meshack (p 145) the economic depression of 2008 to 2009 did not affect the Qatari banking sector.
He points out that her banking sector was among other countries of the Middle East voted the best overall in the year 2008. In 2009-2010 financial year the Qatari Investment Authority (QIA) announced that it would buy five percent stake in so that it would increase the banks strength and also increase the consumers’ confidence.
He notes that after the economic melt down in other countries, many customers lost confidence in the banking sector and therefore the government had to step in and rescue her institutions.
He adds that in order to ensure that the banks continued lending money to their customers, the government decided to buy the investment portfolios of the financial institutions and therefore this acted as measure to cushion the banks should the customers fail to repay back the loans advanced to them.
In the year 2009, World Bank valued the Doha Securities Market (DSM) at $11.5 billion. However, in the following year the value decreased by over 40 percent and as a result the government had to intervene in order to save her from decreasing further.
Oil production which as earlier stated has been the back bone of her economy, has continued to increase to a current capacity of about 85000 metric cubes. Meshack (p211) points out that expert predict that her oil reserves are going to be exhausted around the year 2023.
However, he notes that the discovery of the natural gas has boosted her export earnings by becoming the third largest producer of natural gas in the entire world after Saudi Arabia. He argues that, the government has embraced a new program dubbed Qatarization which aims at making Qatari nationals occupy the senior positions in government institution.
In order to make this program successful, the government has partnered with the United States of America government whereby Qataris get educated and then return to Qatar to assume these positions that has been for a long time been occupied by expatriates.
Anderson (p 98) has noted that the government has put up a number of industries that have played a great role in improving her economy.
He points out some of the industries that the government has started include the Industries Qatar (IQ) that are responsible for the production of petrochemicals, fertilizers and steel. According to him, industrial production constituted a significant growth in Qatar’s growth domestic product.
He has pointed out that the huge profits realized by the companies in Qatar have been used in improving the economy and also protecting it from any melt down like was the case in the United States of America and most of the European countries in 2008 to 2009.
In addition he argues that Qatar is currently creating awareness on her citizens on the importance of reducing their reliance on oil and the natural gas since they are non-renewable and instead explores other avenues that can help sustain her economy once these natural resources are exhausted.
Qatar Foundation which is the government agency to oversee how the country is improving economically has been tasked with this role so that when the oil and the natural gas are no longer there the economy would not grind to a halt.
He points out that the government is preparing itself earlier to avoid being caught unaware and thus start depending on other countries. Prior to the discovery of oil, Qatari way of life relied heavily on pearl diving, fishing and desert subsistence.
Today Qatar has now become as one of the world’s leading producers and exporters of liquefied Petroleum gas (LPG), and envisages becoming the world’s largest producer by the year 2013. He points out that the incomes realized from the sale of oil and natural gas have taken Qatar into the ranks of the world’s richest countries.
Political state in Qatar
The modern state of Qatar was formed after she gained her independence from Saudi Arabia in 1971. Since then up to now the Al Thani family has been at the throne of leadership. The head of the government and state in Qatar is referred to as Emir.
Meshack (p 119-121) argues that Emir is not answerable to any person but has to strictly adhere to the Islamic law. In order to ensure accountability and promote transparency the Emir has to rely on the advisory council that helps him in policy formulation.
Qatar has a consultative assembly that is composed of 35 members. Ferdinand (p 23) points out that the members in the assembly are handpicked since no elections are held to put them in their offices.
He claims that in the country the country has 9 municipalities that include the Umm Salal, Ad Dawhah, Madinat ash Shamal, Al Ghuwayriyah, Jarayan al Batinah, Al Jumalyliyah, Ar Rayyan, and Al Wakrah.
However, unlike other countries that allows for elected leaders to head government and other institutions like the legislature, municipalities he points out that the citizens are only allowed to vote in the municipal elections. In addition to that he claims that the elected municipal has no powers and all that the leaders can do is to offer advice to the Minister in charge.
He points out that when the current Emir Hamad bin Khalifa Al Thani took over power on 27th June 1995 he allowed women to participate in municipal elections, he allowed media freedom and facilitated the formation of Al Jazzera some of the issues that the previous rulers had denied to their subjects.
Besides the Emir, there is a Prime Minister who is always in consultation with the Emir on how best the country should be run. Because of the enormous powers bestowed on the Emir and the ruling class he has contented that Qatar is not a democratic country. However, owing to the freedom availed by the current regime many scholars have not been able to define this kind of regime.
Geography of Qatar
Qatar as a country is found in the Middle East. According to Becker (p 204) she lays between latitudes 24 and 27N and longitudes 50 and 52 E. He notes that Qatar consists of a tiny peninsula projecting northward into the Persian Gulf from the larger Arabian Peninsula and that it has an area of 11,437 square kilometers (4,416 square miles), He has observed that Qatar is low lying nation that is all deserts.
He points out that she experiences a very cold winter that runs from November to around February and very hot summers in the period between May to around September.
However due to the advancement in technological know how, the subsequent governments have managed to irrigate some parts of the country and today she is able to produce a significant amount of fruits that her population depends on. He claims that average temperatures in June are 42C (108F), while during the cold season around December the temperature goes down to a low of about 15C (59F).
According to him rainfall is usually high during the winter period with certain periods the rain causing floods owing to the poor drainage system that cannot handle large volumes of water during such periods.
In addition he points out that during the summer period humidity along the coastal areas can go as higher as ninety percent.
According to him the highest point in Qatar is referred to as the Qurayn Abu al Bawl at 103 meters (338 ft) in the Jebel Dukhan.
This is the area that he has noted that contains majority of onshore oil deposits, while the natural gas is mined at the northwest of the peninsula which is located in the off shore areas
In addition he points out that the coastline of Qatar is part of a regional low of the Arabian Desert plain and it houses two natural harbors. The capes, Ra’s Rakan and Al-Mabakh, are also situated in Qatar and this gives the country an advantage. He says that there is an inlet known as Khr al-‘Udeid that has within its proximity large areas that have large areas covered by sanddunes.
Natural and man- made resources in Qatar
As earlier mentioned Qatar lies in the Arabian Desert where there exist a number of natural resources as well as the man made resources. However owing to the harsh weather in the region, Anderson (p 100-109) points out that she has limited natural fresh water resources and as a result the government has been forced to introduce facilities that would make salt water consumable by the people as well as the few animals in the country.
Some of the made resources in Qatar include the harbor in Doha as well as Umm Harbor that have been created by digging channel so that the shallow areas could be deepened and therefore allow big ships dock without any problems.
Population, demographics and education in Qatar
Over the years the population in Qatar has been growing in a very huge way. According to Becker (p 201) the population increase is attributed to the large number of expatriates from the developing countries of Africa and Asia.
He says that the Qatar citizens have been for a long time been known to shy away from responsibilities and therefore in order to fill up the deficit the government as well as other private companies have been forced to source for man power from other countries. He claims that as at 2008, the total number of people in Qatar stood at 1.1 million people where out of these more than three quarters were expatriates.
The total number of men has been on the rise since women have not been accorded equal opportunities compared to men. He says that Qatar is putting up modern structures now and therefore more men who can handle tough jobs are required and therefore this explains why the number of women has not matched the number of men.
With an increased investment by foreign companies, Qatar’s education sector has not been left behind and in the recent past there has been an increase in a number of foreign institutions opening up campuses in Qatar.
He says that some of the international schools in Doha include Stenden University, America School of Doha, The Gulf English School, The Cambridge School, and the International School of Choueifat. He has observed that education in Qatar is regulated and controlled by the Supreme Education Council.
He argues that the council has been mandated with controlling education from the kindergarten all the way to the University level. He points out that the regulation and control of education in Qatar is jointly shared by the Ministry of Education and the Supreme Education Council of Qatar.
He attributes this to the fact that Ministry of Education has been reducing the amount of money that they have been allocating to schools and also the fact that many schools have been put under the watchful eye of the Supreme Education Council of Qatar.
The Supreme Education Council of Qatar is endeavoring to improve the quality of secondary schools education as well as the University education by allowing Independent institutions that have been allowed to carry out their work without much interference from the government and other relevant agencies.
Infrastructure in Qatar
Owing to large deposits of oil in Qatar the government has managed to initiate a number of projects that have left many people baffled. According to Becker (p 108) Qatar Airways has for instance started constructing a floating airport in the Persian Gulf. Other projects undertaken by the government include a tunnel connecting Qatar with her neighbor Bahrain.
He says that super highways are being constructed that have helped improve the way in which people move from one place to another. Skyscrapers are coming up which have made become a trademark identifying Qatar.
Based on this analysis, determine whether a substantial foreign direct investment in this country would offer a competitive advantage to a company in the student’s chosen industry.
Having looked at all those aspects in Qatar it is then possible to say that foreign direct investment would help a business thrive and prosper at all times. This is informed by the fact that the government has provided a friendly environment for businesses to grow.
In addition, the construction of roads has facilitated the movement of goods fro the harbor and the airport to the interior.
For instance, in the manufacturing industry which I have chosen, the movement of crude oil from the fields to the factories has been made possible because of pipelines that have been lain down by the government. As a result, any investor setting up a business in Qatar will have all the necessary ingredients for his or her business to grow and expand.
Conclusion
It is a sole responsibility for any government to ensure that investors are protected from any thing that may hinder them from operating. This is because the investors have contributed a lot in the growth of the country’s economy.
Improvement of infrastructure is another very important thing that will invite more and more investors in a country or in a region. As Qatar has done, for a country to succeed economically more money has to be spent in rehabilitating and maintaining the existing infrastructure.
Works Cited
Becker, Peter. Governments in the Middle East. New York: MacMillan, 2010
Meshack, Andrew. The Evolving Qatar. London: Routledge, 2011.
Anderson, John. Business in Qatar and Bahrain: A Comparison. Oxford: Oxford