DOHA: Qatar is well placed to achieve its goal of becoming a logistics centre for the Gulf, with a recent report noting buoyant confidence in the country’s planned expansion of its transport sector.
Rising optimism in Qatar’s economic outlook for the third quarter of 2010 was particularly strong for transport and communications, according to a survey conducted by Dun and Bradstreet South Asia Middle East (D&B) in June.
The transport sector’s index scores for sales, orders and profitability outlook jumped from 17 in the second quarter to 46 for the third in D&B’s Business Optimism Index for Qatar, which was released on July 12.
The survey, conducted in association with the Qatar Financial Centre (QFC) Authority, found that overall confidence score for non-hydrocarbons sectors of the economy also climbed, with a rise of 12 points to 39.
These rising expectations for non-hydrocarbons sectors are a testimony to the resilience of Qatar’s business environment and its robust economic fundamentals, said Shashank Srivastava, the acting chief executive officer of the QFC.
“Given that this survey was conducted as the leading economic indicators globally are showing signs of strain amidst increasing fears of a ‘double-dip’ [recession], it is particularly encouraging that our latest index concludes that optimism levels increased within the last quarter,” he said.
With the rapid expansion rate of Qatar’s economy – the IMF predicts a real GDP growth rate of 18.5 percent in the current year – the increasing demand for goods and services and a series of new logistics projects in the pipeline, there seems good reason to be confident in the future of its transport sector.
The government has been steadily investing its earnings from the hydrocarbons industry into building new infrastructure projects for transport, as well as other sectors that were identified as having the potential to broaden the base of the economy.
The investments are starting to pay off, though many big-ticket items such as the New Doha International Airport, highway upgrades and a major new deep-water port are at varying stages of development.
While it was the hydrocarbons sector that led the way as Qatar posted a 22.71 percent year-on-year increase in GDP for the first quarter, the transport and communications sector expanded by 14.7 percent, according to data issued on July 1 by the Qatar Statistics Authority.
Perhaps even more significant was the 7.89 percent growth recorded by transport over the last quarter of 2009, which was well in excess of the economy’s mainstays of energy and manufacturing.
Though the economy remains in robust health, a recent report compiled by the Saudi American Bank Group (Samba) suggested that Qatar’s expansion could slow after 2012, following the completion of most of the massive natural gas projects currently being planned or implemented.
The study, issued at the end of June, said that Qatar – like all other hydrocarbons-based economies in the GCC – will face long-term diversification challenges once gas production peaks.
However, the Samba study said that increased revenues from gas exports will provide the government with an opportunity to focus on its diversification strategy, and it highlighted Qatar’s focus on the expansion of transport and services.
“Over the next three to five years, the pursuit of this diversification agenda will generate strong growth momentum as large-scale infrastructure projects are implemented – such as the Doha airport and port, Qatar-Bahrain Causeway and integrated rail networks,” the report said.
Seeking to cash in on momentum in the transport sector, the publicly listed shipping and transport management firm Qatar Navigation is planning to call tenders for a $250 million logistics centre in August.
To be located at Al Thumama near Doha’s industrial area, close to the new airport and deep-water port, the centre will cover an area of some 500,000 square meters when completed within the next two years.
With solid economic fundamentals, double-digit growth rates and a raft of major projects under way, the outlook for the sector looks strong.
While competition is undoubtedly heating up across the region, Qatar seemingly has the capital and determination it will need to ensure its place as a centre for transport and logistics in the Gulf.