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| | Contexte du marché au Moyen-Orient | Perspective économique |
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country report
Not all gas |
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If the WTO ministerial meeting
in November goes well Qatar will have gained rich dividends for its marketing
and PR initiative. How it translates this windfall into business prospects
remains to be seen, says Benedict Paramanand.
When most countries were skeptical of hosting the WTO meeting in 2001 with
scenes from Seattle still fresh in their minds, few would have expected
tiny Qatar to do the bidding. In fact, Qatar made the WTO's job easier as
it was looking for a place where it could complete the unfinished business
without too much hindrance. |
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Qatar's swiftness in grabbing
the opportunity reflects the aggressive mindset of the ruling family that
is aspiring for an international status, moving from an oil and gas producing
Emirate to one that is seen as modern and liberal. How it manages the big
event could either spell disaster to its marketing and image building effort
or elevate it to the class of prominent international cities in the region.
"A tame ending with strict control of public protest may have a negative
effect. But if the protest is managed well Qatar could earn the reputation
of being a cool locale for international conferences and events. This will
have a spin off effect on the nascent tourism sector," says a senior
executive at a Doha-based bank.
Dr Fadi Makki, advisor to the WTO organising committee in Doha, says: "If
we succeed in delivering first class service from the organisation point
of view it will help in hosting future conferences. Hosting the WTO meeting
is part of the government's strategy to market itself as a venue for international
conferences. Also, we want to offer a forum for dialogue. Organisationally
and logistically we can show the world what Qatar is."
In a way the country already enjoys a dubious reputation of being a maverick
State, with an independent foreign policy different from that of most Arab
States and sponsoring the controversial Al Jazeera television channel, which
has become notorious for exposing conservative regimes in the region.
Whatever the motive, the WTO ministerial meeting in Doha, scheduled between
November 9 - 13 with over 4,500 delegates expected to attend, will rub off
on the nascent business and leisure tourism industry. Expecting the boom
in the coming years in the high-end segment, big names in the hotel industry
have lined up with major investments. "The room supply will double
in the next three years from over 4,500," says Ian Lillie, director
of sales at Doha's Ramada hotel. |
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The holding of the WTO meeting and the Asian Games in 2006 signifies
a growing confidence among the Al Thani family that has ruled the Emirate
for nearly one half a century. They seem to have put the bad days of near
bankruptcy in 1998-99, following the oil price crash to under $10 a barrel,
behind them and are aggressively targeting international markets for their
oil, gas and petrochemical products.
Qatar is known to enjoy the third largest global gas reserves after Russia
and Iran. It is therefore going ahead with expanding its current gas production
from 13 million tonnes a year to 30 mt/y, especially from North Field,
known to contain six per cent of the global gas reserves.
RasGas and Qatar Gas have already placed Qatar as a global-scale gas exporter.
Exports have increased from 6.5 mt/y in 1999 to 11 mt/y in 2000 and are
scheduled to reach 25 mt/y by 2008. Two recent ventures to convert gas
into liquids (GTL) have made Qatar a pioneer in this field. On the occasion
of signing of the supposedly environment friendly project with South Africa's
Sasol Synfuels International on July 10, Qatar's high profile energy and
industry minister Abdullah bin Hamad Al Attiyah said: "Today's joint
venture agreement is the first step towards Qatar becoming the GTL capital
of the world."
The massive Dolphin project that will supply Qatar's gas via a pipeline
to the UAE, Oman and the Indian sub-Continent by the end of the decade
is another global-scale project that has given Qatar the big energy supplier
stature. The high profile customers in Japan, South Korea and India indicate
that Qatar has been able to successfully market its resources despite
tough competition from South East Asian and Middle East rivals. |
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| Excess cash breeds innovation |
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The per capita income in Qatar in 2000 was $25,000 and analysts expect
the Emirate to become the world's richest country in per capita gross
domestic product within a few years. This distinction is made possible
by a small population sitting on massive hydrocarbon resources. The population
as per 1999 figures is close to 725,000 with an annual growth rate of
3.62 per cent.
But thanks to a string of new projects aiming at commercialising the gas
reserves and their multiplier effect on the economy, cash is beginning
to pour into an already highly liquid banking system. The banks in Qatar
therefore face a unique challenge. According to Salah Mohammad Jaidah,
general manager at Doha Bank the emphasis is now shifting from liability
(read deposit) management to asset management. Banks are beginning to
develop retail products that target investments rather than deposits.
"The game is different now. The product mix has to be very different
from what it used to be," says Jaidah. With their treasuries now
brimming the Qatari banks are beginning to enter the regional markets
through aggressive marketing and attractive product mix to tap lending
opportunities of governments and high-net worth corporates. "It is
going to be tough as most GCC banks are in a similar situation - excessive
liquidity, fewer avenues to lend." Jaidah, who joined the bank recently
in July, is reforming the bank's strategy with greater emphasis on modern
technology and innovative product mix. "We used to cater to mainly
over $1 million-clients for investment purposes. We are now creating products
for even $10,000-clients," says Jaidah.
The two Islamic banks, which have a combined market share of about 15
per cent of the deposits and Qatar National Bank are faced with similar
challenges.
Despite the liberal image, analysts say Qatar still suffers from a credibility
gap internationally. "Bahrain-style political reforms could give
Qatar the international image it now lacks," says a GCC expert. |
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| Taking the icing off Dubai's
cake? |
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Will Doha compete for the creamy
layer of the tourist market in the region and give Dubai a run for its money?
The prospect may not be that far fetched if Doha persists with its positioning,
say industry watchers. Doha is creating a niche by promoting its Arabic
touch with western comforts.
Qatar, like its peers, set up a body recently called Qatar Tourism Authority
to promote the industry in an organised way. From a trickle now the Emirate
expects some 200,000 visitors by 2005. Like Oman, Qatar is marketing itself
as a niche market and abhors mass tourism for its adverse impact on the
local population.
But curiously, Qatar is looking beyond the regional plan and is already
part of the Doha, Katmandu, Maldives circuit. Qatar Airways is spearheading
this strategy to offer sun-starved tourists an exotic experience of the
desert, icy mountain and coral islands - all in two or three week packages.
Gordon MacKenzie, long-serving general manager of Ramada in Doha, says:
"Qatar Airways will lend their weight to the hotel industry. We are
depending on them and they are depending on us to drive the business."
MacKenzie also feels that joint destination is the best strategy to promote
Qatar.
The image make-over of Qatar Airways is important for enhancing marketing
of Qatar as a tourist market. The airline is expanding in a big way and
has placed orders for 11 additional Airbus A320 and five A330-220s with
options for several more between now and 2005.
On another front, Qatar is also keen on developing the whole of the GCC
as one destination. Sheikh Hamad Al Thani, the country's heir apparent,
said at a seminar on tourism in Doha recently: "While attracting visitors
from Europe, the Far East and other parts of the world, Qatar would also
like to increase the number of visitors it receives from the Middle East
region. The State is also looking at the possibilities of developing the
whole of the Gulf as a multi point destination for tourism."
To support this game plan a string of new five star hotels are going to
dot Doha's skyline in the next two years. The recently opened Doha Inter.Continental
will be joined by the 374-room Ritz-Carlton in September. Four Seasons,
Rotana, Hilton, Oberoi, Holiday Inn and Movenpick are known to have secured
properties.
Hoteliers believe the Arabic feel that Doha offers will propel its tourism
industry. This is apart from factors such as the salubrious climate most
months of the year, safety and the desert experience. "I have a feeling
that Dubai is losing the Arabic touch," observes Darrell Sheaffer,
general manager of Ritz Carlton. "It's even getting expensive during
the peak season in Dubai," he adds.
Sheaffer does not think smaller cities like Doha, Bahrain, or Muscat should
compete with Dubai. "But they are a good alternative. Doha is unique
in its own way - smaller, easy to get around and is good value for money,"
he adds. "I see a lot of German tourists come back to Qatar. There
must be something about this place," says Suzanne Grant, managing partner
at The Art of Business, a Doha-based marketing and business consulting firm.
The new hotels are spearheading the marketing effort of Qatar in a big way.
"Focussed marketing of a country's potential works. What we are doing
now is basically educating the market about Qatar," adds Sheaffer.
Unfortunately, tourism is still a novelty in most Gulf states despite the
region's potential for exotic winter holidays. The Western media's association
of the region with the protracted crisis between Israel and its neighbours
is known to be a major inhibitor.
But on their own, the GCC countries are making efforts through their airlines
and travel agents, to draw the focus of tourists away from the Middle East
crisis. In Doha, the next big international event after the WTO meeting
is the Asian Games in 2006. While the event is estimated to cost the country
$1 billion in investment, it is expected to give Doha another credential,
that of an international sports centre.
However, more than the investments in infrastructure and marketing efforts,
hoteliers and tour operators say the government's attitude towards tourists'
convenience and comfort still has a long way to go. "The visa rules
and service standards need a lot of improvement. Doha has to learn a lot
from Dubai on this if it has to make the tourists feel pampered," says
a general manager of a hotel in Doha. If not, the finicky and demanding
tourist would well give Doha a miss. |
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QATAR:
MACROECONOMIC DATA AND FORECASTS
| |
1997 |
1998 e |
1999 e |
2000 p |
2001 p |
2002 p |
| Nominal GDP (US$bn) |
9.3 |
9.2 |
9.8 |
13.0 |
15.6 |
18.1 |
| Nominal GDP growth
(% y/y) |
3.0 |
-1.0 |
6.5 |
14.0 |
20.0 |
16.0 |
| Population (mn) |
0.5 |
20.5 |
30.5 |
40.5 |
50.5 |
60.57 |
| Budget balance
(% of GDP)* |
-8.4 |
-6.5 |
-7.0 |
12.0 |
3.5 |
3.0 |
| CPI (ave, % y/y) |
2.8 |
2.0 |
2.5 |
1.0 |
2.5 |
2.5 |
| Exchange rate (QAR/US$,
end period) |
3.64 |
3.64 |
3.64 |
3.64 |
3.64 |
3.64 |
| Oil production
(000s, b/d)** |
620 |
670 |
630 |
665 |
655 |
650 |
| Oil price (Opec
basket, US$/b, ave) |
18.77 |
12.28 |
17.47 |
27.60 |
22.00 |
18.00 |
| Oil export revenues
(US$bn) |
2.48 |
2.16 |
2.60 |
6.70 |
6.40 |
5.6 |
| Exports (fob, US$bn) |
4.47 |
4.36 |
5.00 |
8.10 |
7.95 |
6.50 |
| Imports (cif, US$bn) |
2.99 |
3.33 |
3.50 |
3.50 |
4.00 |
4.20 |
| Trade balance (US$bn) |
1.48 |
1.03 |
1.50 |
4.60 |
3.95 |
2.30 |
| Current account
balance (US$bn) |
-1.06 |
-1.67 |
0.90 |
3.50 |
2.00 |
1.86 |
| - % of GDP |
-5.60 |
-0.50 |
20.20 |
34.21 |
16.20 |
12.00 |
| Foreign reserves
(ex gold, US$bn) |
0.70 |
0.55 |
0.64 |
0.80 |
0.85 |
0.9 |
| Sovereign external
debt (US$bn) |
2.87 |
3.40 |
3.90 |
4.00 |
4.00 |
4.10 |
| - % of GDP |
30.76 |
36.81 |
39.83 |
30.77 |
26.67 |
26.54 |
e/f = BMI estimates/forecasts (bold), * fiscal year (to
end March) ** includes condensates. Sources: IMF/
World Bank/Qatar Central Bank/BMI. |
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Wither financial freedom
A new-look Al Jazeera Channel will be on air in November. After completing
five years, the biggest challenge the channel faces is becoming financially
independent, as Benedict Paramanand finds out. |
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The Al Jazeera Channel, which created a revolution of sorts in the Arab
world's media industry, is getting a new look. It couldn't have been a
better time for the channel as it steps into the sixth year of its eventful
operation, to do a bit of retrospection and a lot of future thinking.
The Qatar government-sponsored channel's marketing director, Ali Mohammed
Kamal is sanguine. While the logo will remain the same, an element of
freshness is being added with a new jingle, new programmes and campaigns.
But more importantly, the channel intends to break new grounds by building
a strong portal, preparing a new business plan whereby it hopes to break
even after three years.
But more importantly, experts say, the channel has attained a preeminent
position in the television media not just for being radical but also by
spurring more regional channels into asking tough questions. It has unleashed
boldness and open programming in the region. For example, Abu Dhabi Channel's
two weekly programmes on censorship are known to be highly rated for their
live discussion and strong investigative research. Middle East Broadcasting
Centre's Press World, ANN's satirical programming and Orbit's Without
Censorship are contemporaries of Al Jazeera and some even its forerunners. |
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While Al Jazeera has undoubtedly revolutionised political reportage it
has come under scrutiny about its operations and funding. The channel's
promoter, the enigmatic Qatar's foreign minister Sheikh Hamad Bin Jassim
Bin Jabr Al-Thani, continues to bankroll the channel even after its first
funding of about $130 million is known to have depleted considerably.
Despite its immense popularity with over 35 million viewers, the audience
has not yet translated into big advertising bucks.
But Al Jazeera appears to be serious about getting profitable through
a mix of new initiatives that include focussed marketing to target multinational
advertisers who are less apprehensive about getting into the bad books
of the power that are. "We are focusing on the multinationals now
for growing our advertising revenue. Our first success has been with P&G,"
says Kamal. "But now Al Jazeera has passed the acceptance phase and
with some innovative sales and marketing strategies, it could break the
financial jinx," says a media expert. In 2001, the channel will cover
only 35 per cent of its cost. But Kamal says the revenue target set for
the first half of 2001 has been surpassed by 72 per cent and that he's
getting there.
Al Jazeera is in an expansion mode. By this month, when Central Africa
will come under its footprint, the channel will cover 90 per cent of the
globe. It has drawn up plans to get into documentaries, nature programmes,
selling footage to foreign media and business news segments shortly. It
is in talks with big names in the business for tie-ups.
But its most ambitious plan is the portal, which already gets 65 million
hits per month. "We are developing into the first and big portal
in the region with the right mix. We will also be focussing on e-commerce
and WAP by the first quarter of next year," Kamal says.
Al Jazeera is also aware of the opportunities in English as it has subscribers
in the United States (100,000), Europe and Australia. For a start, the
Arabic programmes will have subtitles in English. It is also planning
an early morning English language news bulletin.
Despite its immense popularity, the channel still faces stiff challenges.
"The international brands have a small marketing and advertising
budget for the region. This is a constraint for our growth," Kamal
argues. "But we have the credibility, the market, we command trust
and our relationship with our advertisers is good," he adds. If this
heady mix is for real then there's no looking back for Al Jazeera. |
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