Qatar should continue to pursue a national agenda by implementing localisation and In-Country Value (ICV) programmes. The country should strive to build its capabilities of the local population, and attract investment to Qatar to achieve a competitive and resilient economy, leading audit and assurance firm PwC said in its ICV Vision document on Qatar.
ICV can broadly be defined as the total spend that remains within a country, benefitting the development of local companies and human resources, and contributing to the strengthening economic productivity, diversification and resilience.
PwC’s ICV document on Qatar explains how Qatar can take advantage of its natural resource wealth to create more jobs, strengthen local suppliers and ecosystems, build human capital, as well as diversify and grow its national economy.
The document noted that by encouraging international companies to invest locally through foreign direct investment, Qatar can take advantage of their natural resource wealth to develop local industry, create jobs and transfer technology.
It can help encourage directing spending toward companies with activities that add value to the local economy. Companies with higher ICV in the supply chain that are contributing to the local economy are given a competitive advantage over others.
PwC’s Qatar Country Senior Partner, Bassam Hajhamad, said: “Effective local content policy has become a key factor in driving economic growth and diversification across the region, and where countries continue to spend billions of dollars on infrastructure projects. ICV will impact both public and private entities in Qatar, and will have a role to play in maximizing local content in the provision of goods and services.”
Under its Vision 2030 strategy, the document noted, Qatar has made a number of significant achievements. These include development of world class infrastructure, winning the bid to host the 2022 FIFA World Cup and overcoming of regional geopolitical and economic challenges. But despite this significant progress, Qatar remains dependent on oil and gas (O&G) revenues and, facing some challenges to its economic security. So, Qatar must continue t build a more diversified and resilient economy.
Qatar’s economic challenges are primarily related to economic diversification and development of national capabilities. The country relies heavily on imports of goods and services from international suppliers. There is a strong drive to continue developing local talent and capabilities, while also creating a culture of innovation and entrepreneurship within Qatar.
“Qatar should take advantage of lessons learned from countries with similar challenges. It should enact ICV initiatives to diversify and develop the local economy and strengthen the resilience of the national supply chain. To do this, Qatar must establish the right vision for in-country value”, the PwC document said.
The first step in implementing ICV for Qatar is to define a formulas which calculates ICV across the end-to-end value chain for goods and services. Secondly, Qatar must ensure that the local capabilities are equipped with proper knowledge; tools and know-how prior to shifting critical spend back to Qatar.
Third, it is imperative that Qatar fosters a “business-friendly” environment to enhance the ease of doing business and attract foreign investment. Finally, governance of localisation initiative is critical to the implementation, the sustainability and the resilience of the country.
Qatar is well-positioned to embark on its localisaiton journey. With a wealth of natural resources, a strong talent pool, and a promising upcoming agenda, Qatar can use this to its advantage to ultimately enhance the sustainability and resilience of its economy. However, the foundation must be reinforced to ensure a successful implementation of ICV in Qatar.
