The manufacturing sector in Qatar is based on its comparative advantage in the gas intensive industry. For the past three to four years, the contribution of the manufacturing sector towards the GDP of Qatar has been a constant 10%. It is currently growing very slowly and is projected to reach USD XX billion by 2021 at a CAGR of XX%. Physical capital investment, greater exposure to trade, competition in the sector and aggressive advertising through various channels are factors affecting the growth of this market.
Population Boom and Cheap Gas Driving Manufacturing Sector
Qatar has experienced a sudden increase in population making foreign companies identify it as a potential destination for industries to be set up. Its huge natural gas reserves have always served as the primary feedstock for the manufacturing sector and most of the industries in Qatar are based around it. Thus, it is one of the biggest exporters of liquefied natural gas, petroleum products, and fertilizers.
Qatar is to host the FIFA World Cup in 2022. Sectors like tourism, transport and construction etc. and have been aided by it and similar growth was expected for the manufacturing sector. But due to the government’s preoccupation with the World Cup, the manufacturing sector has not been as successful as the others. Other than the falling oil prices, lack of innovation is the biggest challenge that the manufacturing sector is facing.
As soon as the FIFA World Cup in 2022 ends, the growth in all other non-oil gas sectors will come to a halt and Qatar shall focus on increasing its exports which can only be done through promoting industrialization and manufacturing. The manufacturing sector shall get a boost when the huge number of labor, which is currently working in other sectors, shall start looking for other options after the World Cup.
Key Deliverables in the Study