A report on Qatar’s economic progress, with an emphasis on labour market, education, and corporate reforms, has been released by the IMF. Although the overall image is positive, there is room for growth in the specifics.
The IMF believes that there is room for improvement in many implementation details and that further work is required in several priority areas, including outcome monitoring. Education is one area where expenditure levels have increased, but progress in improving educational results has not kept pace. Although Qatar spends around $14,000 per student, which is more than the OECD average and much more than the UAE or Saudi Arabia, the country’s PISA (Programme for International Students Assessment) results are lower than those of the OECD and generally comparable to those of other Gulf nations.
One warning, though: the report’s data comes from five years ago, so achievements might have increased since then. The introduction of yearly progress exams by the Qatari government, modelled after the well-known SAT examinations used in the United States for college admissions and which evaluate linguistic, reasoning, and arithmetic skills, would be a beneficial improvement. STEM fields (science, technology, engineering, and mathematics) ought to have broad support.
Approximately 90% of Qatari nationals are employed by the government, while foreign workers predominate in the private sector, especially in start-up companies. It would be beneficial to have these job patterns more evenly balanced. According to the survey, Qatar ranked above Saudi Arabia but behind the UAE and the OECD median for the availability of skilled professionals. Qatar’s ranking was medium.
Improving private sector-ready skills among Qatari nationals will support the country’s economy and avert a skills gap. This holds true not only for technological expertise and other advanced degrees from universities, but also for career training in specialised fields like auto repair, where the majority of instructors are foreign nationals. A change in work visa policies may make it more appealing for highly qualified foreign experts to come and work in Qatar. Not all foreign workers in the Gulf are temporary; others are long-term residents who are raising a third generation here and are therefore likely to make local investments rather than sending money home.
Women’s participation in the labour market is 25 percentage points lower than men’s and trails behind other states. It shouldn’t be hard to make improvements because women in Qatar are well educated; 64% of them have completed post-secondary education, which is somewhat higher than the 62% rate for men. Policies pertaining to employment that support women-only teams, offer childcare, and allow for flexible scheduling would be beneficial.
The report also encourages entrepreneurship and investment. Even with the development of digital infrastructure and the expansion of investor rights, the IMF recommended taking further steps to reduce bureaucracy.
International investment in several industries, including as banking and insurance, is still restricted. Additionally, foreign ownership and leasing rights for real estate are still restricted to specific zones, notwithstanding their expansion.
The IMF concludes that more progress would be beneficial in regards to trade-related taxes and regulations. Al-Nadeeb, a single window computerised customs clearing system, was introduced by Qatar. While each Gulf Cooperation Council member has its own customs administration, all members share a similar external tariff. However, trade-weighted tariff rates for non-fuel and non-agricultural products are significantly higher than the OECD level, and compliance costs for imports and exports are higher than the OECD median.
Better credit data, creditor rights, and collateral infrastructure are further suggestions made by the IMF to promote bank lending to smaller businesses. The majority of startup capital comes from individual savings.
Laws might be translated into English more quickly, which would encourage foreign direct investment. It is also advised to strengthen intellectual property rules in order to promote general direct investment and knowledge-based development.
The modelling results that show expected growth increases as a result of putting the policies into effect are shown in the document. The most likely stimulus will come from labour market reforms, particularly from the influx of highly trained foreign workers. Reforms that naturally support and complement one another should be launched concurrently, and those that offer the greatest benefit at the lowest cost should take precedence.