Dubai: A diplomatic and trade boycott imposed by four Arab countries over Qatar’s support of extremism and funding of terrorism is squeezing the peninsular country’s economy — and the government is desperately looking for ways to keep foreign investors and expatriates from leaving en masse and to motivate Qatari businessmen.
Qatar on Saturday offered to subsidise private companies in a bid to prevent them from leaving.
Bahrain, Saudi Arabia, the United Arab Emirates and Egypt severed their relations with Qatar on June 5 and presented a series of demands asking Qatar to comply with them before ties could be resumed on new bases.
Doha rejected the demands, used international PR companies to claim it was under siege and win international support and defiantly insisted the country was faring well and even prospering.
However, a series of measures announced by the government demonstrates just how much Qatar is suffering economically.
Prime Minister and Interior Minister Shaikh Abdullah Bin Nasser Bin Khalifa Al Thani halved rents in the country’s southern logistics zones for the next two years.
Exempt from rent for one year
New investors in the zones will be completely exempt from paying rents for a year if they obtain building permits by certain deadlines.
Qatar Development Bank, a state-founded body which lends to firms, will postpone receiving loan instalments for up to six months to facilitate industrial sector projects.
Shaikh Abdullah also told all ministries and government departments to increase their procurement of local products to 100 per cent from 30 per cent, if the local products meet necessary specifications and the purchases obey tender rules.
Qatar’s economy expanded just 0.6 per cent from a year earlier in the April-June quarter, its slowest growth since the 2009-2010 global financial crisis.
Sanctions imposed by the Arab quartet triggered a pull-out of deposits by Gulf states from Qatari banks, deepened a slump in real estate prices and caused a plunge of 18 per cent in the stock market.
Qatar has been struggling hard to invigorate its economy and attract investors and tourists even though the cost of living, food and transport continue to rise amid the ongoing Gulf dispute.
Seeking to deal with the dwindling number of tourists amid the biting boycott from some of its most frequent visitors from Saudi Arabia, the UAE and Bahrain, Qatar decided to waive visas for nationals from 80 countries.
Saudi citizens accounted for one-third of the 2.9 million visitors to Qatar last year.
Qatar also opened the country up to permanent residency to some nationalities to lure investors into staying and prevent them from leaving.
Tourism figures have nosedived with reports that the average occupancy in five major hotels was around 57 per cent during the Eid festival, way down from the 95 per cent usually reported on such occasions.
In August, the Central Bank revealed that Doha pumped nearly $6.9 billion in local banks last month due to the decline of deposits by residents and the private sector in Qatari banks.