Emerging Market Global Players: Institutions, Governance and Strategy:

The Case of Qatar

Emerging Market Global Players: Institutions, Governance and Strategy:

The Case of Qatar

Yasir Yasin FadolAssistant Professor of International Business and Strategy

College of Business and EconomicsQatar University

Qataryasir.yain@qu.edu.qa

AIB 2014 Annual MeetingVancouver

June 25, 2014

Introduction Qatar at A Glance:• Qatar is the world’s largest exporter of liquefied natural gas (LNG).• Qatar is ranked amongst the three fastest growing world economies.• Growth averaged 14 percent over the past decade with per capita GDP reaching $100,000,

the highest in the world.• Investments by TNCs in West Asia increased by 65% in 2013, souring FDI by TNCs from Qatar

(more than quadrupling), explained most of the increase. Despite this increase, Qatar is still in the first steps in enhancing its outward investments.

However, the Qatari economy is still heavily reliant on state-owned enterprises (accounted for approximately 60% of GDP, 2009). Most of Qatar’s investments in international markets are dominated by state owned enterprises.

Major challenges:1. Development of a strong financial system to encourage the privately owned

companies and publicly owned enterprises to invest globally.2. Enhancing the education system to produce qualified and educated leaders

capable of managing their companies internationally and to conduct related research studies.

In 2008 the government created its first national strategic plan for future development, the Qatar National Vision 2030 (QNV).

Some of the Institutions on Qatar’s Foreign Investments Qatar’s authorities continue pursuing development and diversification strategy

and promoting competition, trade, and investment. Government has indicated broad plans to encourage investment and

development of industry outside the oil and gas sectors. In so doing, the authorities are striving to make major reforms:

Economic Reform Initiatives• Enhancing the institutional framework for fiscal policy;• Strengthening financial regulation and monetary operations to maintain financial

stability;• The establishment of Qatar Financial Centre (QFC);• The establishment of capital markets;• Taking initiatives for trade and investment policy implementation, which include:• Adopting the WTO Code of Good Practice in 2006.• Becoming a member of ISO, Codex, and the IEC, and utilizes their international

standards.• Becoming a member of the GCC’s Gulf Standardization and Metrology

Organization (GSMO).

Some of the Institutions on Qatar’s Foreign Investments Economic Reform Initiatives (Contd.)• The establishment of agencies in charge of trade and investment policy

implementation. These include:• The Ministry of Business and Trade: was given responsibilities for developing

programs necessary to execute policies on the development of trade and investment.

• Qatar Investment Authority: (QIA) is the government's sovereign wealth fund established in 2005 to strengthen the economy and build long-term strategic investments for the State. It invests in a variety of assets, both domestically and abroad, and is considered a global investor for the State of Qatar.

• National Committee on WTO Affairs: was established in 2001 to coordinate and liaise on WTO policy matters.

• Qatar Chamber of Commerce and Industry: was established to develop the private sector.

• Qatar Standards and Metrology Department: part of the Ministry of the Environment, prepares standards based on international standards.

Some of the Institutions on Qatar’s Foreign Investments Human Development Initiatives• Human Development: Qatar Vision 2030 and National Development Strategy

place high importance on education during the country’s transition process. Two major actions were taken improve education and research services:

• Qatar Foundation (QF): was established in 1995 to support the Qatari people in three main areas: education, science and research, and community development. It supports an innovative and open society that aspires to develop sustainable human capacity, social and economic prosperity for a knowledge-based economy.

• Education City: was established by QF to provide a common education facility for the establishment of world renowned universities in Qatar and to facilitate interaction with research institutions and industries.

Qatar National Bank (QNB)Today operates in 26 countries and across three continents.

Acting CEO CFO QNB Switzerland

Chairman of the Board

Director

Director

Director

Director

Director

Director

Director

Director

COO

Business

Risk

Services and Special Proj

International Business

Retail Asset and Wealth Mgt.

Communication

Human Resources

Information Technology

Strategy

International Banking

Treasury

Audit

Compliance

QNB Capital

QNB Syria

QNB China

QNB Mauritania

QNB Singapore

QNB Kuwait

QNB Oman

QNB Yemen

Operations

QNB Africa

QNB Europe

QNB Lebanon

QNB Sudan

QNB France

QNB Iran

QNB Libya

QNB Financial Services

Board N 1 N 2

Ownership structure: From a bank wholly owned by Qatar state to a bank with ownership structure split between the Qatar State (50%) and the private sector (50).

The Influence of Institutions on the Corporate Governance of MNEs

Enacting and implementing the aforementioned institutions led to the appearance of new forms of ownership MNEs other than state-owned enterprises. Although no statistics are available, a number of business firms such as banks and telecommunication companies began to expand their businesses globally.

QNB Simple Organizational Chart

The Influence of Institutions and Corporate Governance on MNEs’ Strategies, Behaviors, and Performance

No information is available since most of MNEs in Qatar are still new to measure the relationship between these variables.

In this context, support from researchers and research and consultancy centers and regional and international partners in the form of policy advice, sharing the experience of other countries, and market access will all be helpful.