5th January 2021 marked the return of relations between Saudi Arabia, UAE, Bahrain and Qatar, after a three-year rift. Trade relations between these GCC neighbours are being restored and this means a lot of optimism in the business community across this region. For many, they have been using workarounds for this that have, in some cases, probably added to their cost of doing business.
The movement of trade and services between Qatar were significantly curtailed in the past few years where even reaching Doha from the GCC involved hours of travel across multiple borders. These issues will now be removed. The easing of borders builds overall confidence and creates opportunities across the board. The easing of movements for Gulf Nationals from one state to another and the facilitation of money movement will also bring benefits to all States.
Last month, after the Al Ula declaration, our guest contributor, Alex Malouf, shared his view on why you should be looking at Qatar and some of the areas of opportunities in the country. As a communicator, he looked at the marketing and communications sector first especially with the World Cup around the corner. Kate Midttun, Managing Director, Acorn Strategy agrees with Malouf.
“We view this as a very welcome development that will reflect positively on the entire GCC region and contribute to the social, political and economic cohesion of Gulf nations,” she added. “What this agreement effectively means is a considerable market expansion that will be rewarding for businesses in many sectors on either side, and we're looking forward to the opportunities it will create for public and private sector organisations in the United Arab Emirates.”
Some of the sectors that will benefit will include aviation and travel as airlines restart operations into and out of Doha. According to Nazar Musa, Chief Commercial Officer at Pro Partner Group, “This will, in turn, allow non-Qatar based hotels and attractions to benefit from high spending Qatari travellers again and Qatari hotels restarting both business and leisure travel from the other GCC States.”
Musa feels that one of the biggest beneficiaries, though, will be the banking sector with QNB being able to restart its operations in neighbouring countries and other regional banks becoming more active in Doha. With the World Cup due to be hosted in Qatar in 2022, opportunities are clear for construction and service companies and undoubtedly these sectors will also benefit from the normalization of relationships.
Logistics were a key stumbling block for several companies including DVCOM who had to build new partnerships to support their partners and customers in Qatar. Renjan George, Managing Director of DVCOM technologies, added that the reopening of cross border trade will “ease the pressure we were facing logistically which will result in more business for 2021”.
He added, “As distributors, we always worked through our partners in Qatar and not directly. During the embargo, the only challenge we faced was logistics. We managed this by shipping directly from our vendors to the partner in Qatar. Since the borders are now open, we will be building a direct presence to support our local partners.”
Pro Partner Group maintained an office in Qatar to support their customers on the ground during the embargo helping businesses to focus on domestic operations within Qatar. However now that this has been lifted, the opportunity lies with businesses that are currently based outside of Qatar but see a market for their product or service there. The company, with its regional structure, are able to support them re-enter the country and set up on the ground.
Bol Gappa, a home-grown restaurant in Dubai is looking forward to an inflow of regional tourists to help ease what, for many in the hospitality sector, has been a tough year. Hricha Saraf, Partner at Bol Gappa added, “The Qatar Accord serves as a huge relief for restaurants like ours which is strategically located in Dubai. Because of a shorter flight time (50 mins), UAE was an attractive destination for short trips for Qatari residents and citizens. We used to serve a sizable number of Qatari guests who enjoyed quirky Indian-inspired food. Qatari guests constituted almost 15 percent of our overall GCC guests.”
The opening up has also offered an opportunity for the restaurant to revisit franchise options in Qatar. “We are now in a far better place to consider franchise opportunities in other Gulf countries. With Qatar fast becoming a new tourist destination, we are exploring to set up a new outlet there,” added Saraf.
Despite the tightening of some regulations because of Covid, there is still an air of optimism for businesses around the opening of borders within the GCC.