Focus
GOIC’s achievements
GOIC plans SPX satellite units,
wider databases to attract FDI
By Vani Saraswathi
T
he Gulf Organisation for Industrial
Consulting (GOIC) has stepped up
efforts to bring more FDI into the
Gulf States. It is moving towards setting
up SPX (Subcontracting and Partnership
Exchange) unit in Doha with focal points
in all the GCC states. Through linking
databases that facilitate more coopera-
tion and partnership between local and
international companies the flow of FDI
will increase into the region.
At present, the GCC’s share of total
world global FDI is rather low, and it
is crucial that the investment climate
made more attractive, said Dr Lulwa Al
Misned, Assistant Secretary General for
Industrial Research and Investment Pro-
motion, GOIC.
In an interview to Qatar Today, Dr Al
Misned said in terms of FDI, UAE came
first, and Qatar and Bahrain follow. How-
ever, GCC in general has a very low share
of FDI in terms of the total world flow.
“Some people would say that countries
with such abundant resources don’t need
FDI. It is a narrow thought that does not
look at the other benefits, like new ven-
tures, transfer of technology, managerial
expertise, and interaction with the mar-
keting network. These are very vital for
an economy – to be exposed to the best
business practices.”
She added, “The economy is opening
up, financial centres are being set up, and
that will bring in more than just banks
– it will open up the financial sector to-
tally. It will improve project finance. The
success of these projects will depend on
how much FDI they bring in. The Sci-
ence and Technology Park provides an
opportunity for strategic alliances and
partnerships. The success of STP and the
Financial Centre will depend on how
much R&D it brings to the country and
how much expertise (in management,
best business practices) comes in.”
“GOIC SPX focuses on desalination
and petrochemicals, as these are the
most important buyers in the region and
would be the main source of business
to region small and medium industries.
While we are looking at bringing in FDI,
42 Qatar Today December 2005
we also want to provide opportunities
for local companies. We are linking large
and small companies by encouraging
large industries to sub-contract to small-
er ones. We would also like to integrate
industries strengthening linkages and
disseminate the concept of value chain.
There are some products that large in-
dustries use, that can be manufactured
locally by SMIs, without depending on
imports.”
Elaborating on GOIC’s role, she said,
“We provide an integrated set of high
quality, client-focused research, informa-
tion, and consulting services on indus-
trial and economic development issues
of critical importance to governments
and industrial customers in GCC mem-
ber states. Our mandate is to promote
industrial cooperation and coordination
among the six members of the GCC States
(UAE, Bahrain, Saudi Arabia, Oman, Qa-
tar and Kuwait), and to foster industrial
development both at public and private
sector levels,” said Dr Al Misned.
“We collect and publish data and in-
formation on industrial projects and
policies. We suggest viable industrial
projects that can be implemented by the
GCC States on a joint-venture basis. For
example a project that was taken up by
the Qatar Industrial Development Bank
(QIDB) – the Qatar-German Medical De-
vices Company.”
Qatar German Medical Devices was a
profile studied by GOIC and QIDB came
forward to carry it out to implement it.
“We have several contacts with inter-
national technology holders through
which we evaluate the technology, assess
the market and see who is interested in
taking it forward. When QIDB picked
the project they sought our help to evalu-
ate it further. We conduct seminars and
investment meets to explore more op-
portunities. Approximately 50 percent of
what we study and put forward is imple-
mented. It takes a while to establish an
industrial unit about 2-2.5 years.”
While GOIC’s primary role is to gen-
erate investment ideas, it is often being
called on to carry further studies, imple-
ment projects and conduct third party as-
sessments.
“It depends on the investor. The inves-
tor may not even contact the same the
technology holder with whom we have
studied the profile. Based on these pro-
files the investor knows there is a market
for its products and he may contact other
technology holders and implement the
project with.”
GOIC’s advantage over private con-
sultants is that “we have information
privilege. Our access to data is much bet-
ter. We do not operate as a private con-
sultant, but we do some consultancies
oriented towards the private sector like
restructuring of firms, industrial assess-
ments, energy efficiency of industrial es-
tablishments, environmental assessment.
But it’s not a large proportion of our
work, as we have a lot of requests from
the Governments and Ministries.”
The main goal of GCC countries is
diversification – away from wholly de-
pending on hydrocarbon resources and
towards manufacturing. “GOIC was set
up in an era when there was a boom in
oil prices, and then a bust occurred. The
states conceived that they needed a tech-
nical agency to create awareness and
give advice to policy makers in this re-
gard. What we have been doing recently
is also policy advice on economic agree-
ments, anti-dumping regulations in the
GCC for example...that is at the macro
since its foundation are:
m Promotion of 330 investment oppor-
tunities in a various sectors, through
23 investment seminars held in differ-
ent locations in the GCC countries.
They entail a capital investment of
about $ 6.6 billion and create about
16000 new jobs.
m More than 150 techno-economic
feasibility studies have been under-
taken, mainly in Chemicals and Pet-
rochemicals, Metals, Engineering,
Building Materials and Food Sectors.
m Implementing of more than 150
consultancy studies in the fields of:
planning and follow up, investment
opportunities, evaluation, operation
appraisal and industrial legislation.
m Development of data bases for
socio-economic, industrial and for-
eign trade data and statistics. Direct
on line access to these databases is
provided to all the GCC Ministries of
Industry.
m Establishing the first GCC SPX that
provides technical information for
matchmaking between main contrac-
tors and subcontractors.
level. On the micro level, what we do is
to exert efforts on promoting investments
in manufacturing, enable diversion from
traditional real estate, and import/ex-
port businesses. Manufacturing is new to
people in the GCC and are not used to
or comfortable with. It is high risk and
long-term investment but with good
promising returns. We need to build and
disseminate the culture for that. We try
to promote manufacturing investments
by studying technologies, the market,
prepare feasibility studies and then try to
promote that among private investors.
“The Energy sector influences all other
sectors. With high oil prices, you will see
construction boom, financial boom... We
want economies that are more diversi-
fied and less vulnerable to oil price fluc-
tuations. People think high oil prices are
good omen. There are positive and nega-
tive shocks. We want more resilient and
vibrant economies.”
On the increasing number of free
zones coming up in the region versus a
December 2005 Qatar Today 43
 Focus
common GCC free zone, Dr Al Misned
said, “A single free zone is not something
that can happen overnight. Existing free
zones are important to these countries.
In addition, you see most of the GCC
countries in any case have minimal taxa-
tion and tariffs are low, so why would
they want free zones anyway? Because
there are some administrative restric-
tions that are, time consuming, so these
free zones make processes quicker. They
want to create a good environment for
companies to come in. It is a good idea as
it accelerates the pace of liberalising the
whole economy. Even in one country you
can have different free zones, and form
clusters.”
Will the lack of ready cheap labour be a
deterrent to FDI? “In terms of scarcity of
labour, we have a long historical relation-
ship with the sub-continent and Asian
countries. The Gulf countries have been
built on expatriate labour that is avail-
able here as it is in, say India. That is not
an issue. And there are other incentives
such as energy, free zones, less taxation,
good infrastructure...”
Diversification has also caught the fan-
cy of traditional family businesses. “Over
the last 20 years, GCC has built a genera-
tion of industrialists. Not in the volume,
we wished. However, there is a founda-
tion and the culture has enhanced in the
last few years, and people are looking
at diversification. Family businesses are
launching IPOs, looking at more capital,
and different investment options.”
On reports of some family businesses
had stretched themselves too far and
were now in the red, she said, that there
is a trend now where the first generation
of businessmen – who established the
companies – are being phased out and a
new generation was taking over with dif-
ferent ideas and vision. “Sometimes it is
better to fly outside the family business
and look at expansion. This trend will
continue, and it is positive.”
On the Gulf currencies being pegged to
the US dollar, she said “to reduce shocks
of exchange rate fluctuation currencies
need to be pegged to a basket of curren-
cies. On the GCC union, Dr Misned said,
“The political leadership has initiated
the custom union, and there should be a
common monetary unity in 2010. It will
help the region on the road to economic
unity. There are some benefits and some
constraints. But we need to look at the
net gain. Short term losses are necessary
for long term benefits.”

44 Qatar Today December 2005