1. Nationalization Strategy
in the Qatari Private
Sector
7th GCCs Nationalization
Summit
2011, 20 September
Doha
Dr. Hend Al Muftah
Qatar University
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2. Agenda
1. The objectives of the nationalization plan
in the private sector
2. Revealing progress on existing
strategies: what works and what
doesn’t?
3. How the public sector can help the
private sector with nationalization
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3. Brief Background …
Each of the GCCs has its own set of problems
within Nationalization & Expats
Each came up with different types of solutions
 Some announced incentives for the jobless;
 Some created new jobs in the public sector;
 Some encouraged private companies to
hire more Nationals
But did any work?
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4. Definition problem (1)?
Nationalization is not yet well defined
in term of:
 Level: Macro or micro!
 Sector: Government, public or
private!
 Measurement: quantity or quality!
 Jobs: administrative or technical!
 Time frame: short or long term!
 Objective: government obligation,
nationals’ capacity building, or
reducing depending on expats!
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5. UNEMPLOYED
NATIONAL
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6. NATIONALIZATION
is NOT more than
RECRUTING!!!
Vague & fake!!!
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7. Definition problem (2)?
Private Sector (PS) is not yet well defined on
terms of ownership:
 Individual/Family businesses (15% of the
GDP)
 Public organizations owned by the
government (49%)….OR!!
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8. Qatari youth Define the PS….
Oil & Gas companies
The banks & investment companies
Diar, Barwa, etc.
 Supermarkets 
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9. Who is the private Sector
(PS)?
• Owned companies by
Government
•The main employer in the
Qatari labor market
-Qatari & foreign
investors- joint ventures
•79% of expats works in
the private sector
Results of Census of population,
housing & establishments, 2010 LOGO

10. ATTENTION…
75% of all jobs ARE in the PS
The PS grew in jobs by 356% & 125% in the
government sector
Qataris in the PS grew in numbers by 215% &
representing 8% in 2010
• Qatari females grew in numbers in the
private sector by 620%, representing 7%
96% not offered job within PS, 49% accept PS
jobs
Results of Census of population,
housing & establishments, 2010 LOGO

11. Agenda
1- The objectives of the
nationalization in the private
sector
2- Revealing progress on existing
strategies: what works and
what doesn’t?
3- How the public sector can help
the private sector with
nationalization
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12. Nationalization Objective within
Gov. & Public sectors
Economic: cost-effective labor, reducing
unemployment & outflow, dependence on
expats and wealth distribution
Social: part of nationals’ human development
and national identity
Political: security reason, some key positions
must be occupied by nationals to control
decision making, its part of their strategic
plans
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13. Nationalization Objective within
Private sectors
Old days …
It depends on the viewpoints of
the owners/stakeholders….
varies or conflict between them!
Agree/disagree!!
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14. New Trend…
Economic: maximize NATIONALIZATION
resources utilization,
utilize nationals for
some jobs as tourism
Social: more
obligations, part of
their CSR
Political: Support
government policies
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15. Nationals Talent Management
Today, Private Sector
cannot afford to ignore
nationals’ talent
management,
If they wish to stay in
their business
tomorrow!!!
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16. Agenda
1- Establishing the objectives of
the nationalization in the
private sector
2- Revealing progress on
existing strategies: what works
and what doesn’t?
3- Understanding how the public
sector can help the private sector
with nationalization
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17. Existing strategies: What didn’t
work?
- Meeting quotas
- Recruiting (easy roles doesn’t need
T&D)
- Career fairs
- Targeting graduates
(turnover)
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18. Existing strategies: What didn’t
work?
“Career fairs are just waist of money for
the sake of our PR & have nothing to
do with nationalization” (non-national
CEO)
“Targeting fresh graduates cost more
than retaining poor-performance
nationals” (Qatari Director)
- Meeting quotas
- Recruiting (easy roles
doesn’t need T&D)
- Career fairs
- Targeting graduates
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19. Why it didn’t work?
A Respond to government
regulations
A Short-term solutions
Well done! We’ve cut staff
turnover from 16% per year
to only 10%!
… We’ve kept 12% more of
our worst people and lost
6% more of our best people!
Oxford Consulting Company
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20. And…the RESULT…
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21. And…the RESULT…
Resulted in high turnover
(voluntary/involuntary) within the 1st
year:
 Poor supervision
 Poor management
 Poor career development
 Poor working environment
 Salary
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22. And…the RESULT…
It would not be enough to set a budget & recruit a large
number of nationals, but we also need to give them
suitable training, a clear purpose in the organization &
a reason to stay with us, but nobody seems to care, not
even my own people (Qatari Operational manager)
We attract talented nationals, leave them to find their ways
in the Bank without any clear roadmap, then we wonder
why do they leave us although we pay them more than
the others! (Non-national Branch Manager)
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23. Existing strategies:
what worked?
1. Maximizing strategic value of
nationals
2. Developing strategic value of
nationals
TALANT MANAGEMENT
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24. Maximizing strategic values of
nationals...
• VIA: Recruit & Train
• AS: Call centers jobs … BANKS
: Not 4 leader positions &
targeting lower skills…
• BUT it worked vey well in terms
of ROI & retention
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25. Developing strategic values of
nationals...
 VIA: Clear “road map”…Recruit,
train, develop & empower
 AS: key professional & leadership
positions
promoting the company &
retaining the national talents
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26. Current Best Practices
Don’t employ large No. of nationals just to meet quotas
Identify strategic capabilities & plan
Recruit nationals with clear career plan
Adapt/adopt some of the HR polices/procedures to
attract & retain nationals, specially females
Target less qualified, women, & older nationals
Nationalization is significant part of their talent
management, NOT meeting govt. quotas…
Nationalization is integral part of their strategic plans
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27. Talent Name Status
Mohamed Create talent Plan
Role: critical
Potential: C+
Readiness: 24 months
Successor: Essam Maximum attention
required
Aisha View talent plan
Role: critical
Potential: B+
Readiness: 14months
Successor: John Medium Attention
required
Abdulla View talent Plan
Role: very critical
Potential: A
Readiness: Now
Successor: Mary Maximum Attention
required
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28. Agenda
1- Establishing the objectives
of the nationalization in the
private sector
2- Revealing progress on
existing strategies: what
works and what doesn’t?
3-How the public sector can
help the private sector with
nationalization
LOGO

29. NDS - Eight enablers for PS development
Key enablers for private sector development
Finance and Investment : Domestic & Foreign Funding, Credit, Public & Private
1
Equity
2
Human Capital: Capabilities, Know-how, Labor, Education, Health
Technology & Innovation: Knowledge, R&D & Intellectual Property, FDI &
3
Technology transfer
4
Economic Infrastructure: Transport, Utilities, ICT
Market access: Foreign trade, Competition structure, Input Availability
5
Business
6 Environment & Institutions: Property rights, Foreign Ownership,
Government Efficiency
7
Govt. promotion of private sector: Government investments, procurement,
subsidies
8
Macroeconomic Stability: Monetary policy, Fiscal policy
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30. How can it work- NDS
Interventions & activities
Key Objectives Focus Areas
Draft as of June 22, 2010– For discussion only
1 Stimulate Enterprise and Private Sector Development
From key objectives to interventions
1 SMEs & entrepreneurship
Stimulate enterprise Key
objective
1 Stimulate Enterprise and Private Sector Development
Policy & regulation
& private sector (Competition, PPP) • Active and profitable private sector base Output
• Number of SMEs
• GDP contribution of
• Growth of SMEs private sector
development Outcome
• Successful public private partnerships
1.6
&
KPIs
Implement coordinated program to enhance SME access
• Size of PPP
investments
• ...
Draft as of June 22, 2010– For discussion only
Government investments to finance
Focus Areas Interventions
SMEs and Entrepreneurship Macro level:
• Easy credit financing •
1.1 Review and implementLimited access to creditanti-trust laws
existing competition and • Ministry of Business & Trade: strategy, coordination
2Build innovation Innovation & R&D
• Business opportunities for private sectors
(procurement opportunities w. state owned companies)
Policy and regulation
•
1.2 Develop PPP & Privatization policies have sufficient access to bank finance
Structural level:
•
• SMEs do not
• Qatar SMEs use internal funding due to strict lending
1.3 Activate PPP department conditions PIP & Privatization
•
Rationale
Programs
and develop
• Banks have limited SME product offering
1.4 Set up regulations & independent regulators for privatized
Limited access to equity
Stakeholders &
roles
Timeline
and management
• Enterprise Qatar and Qatar Development Bank:
implementation
Launch by Q1 2011
• Fair and open competition industries or industries•with private sector involvement
Inactive VC funds and little seed capital support
and discovery •
1.5 Align key SME initiatives and develop SME strategic program
Budget TBD
• Active public private partnerships Micro level:
•
1.6 Implement coordinated1. Create coordination committee involving all public sector stakeholders (EQ, QDB, MBT, QCCI etc) and private sector representatives
program to enhance SME access to
Government investments finance of financial sector (top banks)
Discovery • Anchor projects to catalyze downstream industry •
1.7 Implement state procurement & outsourcing program
2. Gather and consolidate existing plans and activities of SME-support entities (EQ, QDB)
capabilities • Coordinated investments across the state (integration,
alignment)
Source: BCG analysis
264412-01 EDP TT 5 Workshop-08Jun2010.ppt
•
1.8 Develop harmonized government investments program tofor support of SME financing, including credit guarantees, seed capital and VC funds
Activities &
3. Develop coordinated strategy align
sector development efforts and encourage private sector to increase transparency & provision of information, including activation of credit bureau, enhancing
4. Develop program of initiatives
standards for financial reporting, educating SMEs about financing options etc
sequencing 5. Allocate roles and ensure institutional set up to implement the strategy
10
6. Develop high level annual plans for all stakeholders
Immigration & labor 7. Conduct monthly meetings with key stakeholders to identify progress as per plan
8. Conduct quarterly or bi-annual meetings with Cabinet to inform on progress for R&D and innovation in Qatar
9. Regularly communicate progress to wider audience, i.e. government and private sector via newsletters, press releases, etc.
market policy • Alignment of all stakeholders Risks
3 Infrastructure and land Key
•
•
•
Active dialog with private sector and banks
Clear planning and responsibilities
Transparency in sharing current efforts and results
Risk and
• Unable to reach alignment between stakeholders
• Delay in consensus building (limited authority to
enforce agency decisions)
• Lack of focus towards private sector
Improve
readiness
requirements
assessment Readiness assessment
• EQ, QDB already developing support programs –
good base to build upon
productivity
11
Technology & skills 264412-01 EDP TT 5 Workshop-08Jun2010.ppt
Non-traded business
services
Trade & investment policies GSDP National Development Strategy - Economic Diversification and Private Sector Development
4Deepen global
Micro Strategic Directions & Interventions (Capabilities, inputs, incentives)
Based on joint discussions with Task team members on 16 June 2010
(FDI, Exports) Strategic directions
Enhanced access to finance
Ongoing initiatives Potential new interventions
- Enterprise Qatar, QDB (credit guarantee programs) Government support for SME financing (credit guarantees, equity funds etc)
- Creation of Credit Bureau
- Advisory center by QDB to support SMEs in Set up local VC firms to incubate start-up firms
Owner
Enterprise Qatar, Banks
Input from the Task Team
developing business plans
- Various products being provided, e.g. Letters of credit Increase transparency & provision of information (banks and SMEs)
Setup seed capital programs
Enhanced access to industrial Qatari Diar: Creating three specialized zones, logistics, Reform and harmonization of industrial land regulation Ministry of Energy and
land downstream metals/petrochemicals, light Industry,
manufacturing Improve industrial land infrastructure and services provided Zones authority
and regional
Enforce appropriate zoning concept (e.g. parks to promote partnerships along value
Institutions integrated
chain)
Transfer skills & technology from QSTP: Creating environment to support development Create incentive to transfer technology along with FDI (e.g. tax incentives, subsidies) Ministry of Business & Trade
FDI of knowledge based businesses (MBT)
Require foreign companies to transfer technology as pre-requisite for contract approval
with state companies.
Skill transfer programs (e.g. internships abroad, coaching by foreign companies)
Establish a technology transfer office to acquire foreign technologies
Provide incentives for performance related to skill and technology transfer
Targeted R&D and investment in KBB by QSTP: Developing knowledge based Setup targeted R&D institutes (gas production, LNG, renewables, desalination, ...) New agency required and
strategic IPs businesses in Qatar; Qatar National Research Funds: committee for innovation
Funding for academia and industry; ictQatar: Providing incorporateing QF, QU,
investment/incubation services for innovations/IPs private sector and other
integration
Require foreign contractors to conduct local R&D (key criteria for bid evaluation) stakeholders
Support of ICT uptake ictQatar: Increasing ICT uptake through training and Reduce cost of ICT adoption for SMEs (e.g. lower cost broadband access) ictQatar
support services
Infrastructure (Cross-
Provide advisory services to increase technology adoption in businesses (e.g. online
marketing, order generation, etc.)
Enforce e-government and e-regulation
Provision of market information Provide access to precise Qatar statistics via QSA Qatar Chamber of
Commerce and Industry
Setup a local market research agency (QCCI)
border, networks & grids)
Source: GSDP-BCG analysis LOGO

31. How can it work?
Quota system!
Increase the 20% ceiling!
Set more restrictions/limitations for
non-nationals employment!
Set more penalties on companies not
meeting quotas/ceiling!
Qatarization law!
Or what do you suggest???
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32. Constraints for private sector
•Qatarization focuses on quantity so far not on skills &
training
•"Entrepreneurship" mindset lacking among Qataris
•Lack of business skills & practical knowledge among
Qataris
•Most expat labor force is unskilled
•Expats do not have a long-term stake in Qatar
•Government and Q-Companies salaries are much higher
than private sector
•Capabilities are not matching demand from employers in
private sector
NDS, meeting 31 march 2010
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33. How can Public Sector help the
Private sector
Recent % in the Qataris salaries
threaten the PS nationalization efforts!!
Similar % at the PS compensation is the
solution!
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34. NOTHING WRONG WITH TWO
FACTS…
 Our country will remain in need for
non-nationals (skilled & unskilled) for
the coming few decades..
 Private sector is not an NGO or
charitable organization!
PS needs some help…
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35. How can Public Sector help the
Private sector
Economic solutions
 Minimum wages
 Wages subsidies (e.g. social allowance,
etc.)
 Merit & bonus system for A companies
(e.g. tax exemption, free-interest loan,
public recognition..)
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36. The Future…
When it comes to the future, there
are three kinds of people:
- those who let it happen,
- those who make it happen, and
- those who wonder what
happened
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37. Thanks for your attention
Q&A
h.almuftah@hotmail.com
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