Nationalization at the Qatari Private Sector


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Nationalization at the Qatari Private Sector

  1. 1. Nationalization Strategy in the Qatari Private Sector7th GCCs Nationalization Summit 2011, 20 September Doha Dr. Hend Al Muftah Qatar University LOGO
  2. 2. Agenda1. The objectives of the nationalization plan in the private sector2. Revealing progress on existing strategies: what works and what doesn’t?3. How the public sector can help the private sector with nationalization LOGO
  3. 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? LOGO
  4. 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! LOGO
  6. 6. NATIONALIZATIONis NOT more thanRECRUTING!!!Vague & fake!!! LOGO
  7. 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!! LOGO
  8. 8. Qatari youth Define the PS….Oil & Gas companiesThe banks & investment companiesDiar, Barwa, etc. Supermarkets  LOGO
  9. 9. Who is the private Sector (PS)?• Owned companies byGovernment•The main employer in theQatari labor market -Qatari & foreign investors- joint ventures•79% of expats works inthe private sector Results of Census of population, housing & establishments, 2010 LOGO
  10. 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. 11. Agenda1- The objectives of thenationalization in the privatesector2- Revealing progress on existing strategies: what works and what doesn’t?3- How the public sector can help the private sector with nationalization LOGO
  12. 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 LOGO
  13. 13. Nationalization Objective within Private sectorsOld days …It depends on the viewpoints of the owners/stakeholders….varies or conflict between them! Agree/disagree!! LOGO
  14. 14. New Trend…Economic: maximize NATIONALIZATIONresources utilization,utilize nationals forsome jobs as tourismSocial: moreobligations, part oftheir CSRPolitical: Supportgovernment policies LOGO
  15. 15. Nationals Talent ManagementToday, Private Sector cannot afford to ignore nationals’ talent management,If they wish to stay in their business tomorrow!!! LOGO
  16. 16. Agenda1- Establishing the objectives of the nationalization in the private sector2- Revealing progress onexisting strategies: what worksand what doesn’t?3- Understanding how the public sector can help the private sector with nationalization LOGO
  17. 17. Existing strategies: What didn’t work?- Meeting quotas- Recruiting (easy roles doesn’t need T&D)- Career fairs- Targeting graduates (turnover) LOGO
  18. 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 LOGO
  19. 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 LOGO
  20. 20. And…the RESULT… LOGO
  21. 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 LOGO
  22. 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) LOGO
  23. 23. Existing strategies: what worked?1. Maximizing strategic value of nationals2. Developing strategic value of nationals TALANT MANAGEMENT LOGO
  24. 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 LOGO
  25. 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 LOGO
  26. 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 LOGO
  27. 27. Talent Name StatusMohamed Create talent PlanRole: criticalPotential: C+Readiness: 24 monthsSuccessor: Essam Maximum attentionrequiredAisha View talent planRole: criticalPotential: B+Readiness: 14monthsSuccessor: John Medium AttentionrequiredAbdulla View talent PlanRole: very criticalPotential: AReadiness: NowSuccessor: Mary Maximum Attention required LOGO
  28. 28. Agenda1- Establishing the objectives of the nationalization in the private sector2- Revealing progress on existing strategies: what works and what doesn’t?3-How the public sector canhelp the private sector withnationalization LOGO
  29. 29. NDS - Eight enablers for PS developmentKey enablers for private sector developmentFinance and Investment : Domestic & Foreign Funding, Credit, Public & Private 1 Equity 2Human Capital: Capabilities, Know-how, Labor, Education, HealthTechnology & Innovation: Knowledge, R&D & Intellectual Property, FDI &3 Technology transfer4Economic Infrastructure: Transport, Utilities, ICTMarket access: Foreign trade, Competition structure, Input Availability5Business6 Environment & Institutions: Property rights, Foreign Ownership,Government Efficiency7Govt. promotion of private sector: Government investments, procurement,subsidies8Macroeconomic Stability: Monetary policy, Fiscal policy LOGO
  30. 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 interventions1 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, coordination2Build 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 Risks3 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 Development4Deepen 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. 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??? LOGO
  32. 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 LOGO
  33. 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! LOGO
  34. 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… LOGO
  35. 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..) LOGO
  36. 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 LOGO
  37. 37. Thanks for your attention Q&A LOGO