IMF urges Qatar to operate more efficiently

IMF urges Qatar to operate more efficiently By: Lesley Walker | 19 mins agoView as "Clean Read" | 0 Comments 25 Richard Messenger Meeting tight project deadlines without going over budget will require Qatar to carefully oversee its many public investment projects, the International Monetary Fund (IMF) has said in its latest country report. Qatar currently has $210 billion worth of projects in the pipeline, with the government bankrolling the majority of them ($160 billion). In a series of recommendations, the IMF urged Qatar to set up an integrated public investment management process to coordinate the planned infrastructure and development projects underway ahead of the 2022 World Cup. This would prevent construction bottlenecks and rising costs, and ensure that projects are delivered on time, the IMF said. The international body also called for Qatar to further strengthen its fiscal institutions, and to create a medium-term budget for all its projects. Meanwhile, Qatar could also see improvement in the arena of efficiency, the report said. While its government effectiveness is broadly in line with its GCC peers, the report cites World Bank figures that show Qatar is “lagging behind (other) resource-rich, advanced economies,” such as Canada, Norway and Sweden. Greater efficiency would help Qatar maximize its existing resources across all its projects, delivering them on time with better value for its money. Forthcoming projects Qatar’s level of public capital spending relative to GDP in 2012 was almost twice as high as public investment in other emerging markets, excluding China. Infrastructure and construction projects underway include: •The new Hamad International Airport, which soft launched late last month; •A new port; •A rail and metro system; •Development of residential areas; •New petrochemical plants; and •The upgrading and expansion of Qatar’s road network. This is in addition to the redevelopment and construction of at least eight new stadiums for the World Cup. “Given the ambitious investment program envisaged under the National Vision 2030 and compressed timetable ahead of the FIFA Cup 2022, the focus on investment efficiency is essential,” the report said. Eye on cost Examining Qatar’s efficiency, the report used statistics from Zawya’s database of MENA oil-exporting countries to compare construction costs of large public infrastructure projects. It noted that while construction costs on Qatar’s metro project appear low, the project is “subject to the risk of cost over-runs.” While it states that Qatar’s metro seems quite expensive when taking into account relatively low labor cost, the report adds that Qatar still compares favorably to its MENA peers. The quoted figures do not take into account Qatar’s need to import most of its raw materials. The report also noted that Qatar’s road projects appear “expensive,” at a per km/per lane cost of between $0.7 million to $7.4 million. This compares to Oman’s rate of $1.5 million, but land values, quality and technical competency were not factored into these figures, it said. The IMF report comes as Qatar moves to streamline a number of publicly-funded organizations. For example, the Doha Film Institute made 40 of its staff redundant in January of this year. Thoughts? ======================================== Qatar sets out labor reforms after rights criticism, but no timetable Wed, May 14 16:43 PM EDT By Amena Bakr DOHA (Reuters) - Qatar unveiled plans for labor reforms on Wednesday after persistent criticism from rights groups over its treatment of workers, but it set no timetable and the changes would still leave employees without a minimum wage or trade unions. Qatar has the highest proportion of migrant workers per population in the world and a lack of workers' rights has attracted international attention as the country prepares to host the 2022 soccer World Cup. Pressure on the Arab country grew after Britain's Guardian newspaper reported in September that dozens of Nepali construction workers had died and that laborers were not given enough food and water. Qatari and Nepali officials denied the report. The proposed reforms include replacing a contentious sponsorship law, known as "kafala", in which workers need their employer's permission to change jobs, with a system based on employment contracts, officials said in Doha. An exit permit law requiring workers to obtain an employer's consent to leave Qatar will also be reformed. The proposals follow a Qatar-sponsored review of its labor legislation by British-based law firm DLA Piper, which made a number of recommendations including the creation of a minimum wage for each category of construction worker. The International Trade Union Confederation (ITUC) has said more than 1,200 men have died in preparations since the World Cup was awarded to Qatar in 2010. Qatar has said no construction workers have died working on a World Cup site. In response to the planned reforms, the ITUC said the announcements gave no guarantee for workers in Qatar. "No moves were announced to stop the death and injury toll amongst the migrant workforce," it said in a statement. The reforms envisaged do not include the creation of trade unions or the establishment of a minimum wage. Officials outlining the changes at a press conference said that wages were dictated by market supply and demand. Under the reforms, workers will have their wages paid electronically to avoid late payments. And the country would adopt a "unified accommodation standard", a measure apparently aimed at improving the quality of migrant workers' housing, which is often spartan or squalid. The officials also propose raising to 50,000 riyals ($13,700) from 10,000 riyals a fine for employers holding the passport of an employee, a common practice among most construction firms and other companies in Qatar. Currently the fine is rarely enforced. REFORMS "SOON" "Let it be clear the current kafala system will be replaced with a system based on employment contracts and that will govern the relationship between the employer and employee," said Abdullah Saqr al-Mohannadi, director of the human rights department at the ministry of interior. But these proposals would now have to go through the Shura Council, a consultative body, as well as Qatar's chamber of commerce and government departments prior to their conversion into law, said Muhammad Ahmed al-Atiq, assistant director general of expatriate affairs at the ministry of interior. "God willing we hope that this will happen soon, but it's hard to put a timeframe," he said. Unions are banned in Qatar, the world's top exporter of liquefied natural gas, and workers who strike in protest are often deported. Human rights organization Amnesty International described the proposed reforms as "a missed opportunity" for Qatar.

"Based on today's announcement the proposals appear to be a missed opportunity. The government claims it is abolishing the sponsorship system, but this sounds like a change of name rather than substantive reform," James Lynch, Amnesty's researcher on migrants' rights in the Gulf, said in a statement. "While some of the measures

announced today are positive and if implemented would improve conditions for workers, they do not go nearly far enough," he added. However, Sepp Blatter, president of world soccer's governing body FIFA, welcomed the changes and has decided to postpone a scheduled trip in mid-May to Doha until after the 2014 FIFA World Cup, to allow him more time for him to gain an understanding of the reforms, FIFA said in a statement said. "This announcement is a significant step in the right direction for sustainable change in the workers' welfare standards in Qatar. We look forward to seeing the implementation of these concrete actions over the next months," Blatter said in the statement. According to DLA Piper's report, Qatar has 1.39 million migrant workers, which makes its the highest migrant to citizen ratio in the world, with migrant workers making up 85 percent of the population. DLA's report also found that the prescribed accommodation standards, which allow a maximum of four people in a room, are not being met by some contractors. ($1 = 3.6407 Qatar riyals) (Writing by Praveen Menon; Editing by William Maclean and Susan Fenton) ===================================================