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					       “QATAR”
       MARKET
INTELLIGENCE REPORT

      TEAM 3
       This report provides an overview of Qatar from the perspective of

       commercially available resources. Qatar (KUHT uhr or KAH tahr or GAH

       tahr) is a small Arab country in southwestern Asia. It occupies a peninsula

       that goes from eastern Arabia into the Persian Gulf.

Geographical location

Qatar, a middle- eastern country, is a peninsula bordering the Persian Gulf and

Saudi Arabia. In size it is slightly smaller than Connecticut. The climate is arid

with mild pleasant winters and hot humid summers. The terrain is mostly flat and

barren desert covered with loose sand and gravel. Natural hazards include haze

and dust storms. Sand storms are common. Naturally occurring fresh water

resources are limited, creating significant dependence on large-scale

desalination facilities. Qatar represents a strategic location in the central Persian

Gulf near major petroleum deposits. Other natural resources include natural gas

and fish. The capital of Qatar is Doha. Other populated cities include Umm

Said, Al Khor, Dukhan and Ruwais. Qatar has an estimated population of

863,051 (July 2005 estimate from the CIA fact book). Up to 80% of the

population is foreign workers. The overall ethnic mix is 40% Arab, 18%

Pakistani, 18% Indian, 10% Iranian and 14% other. The state religion is Islam.

Arabic is the official language but English is widely spoken. Depending on the

source, literacy rate ranges from about 79% to 85%.




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Geopolitical Considerations

Qatar is a traditional monarchy. Its Chief of State is the Amir Sheikh Hamad bin

Khalifa al Thani who came to power in 1995 after ousting his father in a bloodless

coup. He also holds the positions of minister of Defense and Commander-in-

Chief of the Armed Forces. Qatar is a fully centralized government. It is

administratively divided into 10 municipalities. There was a provisional

constitution enacted 19 April 1972, but effective June 2004 the new government

constitution took effect. Approximately 97% of the population approved the

constitution in an April 2003 referendum. The right to rule Qatar is passed on

within the Al Thani family. Politically the country is evolving from a traditional

society into a modern welfare state. Government departments have been

established to meet the requirements of social and economic progress. The

Basic Law of 1970 institutionalized local customs rooted in Qatar’s conservative

Wahhabi heritage granting the Emir preeminent power. There is no electoral

system and political parties are banned.

Qatar Military

Qatar maintains a modest military force of approximately 11,800 men making up

the Qatari Amiri Land Force, A Qatari Amiri Navy and Qatari Amiri Air Force. In

1994 Qatar signed a defense agreement with France acquiring several Mirage

2000-5 aircraft. It has recently signed defense pacts with the United States and

United Kingdom. Qatar plays an active role in the collective defense roles of the

Gulf Cooperation Council along with Saudi Arabia, Kuwait, Bahrain, United Arab




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Emirates and Oman. The CIA estimates approximately 205,000 men aged 18 to

49 are fit for service.

Qatar Economy

Oil is the cornerstone of Qatar’s economy, accounting for more than 55% of the

GDP, roughly 85% of export earnings and 70% of government earnings. Oil has

given Qatar a per capita GPD comparable to that of a leading Western European

Industrialized nation. Oil fields are projected to be largely depleted by 2023.

Production and export of natural gas is increasingly becoming important to

Qatar’s economy. Qatar’s heavy industrial projects, all based in Umm Said,

include a refinery, Fertilizer plant, steel plant, and petrochemical plant. The

United States is the major equipment supplier for Qatar’s Oil and Gas industry.

Qatar is pursuing a vigorous program of “Qatarization” under which all joint

venture industries and government departments are striving to move Qatari

nationals into positions of greater authority.

Transportation

Qatar has approximately 1,500 kilometers of road, including about 1000

kilometers of paved road. Most paved highways are centered in the Doha area

or radiate from the capital to the northern end of the peninsula, to Dukham on the

west coast or southwest to the border of Saudi Arabia to connect with the Saudi

highway system. Outside the capital and the principle highways, large stretches

of country are accessible only by vehicles equipped with four-wheel drive.

Facilities for air and water transportation are located in or near the capital. Doha

is the main port, having four berths capable of handling ships up to nine meters




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in draught and five additional berths that can accommodate ships having a

draught requirement up to 7.5 meters. Doha International Airport has a 4,500

meter runway which can accommodate all types of aircraft.

Telecommunications

Domestic and international telecommunications are excellent. Radio-relay and

submarine cables link Qatar with all the Arab states around the Persian Gulf.

Three satellite ground stations provide excellent international telephone and data

links and live television broadcasts. Seven AM and three FM radio stations have

programs in Arabic, French, Urdu and English. A powerful shortwave station with

broadcasts in Arabic and English is heard worldwide.

Social System

Qatar has a tight-knit social system similar to other Persian Gulf nations. Visitors

should make careful effort to adhere to local customs and courtesies so as to not

offend the host nation. Some do’s in the Qatari social system include shake

hands and be friendly, accept tea and other beverage when offered, follow

conversation carefully and travel in a group. At the same time, avoid “suggestive

clothing”, do not show the bottom of the foot to someone, and never use your left

hand, and refrain from public acts of disrespect.

Supplies (Commodities) and Services

Qatar’s economy is dependant on the sale of oil and natural gas. Since the

1950's, the government has earned much income from oil exports and used it to

develop Qatar. Oil is the number one producer for exporting. There are

recoverable oil reserves of 15.2 barrels. Crude oil has gravities in the 24 o-40




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API range. The government owns and operates the oil wells and refineries; flour

mills; a fishing fleet; and plants that produce fertilizers, cement, steel,

petrochemicals, and plastics. Fertilizers are Qatar's second most important

export. Qatar produces enough vegetables for its people, but must import much

meat and other food, and most manufactured goods. The government aids grain

and fruit cultivation by distributing free seeds and insecticides. Qatar’s rapid

growth in population over the past several years indicates that the nation may be

rapidly reaching its capacity to provide services; however, much of the rise in

population has been due to an influx of service workers. (CIA fact book on the

CIA Web Page) The Army Contracting Agency has established a Directorate of

Contracting in Doha to support the US Forces in the region. This joint

organization has established contracts for most of the services we will require,

but we must provide funding to use these instruments. (Qatar Contracting

Command briefing) The Qatar Electric & Water was formerly a government

organization and was only privatized in 2002. The government has added

significant water desalinization capability over the past ten years and is currently

operating at less than 75% of capacity. (Department of Energy Web Page)




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Type of Service                    Contractor                                 $ to Date
Laundry                            NIGP/QIT                                   $ 438K
Water                              Gulfa, Al Rayyan, Al Manhal                $ 425K
Ice                                NIGP, LaNouvelle                           $ 5K
Sewing                             NIGP                                       $ 18K
Medical                            American Hosp; Doha Clinic                 $ 50K
Dental                             Family Dental; Dr. Sarah &Debbie           $ 100K
Optical                            Qatar Optics                               $ 50K
Express Mail                       FedEx; DHL; UPS; Nat’l Air Cargo           $ 530K
Communication (Cell Phones)        Q-Tel                                      $ 320K
Transportation / Heavy Equip       QTTC                                       $ 1M
Hazardous Waste                    Boom Waste                                 $ 180K
Electrical/Water                   Qatar Electric & Water                     $ 50K
Office Supplies                    NIGP/GLS                                   $ 208K
R&R                                Venture Gulf/Sahara Tours                  $ 65k
Vehicle Maintenance                Jaidah Motors                              $ 22K
Security Fencing                   TradeQuip                                  $8.1M
Asphalt Paving / Sidewalks         TradeQuip                                  $1.2M
Copiers                            Darwish                                    $1.8M
Texas Barriers                     GSCS                                       $1.3M
Cable TV                           Nova-Tech                                  $800K

Local Vendor Base

A. The local vendor base is narrow in many respects. One such example

is that local business practices call for companies to be “sponsored”;

therefore a large company may have numerous small branches.

However, many of the independent “mom and pop” ventures do not have

the capital for large projects. Therefore, many of the larger solicitations

and contracts are spread between a limited number of companies that

were capable of fulfilling the contract requirements. Prices are competitive

between sources but finding capable and qualified sources sometimes

proved difficult. Another concern was shortages of supply and limited

stock. The majority of items could be supplied locally, but in small



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quantities. In order to fill requirements, it may be necessary to purchase

small quantities through several different vendors. Repeat purchases of

like items may not always be possible through the same vendor since

stock would deplete. There are no local distribution warehouses for many

of the items. There were a lot of sources in Doha, Qatar and in locations

surrounding Doha. Many of the vendors formerly based around Prince

Sultan AB, Kingdom of Saudi Arabia relocated to Doha, which increased

the vendor base that was initially in Doha. Great quantities of supplies are

not available at present; however, the booming market is changing at a

rapid pace. Sources are available in the local area that can fill just about

any requirement. It is often beneficial for the CCO to utilize so-called “ten

percenters” to purchase merchandise. This allows the Contracting Officer

to minimize time spent locating sources, limit communication issues, travel

time, and method of purchase issues encountered when trying to source

out goods from small shops.

Real Property and Facilities

Other than a couple of small sections set aside for foreign ownership, real

property ownership in Qatar is limited to citizens. There are adequate facilities

available at a reasonable price within the major cities, but it is non-existent

outside the built-up areas. There is ample property and facilities available for

rent near the major existing military facilities, but the first priority may be to

attempt adding capabilities within the existing compounds to take advantage of

the existing security systems.




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Significant Business Practices

Local businesses generally open at 0800, close at 1200, reopen at 1600 hours,

and remain open until 2000 to 2200 hours. The Qatar population is 95% Muslim

and the Qatar calendar is focused around Arabic holidays including Ramadan.

Ramadan occurs annually, but the period changes as it is based on the lunar

cycle. The following are Holidays observed throughout Qatar:

      1 January - New Year's Day

      6 August - H.H. Sheikh Zayed Bin Sultan Al Nahyan's Accession Day

      2 December - National Day

      Movable Public Holidays

      Feb 22 - Islamic New Year

      May 2 - Prophet's Birthday

      Sep. 12 - Lailat al Miraj

      Oct. 15 - Start of Ramadan (not a holiday)

      Nov. 14 - Eid Al Fitr

      Feb. 2 - Eid Al Adha

The typical work week begins on Saturday; government sections close on

Thursday and Friday and the public sector closes on Friday. The majority of

local vendors speak fluent English. Although language barriers are not an issue,

there are difficulties with metric versus U.S. standards of measurement. The

metric system is the standard system of measurement.

Gender plays a minimal role in business practices. Doha is an extremely

westernized city and the most vendors will not have difficulty dealing with




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females in the male-oriented business society. The Muslim community is

referential based society and so the family heritage or tribe is often more

important than the rank. Within the Qatar military, this means that rank does not

always equate to experience.

US Coordination

The defense attaché is LCDR John Arnold, USN. His office is with the US

embassy located in Doha at 22 February Road, Al Luqta District, Doha, Qatar

mailing address: P.O. Box 23, Doha. Tel.: 974-488-4161; fax 4884150. The

embassy is open Sunday through Thursday (Qatar's workweek), but is closed for

both U.S. and Qatari holidays. The US Ambassador is Chase Untermeyer.

Ambassador Untermeyer served in the United States Navy during the Vietnam

War as a destroyer officer in the Pacific and as aide to the commander of U.S.

naval forces in the Philippines. (State Department Web Page)

Military Cooperation, Treaties and Agreements

Qatar has signed defense pacts with the U.S., U.K., and France. Qatari forces

played an important role in the first Gulf War, and Qatar has supported U.S.

military operations critical to the success of Operation Enduring Freedom and

Operation Iraqi Freedom. Qatar hosts CENTCOM Forward Headquarters. Qatar

is not a signatory to the Vienna Convention on Consular Relations or to any other

bilateral or multilateral consular accord. (State Department Web Page) Qatar is

signatory to an alphabet of agreements, but does not actively participate in most.

(Qatar is member of ABEDA, AFESD, AMF, FAO, G-77, GCC, IAEA, IBRD,

ICAO, ICC, ICRM, IDB, IFAD, IFRCS, IHO (pending member), ILO, IMF, IMO,




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Interpol, IOC, ISO, ITU, LAS, MIGA, NAM, OAPEC, OAS (observer), OIC,

OPCW, OPEC, UN, UNCTAD, UNESCO, UNIDO, UPU, WCO, WHO, WIPO,

WMO, WTO, and the WTOO.)

US Statutes, Public Laws, and Embargoes, Import Restrictions

Qatar enjoys “most favored nation” status with the United States and does not

have any embargos. (A copy of the agreement is available on the United States

Trade Representative web page listed below.) In January, Qatar lifted the last of

its bans on poultry and eggs from the United States. (US Department of

Agriculture web page) Qatar is a Muslim nation and the importation of pork

products or pornography is strictly prohibited. (ARCENT Web Page) Qatar is in

the CENTCOM AOR and the organizations there are tied directly to the war on

terror in Iraq; therefore, the simplified acquisition threshold (SAT) for

procurement is currently set at one million dollars. The Directorate of Contracting

in Qatar does not have a waiver for FAR part 5 publicity requirements. The

current list of open procurements is found at www.militarycontracting.com. (Army

Contracting Agency Southwest Asia command briefing dated March 2005.)

Analysis

The United States Government has invested heavily in its partnership with Qatar.

Units located in Qatar include the US Central Command Forward Headquarters;

the US Special Operation Command- Central Command; the Army Central

Command – Qatar; the 22nd Marine Expeditionary Unit; the Army Material

Command – Southwest Asia; the 25th Signal Battalion; the National Imagery &

Mapping Agency; the Federal Bureau of Investigations; the Military Transport




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Management Command; and 2nd Battlefield Control Detachment of the 1st

Military Intelligence Battalion. This significant presence ensures that there are

adequate supplies and services in the area, but also indicates that our task force

will not be the first in line to receive support. While we can establish independent

contracting efforts, we will be competing for vendors with the better established

and funded Central Command.

Resources cited.

CIA Fact book. http://www.cia.gov/cia/publications/factbook/geos/qa.html

ARCENT. http://www-qa.arcent.army.mil/

United States Trade Representative.

http://www.ustr.gov/assets/Trade_Agreements/Regional/MEFTA/asset_upload_fil

e318_3536.pdf

Department of Energy. http://www.eia.doe.gov/emeu/cabs/qatar.html#stats

AOL Country Page.

http://www.aolsvc.worldbook.aol.com/wb/Article?id=ar453700#h3

United States State Department.

http://www.state.gov/g/drl/rls/hrrpt/2004/41730.htm




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