Qatar is one of the easiest nations to enter for international retailers looking to open up shop in the region, asset consultancy firm EC Harris has concluded.

The company’s report, the annual Retail International Programme Expansion Index, ranked Qatar as seventh out of 40 “important retail markets” worldwide, in terms of ease of accessibility for foreign firms. Qatar came in four spots above the UAE, and six above neighboring Saudi Arabia.

The United Kingdom tops the index, which scored countries in five key areas that EC Harris said are vital for a successful expansion. The criteria include:

• Infrastructure (e.g construction and supply chain capability);
• Project delivery (e.g land access, permit/utility processes);
• Legal framework (e.g property rights);
• Construction and supply chain capability (local quality and quantity); and
• Business environment (ie labor freedom and attitude toward foreign entrants).

Qatar has moved up four places since last year’s rankings. It scores highly on infrastructure, but loses points in the Project Delivery and Business Environment categories – with the latter score likely reflecting Qatar’s restrictive labor laws.

Increasing costs

Addressing problems with project delivery, EC Harris released a report earlier this year warning that construction inflation – the rising cost of fulfilling Qatar’s ambitious expansion plans –  could reach 18 percent per annum by 2023 if it continues unchecked.

The report analyzed commodity prices, local market competition, labor costs and the available expat workforce, and concluded that Qatar’s 2022 World Cup building program would continue to drive up costs significantly.

EC Harris suggested that to ease pressure on costs, there should be a relaxation of labor regulations, so that it is easier to hire manpower and import materials. It also recommended staggering major construction projects so that a huge peak just before 2022 could be avoided.

Thoughts?