Politics aside, Qatar has so far managed to survive the gripping blockade imposed on it by Gulf heavyweights headed by Saudi Arabia, the UAE, and Bahrain. Iranian planes loaded with foodstuffs have been sent to the country, minimizing damage done to it by the closure of its border with Saudi Arabia, Qatar’s only land border.
After initially dropping by 10% in value, the country’s stock exchange quickly picked up and has since stabilized, while its sovereign wealth fund of US$335 billion remains intact. Qatar is still able to export its liquefied natural gas, generating nearly US$2.7 billion per month for the country’s economy. Macro-level damage remains minimal, but what if the crisis drags on?
Sanctions, written off as ineffective by Qatari economists, will soon start to bite on all sectors of the economy: on tourism, services and banking, and on future investment. They have already had a terrible effect on Qatar’s reputation in global markets. International companies might think twice before doing business again with Qatar — a country that was seemingly transformed, literarily overnight, from a dazzling and stable hub for foreign investment into an outcast in the family of Gulf nations.
Gulf nationals living in Doha have already packed their bags and returned home, dealing a heavy blow to the price of real estate and to cash flows throughout the country. Non-Qatari money amounts to 24% of all deposits in the Qatari banking sector, according to its Central Bank — a high figure, when compared to 1.2% in Saudi Arabia and only 12% in the UAE. Of the country’s 2.7 million residents, only 10% are Qatari nationals, after all. Over 20,000 were from Saudi Arabia, 15,000 from Bahrain and the UAE. They were allowed to buy property and open businesses in Qatar — a privilege now revoked by the Doha Government.
International companies might think twice before doing business again with Qatar — a country that was seemingly transformed, literarily overnight, from a dazzling and stable hub for foreign investment into an outcast in the family of Gulf nations
Qatar’s trade with Riyadh once stood at US$2 billion, but that is now down to zero. It traded US$7 billion with the UAE and US$500 million with Bahrain. Total trade with the Gulf accounted for 86% of the country’s business with Arab countries and 12% of its international trade. If not handled soon, this sea-change will impact on the overall economy of Qatar and the living standards of its citizens, leading to shortages in commodities that Iran cannot provide and a huge decline in exports, which might drag factories and plants into bankruptcy.
Some firms have not stopped doing business with Qatar – firms such as the Dubai-based contractor Drake & Scull International, which has US$136 million worth of projects in the now-sanctioned emirate, including a 343 million dirham (US$93.4 million) contract to build the Doha Metro, which is due for completion by 2020, ahead of the Fifa World Cup. Damac Properties Co, another Dubai firm, is presently involved in the building of a 31-story luxury tower in Doha. It too has not walked away. Abu Dhabi’s Dolphin Energy, which transfers two billion cubic feet of Qatari gas to the UAE and Oman every day, is also still working.
Until recently, there were 70 flights between Qatar and these three Gulf countries every day. That figure has also been reduced to zero as Qatar Airways has been banned from landing in Dubai, Abu Dhabi, Manama, and Riyadh. Qatar Airways is a major contributor to Qatar’s GDP and the closure of Gulf airspace to it will force it to find alternate routes for its flights, at rising costs. As the company finds itself subjected to systematic corporate slaughter, other carriers – including Gulf Air, FlyDubai, Emirates and Etihad Airways – are bracing themselves to take over its market share.
The wise men of Qatar are asking how they let themselves get dragged into such a confrontation with Saudi Arabia — a powerful country that has never lost any of its economic wars in the past. Others, though, remain undaunted: for now, they still ooze confidence, believing Qatar can weather the storm and that, regardless of how long it takes, international firms and heavyweight CEOs in oil, gas, banking, and construction will intervene on their behalf and force the Saudis to end the crisis.
Nonsense. Qatar may lose some, and gain even more. Iran is not here alone in the universe. How come that author seems to miss the elephant in the room. It is called Russia and China — key supporters of Iran. The strenght of Shanghai Cooperation Organization is rather obvious, but if you go by your average analysts that take their cues from the Western narrative of the universe, one would never know such thing existed. Saudi project of reshaping Sunni world by destroying nation-states, and creating a network of medieval style caliphates, emirates, sultanates — has failed. Challenging Qatar will not resolve all Saudi problems. To the contrary, it will deliver Sunni political leadership to Egypt, the country that is supportive of sovereign nation-states, and has good realationships with all major world’s powers. Egypt has challenged US on Libya’s governance, and supported Tobruk government against US installed "unity" government. Egypt is a force in Arab world, and can no loger be blackmailed financially as it was following the near civil war between Morsi’s supporters and Saudi supported Salafis. With UAE stabbing KSA in the back by taking over the secession minded South Yemen, and Oman supporting it — who is left to be KSA true friend in the Gulf? Kuwait? With 40% Shia population, Kuwait is eager to be on good terms with both Iran and Iraq. Who is left? Ah, yes. Bahrain. The one occupied by Saudi forces, following an uprising of over 80% of Shia population of that country. But I forgot the support of the mighty Yemen "president’ in exile. The one that does not control any Shia populated north, and increasingly is losing all that is left in the South to UAE.
It is the near end of ISIS in Iraq and Syria that is bringing on these tensions. The losers, Saudi Arabia and its backer US neocons that are slapping helpless Trump, are looking for a way out. Opening another front always looks like a way to go to US always gambling neocons. They are running out of the places to destabilize in the Middle East. Big players, Egypt, Iraq, Turkey and Iran are steadily working towards stabilizing the region — and the results have started to show. So, unless neocons decide to try a nuclear option, the slow and grinding process of reestablishing order is moving apace. Even the announced referendum on the independence in Iraq’s Kurdistan is being led not by US faction, but by Barzani, the leader of Peshmerga who has already negotiated economic deals with Baghdad, and has good relationships with Erdogan. This undercut the plan to use Iraqi Kurds as a destabilizing factor. Now, Kurds in Syria cannot give US the needed coverage of Syria’s border with Iraq, as they are thin on the ground, and Arab population liberated from ISIS does not want them to be the overlords. Without Afrin Kurds, they are thin on the ground, and past Raqqa, cannot really make much progress. How surprising is it then, that Turkey is being accused of threatening poor Afrin Kurds — as they are contemplating a desparate move, to cut through Turkey controlled corridor from border to Al-Bab, where Syrian goverment control begins.
So, what now? Only if US decides to openly enter Syria war, and occupies former ISIS controlled land. But with the crisis in the Gulf, can US afford to be alone in Syrian conflict? And if it gets an "ally" it will be for the sole purpose of getting out of the mess.
The view is somewhat unduly pessimistic. Sure, all of the possible consequences CAN happen, but the author does not take into account the consequences to consequences. There is no reason — short of war — that Saudi Arabia will prevail, and force Qatar to capitulate. I am afraid that this adventure is just one more juvenile thing that the new Saudi Arabia has displayed since the young prince — and now Crown Prince, took charge. Qatar has been always different from other Gulf nations, in that it diversified its international relations and trade. It has access to international waters, and its sky routes are not affected much by the closure of air space. Autor is unwise to point out possible Iran’s inability to supply Qatar’s food market. He is forgetting Iran’s standing in Shanghai Cooperation Organization, and there is absolutely nothing Qatar will be in need off, that cannot be provided by SOC members and associated countries. The demands have already been softened — just to curtail relationship with Iran, not to cut it off. But I doubt that this will work, as the core demand is to subjugate Qatar’s foreign policy to Saudi Arabia.
Let’s look at the GCC. UAE is undermining Saudi Arabia in Yemen. It has already taken control of the secessionist-minded South, and is already clashing with the "army" of mercenaries that seem to represent the Government in exile Saudi Arabia supports. What are the chances of KSA taking over in Sana’a? None. What are the chances KSA will force UAE, and Oman — that supports the secession — to back off? None. What are the chances that Kuwait will come out strongly in favor of KSA plan against Qatar? None. Kuwait has 40% of Shia population, many of them Iranians, and is measuring every word to avoid domestic problems. And Bahrain? Another Saudi bright idea to invade and occupy the tiny country with 90% Shia population, ruled by despotic Sunni absolute ruler? Hmm. Bahrain will be the muscle behind Saudi threats against Qatar? So, now all we have is Egypt. Egypt — think about it. Only weeks ago, Saudi Arabia was playing high and mighty, cutting off fuel delivery to Egypt because it bolted the Yemeni alliance. And now, the one and only ally with a real military and vast population — and popular president? Yes, Egypt is there to take Saudi Arabia in hand, and save it from itself. Egypt has good relationship with Iran, and has patched up relationship with Turkey. It has good relationship with Russia and China. It applied for the memership in Shanghai Cooperation Organization. It is supporting a rival government in Libya that is against US installed "unity" government?
Qatar is the litmus test of various relationships in the Gulf, as the global relationships are shifting. There will be realigning. With US having its Fifth Fleet in unstable Bahrain — with 90% of population living without basic rights, and now its largest military base in Qatar being subject to the bargaining among the various frenemies?
Sure, Qatar will see changes, for sure. But some people will be leaving, others will be coming. Good pay and living conditions will always attract qualified people to work there. As only 10% are Qataris, what do you think — Qatar is in any danger of not being able to keep them happy? Yuan banking is on the rise in Asia, and pressure has already been exerted on KSA to trade in Yuans for oil deliveries to China. Things are by far more complicated then they appear, and it is not Qatar that is the only one being affected.
Sure, the rather linear thinking of the new leadership in Riyadh may find it unsettling that as Iraq and Syria are getting rid of ISIS and assorted other Islamists and Al-Qaeda, that the gas pipeline from the joint Qatari-Iranian field will be able to cross over Iraq and Syria into Turkey, join Turkish Stream from Russia and provide a real alternative to gas supply to Europe — and the end of the rusting Ukrainian pipeline system. This is why US — equally linear thinking generals — is focusing on preventing Syrian and Iraqi armies to meet at their joint border. But these efforts are crumbling.
It is Syria unravelling that is causing the anger in the Gulf. It is Turkey’s participation with Russia and Iran to shape peace agreements in Astana that is the cause of anger. And Qatari alliance with Turkey — of course. Because being allied with Turkey means being allied with Iran and Russia, and furher afield, the entire Eurasian nework of cooperation, called Shanghai Cooperation Organization.
I would say, they all rely on each other. Iran needs Russia and China, and is doing heavy lifing in the Middle East. But so it Russia, attracting against itself the collective ire of the West. China is doing some major heavy lifing in the Pacific, as well as oiling the future infrastructure, from Balkans accross Central Asia to Far East — rebuilding the global connectivity. And from Asia to Africa, from Africa to Americas. There is plenty of heavy duty lifting for all three. But let us not forget, that Turkey is becoming another heavy duty lifter. These are surely early days, but the indications are surely here. Turkey is smack in the middle of Qatar crisis, and now clearly on the opposite side from the Oil Kingdom.
And now that India and Pakistan have become permanent members of SCO this June, it is to be expected that in few years both countries will be doing some heavy duty lifting — along with dealing with their colonial past and conflicts that arose from it.