When Qatar Turns Adversity into Opportunity

Date:

Sumera B Reshi    Qatar 

Qatar’s independent foreign policy led to it supporting popular demands for democratic change in the Arab world called Arab Spring which started in the spring of 2011 and this step was perceived by its neighbors as a real threat. Qatar became the cynosure of Arab Quartet that hatched a plan to teach it a lesson.

Qatar diplomatic crisis began in June 2017 when Arab Quartet imposed a land and sea blockade aimed at bringing Qatar to heels over its alleged support for terrorism. These measures were designed to coerce Qatar to comply with a list of demands that involved alleged support for Islamic extremists throughout the Middle East, including within the four countries — Bahrain, Egypt, the United Arab Emirates, and Saudi Arabia. After two years of economic blockade, Qatar hasn’t ceded to any of their demands. Instead, it has proved to be far more robust than they thought.  Behind Qatar’s resilience is an enormous $340 sovereign wealth fund, a part of which it cashed into when the sudden crisis was imposed upon Qatar. However, instead of economic catastrophe, Qatar has forged ahead in everything from innovation, business development, and trade, leaving many of its detractors in the dust. In a way, the blockade has helped Qatar to safeguard its sovereignty and independence, and its business excellence is being recognized worldwide.

Pic:Agencies

Such a crisis isn’t new to Qatar, in the recent past as well, Qatar had led into a crisis. In 2014 Bahrain, Saudi Arabia and the UAE withdrew their ambassadors from Doha as they were irked by the country’s post Arab Spring policies such as its perceived support for the Islamist movements. Nonetheless, the crisis was settled nine months later. Thus, the 2014 crisis taught a very good lesson to the Qatari leadership that it could happen again.  When the Qatar economic blockade was announced, the US President Donald Trump endorsed Arab Quartet’s move. His tweets supporting Arab Quartet and blaming Qatar of supporting Iran surprised his own cabinet and Qatar equally.

 After two years of economic blockade, Qatar seems to have outplayed its rivals. The 2014 crisis taught Qatar the importance of developing contingency plans according to Dr Kristian Coates Ulrichsen, a Baker Institute fellow for the Middle East. Qatar, in response to the regional power play and Trump’s unexpected decision to support the blockade, it hastened efforts to diversify its economy, broaden its international partnerships and reduce its vulnerability to external shocks. However, the blockade is still in place, Qatar has proved strong than it was expected.

Tim Adams in his article in the Guardian, 6 May 2018, has said that isolation acted as a catalyst to Qatar’s long-term vision for itself. The cardinal goal of the ruling family of Qatar, Al Thani is to create a diverse knowledge economy that lasts beyond the gas reserves.  Tim Adams in the Guardian article quoted Sheikha Hind, younger sister of the emir as, “It is not a secret that we are a wealthy society and that maybe nobody even needs to work,” she said.

 “But knowing that you can contribute to developing your country, and allow it to become even more prominent, is something everyone feels pride in. If anything, the blockade helped that. We see a big opportunity to be self-sustainable.”

The Arab Quartet alleged that Al Jazeera’s reporting and editorial stance deepened during the Arab Spring. Al Jazeera supported the uprising rather than the established ruling powers. And as per Tim Adams, this stance was seen as part of the wider pattern in which Qatar sought to build power at home while fueling dissent abroad, keeping trade and diplomatic channels open to Israel while openly funding Hamas, hosting the major American air base, al udeid, while supporting the Islamist Muslim Brotherhood etc.

Everette E. Dennis, dean and CEO of Northwestern University in Qatar since June 2011 believes the blockade has ‘again accelerated this transparency’. Meanwhile, Qatar is lifting visa restrictions and attempting to brand itself as a home of greater free speech. While Saudi Arabia congratulates itself on finally allowing women to drive, while Qatar’s focus is on women education across all the sectors especially engineering. The blockade is not easy, it comes with its own challenges, but where there is a conflict, and there is a resolution as well. As stated by Sheikha Hind in the Guardian articles, ‘now we running rather than walking’.

As per the International Monetary Fund, Qatar’s economy has continued to grow despite the crisis. It isn’t that is didn’t suffer since the blockade but they survived it. Qatar Airways suffered losses, the real estate market experienced a dip. The blockade certainly led to a temporary drop in its economy but it also impelled the oil and natural gas-rich state to strengthen existing ties with non-GCC partners and explore new relationships outside the region.

Existing ties with the GCC’s strategic competitors — Iran and Turkey have been strengthened and Qatar has forged a new economic relationship with Taiwan. While GCC pressure has caused issues with air links between Qatar and the outside world and disrupted investment, trade and travel links, it has not had the crippling effect on the Qatari economy that the GCC may have envisaged. Nor has Doha significantly complied with any of the demands made by the GCC in June 2017. Despite some difficulties, it stood for its pride. Qatar hasn’t stopped its dream nor has it surrendered before the Arab Quartet.

Qatar is also done with the hegemonic policies of the Arab Quartet especially Saudi Arabia and for this reason, it walked out of OPEC which is under the influence of Saudi Arabia  by citing the reasons that it want to focus on the gas product rather than oil. Also, it didn’t attend the GCC meeting held in Riyadh in December and it did so because Qatar doesn’t see Saudi Arabia to be serious about reconciliation and since the quartet hasn’t shown any signs of burying the hatchet.

Certainly, the enmity between Saudi Arabia and Qatar is old and the 2017 bitterness has further strained the relations and unless Saudi Arabia does not stop playing Uncle Sam in the region, the standoff is unlikely to ease.  As of now, the change seems unlikely. The Crown prince, Mohammed bin Salman is toeing his father, King Salman’s line.

An unrelenting war in Yemen, arrests of women activists, the killing of Jamal Khashoggi in the Saudi consulate in Istanbul, haven’t destabilized his grip to power. MBZ is emerging George W. Bush of the Middle East. He wants to stay in power and he wants war with everyone around him.

According to Michael Stephens, Middle East research fellow at London Royal United Services Institute, ‘the Qataris had a two-fold battle to fight, one was to convince world opinion that they weren’t these horrid-terrorist-supporting Bin Laden types and second was to show that the economy was resilient and that it was a good place to invest.’

Indeed in 2017, Qatar suffered an economic slowdown, with its 5.6 per cent growth rate and fell to 4 per cent in 2018 according to the foreign brief report published on 26 August 2018. Economically, it has worked even harder to broadcast the message that it is open for business. It has expanded its investments as far as Southeast Asia, increased exports by as much as 19 per cent, and expanded previously state-owned projects to the private sector, encouraging foreign investment. Remarkably, since June 2017 Qatar’s economy has actually grown. It’s GDP increased by 2.4 per cent in 2018, and a projected 3.1 per cent in 2019.

 And while the GCC’s hard line has damaged much of its Qatar’s regional, it has nonetheless retained and possibly strengthened, its reputation among non-Arab and international partners. In many ways, the blockade can be seen as an unexpected victory however pyrrhic — for outward-looking Qatari diplomacy and perhaps proof that its international ties may offset those severed in its immediate region.

Moreover, it is likely that Qatar will slowly mend fences with its GCC neighbours, most likely starting with smaller and less competitive members like Bahrain and Kuwait, although the latter’s vocal and active political class may complicate matters in this regard. Qatar-UAE and Qatar-Saudi ties will likely take much longer due to the more competitive relationship between Doha and the two largest emirates, particularly in the fields of media, finance, education and investment. Ties with Riyadh will be the most difficult to repair owing to both the history of bilateral incidents as well as the hard (and often unpredictable) line taken by MBS since his accession.

Experts say that the longer-term effect of any blockade, however long it lasts and whatever individual action was taken by GCC members at a bilateral level, is less clear. Qatar will likely strengthen ties with Turkey, and will further improve its non-Arab ties, including with Iran and Israel. The short-term economic decline caused by the blockade may well be offset by even greater access to global investment markets and with them, greater economic diversification.

As for the GCC itself, the overall strategic success of its combined blockade against Qatar demonstrates its ability, previously untested, to ‘discipline’ of its fellow Gulf monarchies and take a united stance in response to a regional issue.

Such a situation may strengthen the organization’s credibility going forward. The long list of demands handed over to Qatar has proved fiasco so far and could fail to bind GCC for any future endeavours.

Besides economic and diplomatic blockade, Arab Quartet launched an intense lobbying campaign in Washington to undermine the US -Qatari relations. To maintain its image, Qatar continues its aggressive international campaign, but Saudi Arabia has faltered. KSA has lost considerable credibility on the heels of the murder of Jamal Khashoggi in Turkey, and its rapprochement with Israel, however subtle, is looked on askance by Gulf hardliners. Riyadh’s ongoing conflict in Yemen is deeply unpopular internationally, and the effects have been felt with countries such as Germany, Canada and Belgium halting arms sales to Saudi Arabia and the UAE (Australia continues to face pressure to follow suit).

So far, Qatar has survived the economic and diplomatic blockade, however, the risks remain. It has maintained its economic growth amid crisis then it can retain its sovereignty.

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