Can Qatar find a diplomatic solution?

08 June 2017

Doha’s response to the crisis will be key to determining how it will develop 

The action by Saudi Arabia, the UAE, Bahrain, Egypt and several other Arab governments to cut diplomatic ties with Qatar in addition to blocking transport communications has left the small peninsular state isolated and exposed.

The unexpected moves by Qatar’s closest neighbours and allies caught the region by surprise.

Although it has been widely known that Saudi Arabia, Egypt, the UAE and Bahrain have long been frustrated by Doha’s foreign policy activities that have shown support for the Muslim Brotherhood in Egypt, Islamist factions in Syria and friendly relations with Iran, the severity of the blockade reveals a much deeper mistrust than had previously been realised.

It is clear now that Qatar’s neighbours want to force change in the peninsular state, in policy at least, if not leadership.

It is unclear what the particular trigger was for the action. The schism has been building for years. But recent comments alleged to have been made by Qatar’s Emir Sheikh Tamim bin Hamad al-Thani apparently confirming Doha’s controversial positions, along with a reported ransom paid to militants in Iraq for the release of high-ranking Qatari hostages, appear to have been the tipping point.

The re-engagement of the White House in regional security is clearly an additional factor following US President Donald Trump’s visit to Saudi Arabia in May.

It will be damaging for the region should the dispute run far beyond the summer but Qatar will be worst hit.

On 7 June, ratings agency S&P downgraded Qatar’s credit rating and put the country on negative watch. The port blockade will severely disrupt the import of commodities to Qatar, particularly food and construction materials. This will delay projects and could see international companies leaving the country, in addition to those from the rival states. Depopulation as a result of the departure of expatriates would severely hit the wider economy as would the impact on Qatar’s drive to become a transit hub in the region.

At $261bn, Qatar is the third biggest projects market after Saudi Arabia and the UAE. It currently has about $7.2bn of projects under bid evaluation. So far nothing has been stopped or delayed, but the risks are clear and present. The biggest questions of all are about the impact on the World Cup 2022 if key projects are significantly delayed.

Despite receiving the support of Turkey and Iran, Doha is isolated and has very little room for manoeuvre.

It is clear that Abu Dhabi, Riyadh, Cairo, Manama and the other capitals want nothing less than a full and public statement from Qatar expressing complete support and alignment with their views.

This will be politically difficult for Doha to deliver, but with Kuwait acting as mediator it is to be hoped that a rapid diplomatic solution can be found.



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