Qatar: Cementing influence after unrest

20 September 2012

Having helped support the Arab uprisings in 2011, Qatar now seems intent on buying influence with the new generation of leaders in North Africa

It was a short visit, but an expensive one for Sheikh Hamad bin Jassim bin Jaber al-Thani when he travelled to Egypt earlier this month. The prime minister and foreign minister of Qatar landed at Cairo International airport on 5 September and left the following day. During his brief time in the country, he had pledged $18bn in fresh support for the Egyptian economy.

It was the latest sign of Doha’s willingness to support the Arab revolutions. Having helped to foster the uprisings with a mix of diplomatic, military and financial support, as well as the efforts of the Al-Jazeera news channels, Qatar now seems intent on cementing its influence with the new generation of leaders in North Africa. Cost is not an issue according to Sheikh Hamad. “There is no ceiling for cooperation or investment in Egypt,” he said during his visit.

Qatar’s North Africa focus

It is not just Cairo that has benefited from this charm offensive. The Qatari government won praise from Tunisia’s caretaker president, Moncef Marzouki, on 11 September, when it agreed to expel Sakher el-Materi, the son-in-law of ousted president, Zine el-Abidine Ben Ali, from Doha.

Qatar has also invested in several tourism and real estate projects in Tunisia, such as the Tozeur Desert Resort backed by Qatari Diar, and the two governments have signed memoranda of understanding for several industrial projects, including the Sra Ouertane phosphate plant and the Skhirat oil refinery.

Qatari companies have been expanding in Libya as well. Qatar Airways resumed flights to Tripoli in February, having started flights to Benghazi in November 2011. In April, Qatar National Bank (QNB) bought a 49 per cent stake in Libya’s Bank of Commerce & Development.

In the competition for influence in the new post-revolutionary states of North Africa, it is clear that the greatest prize is Egypt. With a democratically elected Islamist government in Cairo able to claim a degree of legitimacy that few others in the region can, it could re-emerge as one of the most important centres of power in the region. This political and diplomatic potential, as much as its large population and well diversified economy, means that Egypt will be the focus of efforts to win influence – not just by Qatar but by other regional and global powers.

It’s about entrenching Qatari influence in the post-regime change North African landscape

Kristian Coates Ulrichsen, London School of Economics

“Doha is trying to maintain its regional influence and leverage over what is going to be the most influential government in the Middle East, by virtue of Egypt’s size and the fact that it has a Muslim Brotherhood government,” says Kristian Coates Ulrichsen, a research fellow at the London School of Economics. “It’s about entrenching Qatari influence in the post-regime change North African landscape.”

This strategy also fits in with a wider aspect of Qatari policy over recent years. “This could be an outgrowth of their interest in diplomatic mediation and conflict resolution,” adds Coates Ulrichsen. “They’re trying to use their resources to stabilise countries around the Middle East, and to give the countries in transition the tools to alleviate some of the socio-economic challenges that brought down the previous governments.”

Even before Sheikh Hamad’s visit in early September, Qatar had promised substantial support to the new government in Cairo, pledging to deposit $2bn in the Central Bank of Egypt to shore up the public finances. The first $500m tranche was transferred in August and the remaining $1.5bn will be paid in three instalments before the end of the year.

Egypt investments

The additional $18bn announced earlier this month will be invested over the coming five years. Speaking at a press conference in Cairo on 6 September after talks with President Mohamed Mursi, Sheikh Hamad said that $8bn will be allocated to a number of projects in the East Port Said region, including power plants and liquefied natural gas (LNG) facilities. The remaining $10bn will be used to finance a large tourism project along the country’s northwest coast.

Feasibility studies for all these schemes are due to begin with designs drawn up in the near future, according to Sheikh Hamad. In addition, Qatar is also planning to invest in a number of housing projects, including in the Fifth Settlement area of Cairo and the Red Sea resort towns of Hurghada and Sharm el-Sheikh.

Speaking at the same press conference, Egyptian Prime Minister Hesham Qandil added that there are also plans to provide more direct flights between the two countries and to ease travel restrictions for each other’s citizens.

The friendly nature of the relationship between Doha and Cairo is itself a sign of the progress that Qatar has made in its diplomatic efforts since Hosni Mubarak was forced to step down as president in February. Before the revolution the situation was very different, as was made clear in a January 2010 cable from the US embassy in Doha, published by Wikileaks.

In the cable the charge d’affaires in the US embassy in Doha, Mirembe Nantongo, described a revealing conversation between a senior Egyptian diplomat in the city, Adham Naguib and his US counterpart. At the time, Naguib was the deputy chief of mission at the Egyptian embassy in Qatar.

Qatar has always stood out from the other Gulf states by being much more hospitable to the Muslim Brotherhood

Kristian Coates Ulrichsen, London School of Economics

He was quoted in the cable as saying that Mubarak and the rest of the Egyptian leadership was “at the end of its tether” with Qatar’s leaders and that Egypt would “thwart every single Qatari initiative that Doha tries to put forward” during its term as president of the Cairo-based Arab League. According to Naguib, the then Egyptian foreign minister, Ahmed Aboul Gheit, described Qatar as a “small and upstart country that would pretend to take the place of the great and noble Egypt”.

Qatar’s Darfur efforts

The chief complaint that Egypt seemed to have with Doha at the time was its involvement in trying to find a negotiated settlement in the Darfur region of Sudan, which Cairo viewed as being firmly in its sphere of influence.

The tone is clearly very different today, but despite the improvements Qatar does not have it all its own way when dealing with Egypt or the other North African states. Its great rival for influence in the area is Saudi Arabia which, like Qatar, can use its vast hydrocarbons wealth to support its regional ambitions. To date, however, Saudi Arabia has not been willing or able to move as deftly as Qatar and has, at times, appeared too closely wedded to the former powers in both Tunisia and Egypt.

Riyadh continues to offer a refuge to ousted Ben Ali, for example, despite repeated calls from Tunis for him to be returned to them so that he can be tried. In the wake of Doha’s decision to expel Ben Ali’s son-in-law, Marzouki called on Saudi Arabia to “follow Qatar’s example and extradite ousted president Ben Ali to Tunisia”.

Relations between Saudi Arabia and Egypt have also been strained at times. In April, Saudi Arabia closed its embassy in Cairo after large protests there against the arrest of Egyptian human rights lawyer Ahmed al-Gizawi in the kingdom. The embassy reopened in May and Saudi Arabia has since pledged additional aid.

At times, Saudi Arabia and Qatar appear to favour different elements of the elite within Egypt. A public sign of Riyadh’s preferences came when Field Marshal Hussein Tantawi, who at the time was head of Cairo’s Supreme Council of the Armed Forces (SCAF), was seated next to King Abdullah bin Abdulaziz al-Saud at the funeral of Crown Prince Nayef in the Grand Mosque in Mecca in June.

It was also significant that, in August, President Mursi chose Saudi Arabia as the destination of his first official international visit, apparently keen to forge a better relationship with Riyadh.

Qatar has an advantage over some of its fellow GCC states in that it has never shared their level of hostility towards the Muslim Brotherhood. Since 1962, Doha has been home to the preacher Yusuf al-Qaradawi, who is closely linked to the organisation and who has been given a platform to reach the rest of the Arab world via regular appearances on Al-Jazeera news channel.

“Qatar has always stood out from the other Gulf states by being much more hospitable to the Muslim Brotherhood; it has always been much more open to it than the UAE or Saudi Arabia,” says Coates Ulrichsen. “Now, they’re just trying to translate that into much more sustainable leverage going forward.”

Neither is Qatar as antagonistic towards Iran as Saudi Arabia, the UAE or Bahrain which, given Mursi’s efforts to improve relations with Tehran since he came to power, could also prove helpful.

Rebuilding efforts in Egypt

However, such political issues are probably secondary considerations for the post-revolutionary states as they try to rebuild their economies and their societies. The economies all had significant structural problems before the revolutions. These problems remain and the benefit of the assistance coming from the Gulf is that it will be provided without the sort of conditions that the IMF or other international institutions might impose.

The balance of financial and political motives from the donors is not quite so clear. Certainly, Doha’s wealth means it can afford to invest $20bn in Egypt without any noticeable impact on its own fiscal position, but it has also tended to be a sophisticated investor in the past.

“Egypt is a central state in the region and the opportunities there are immense,” says David Roberts, deputy director of the Rusi Qatar think-tank. “If the new government can stabilise the country, one would assume that it could resume its place as a key state in Middle East politics. If Doha can get in at the beginning, then that investment and goodwill might return dividends in the future.”

According to reports by the official Qatar News Agency, Sheikh Hamad has said that the investments Qatar is making in Egypt are designed to be profitable for both countries, as well as providing much needed jobs for locals. That may well be true and should be easy to calculate over the coming years. The diplomatic and political influence will be harder to quantify, but could be just as valuable.

Key fact

Doha pledged $18bn in fresh support for the Egyptian economy in September

Source: MEED

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