Qatar to boost international investments

Qatar signalled at the weekend that it was ready to increase its international investments and donations to bolster its overseas standing in the face of an embargo by its Gulf neighbours led by Saudi Arabia.

Background

Qatar is a country located in Western Asia, occupying the small Qatar Peninsula on the north-eastern coast of the Arabian Peninsula.

In the 21st century, Qatar emerged as a significant power in the Arab world both through its globally expanding media group, Al Jazeera Media Network and reportedly supporting several rebel groups financially during the Arab Spring.

The ongoing diplomatic crisis began in June 2017, when Saudi Arabia, United Arab Emirates, Bahrain, Egypt, the Maldives, Mauritania, Senegal, Djibouti, the Comoros, Jordan, the Tobruk-based Libyan government, and the Hadi-led Yemeni government severed diplomatic relations with Qatar and banned Qatar airplanes and ships from entering their airspace and sea routes along with Saudi Arabia blocked the only land crossing.

The Saudi-led coalition cited Qatar's alleged support for terrorism as the main reason for their actions, insisting that Qatar has violated a 2014 agreement with the members of the Gulf Cooperation Council (GCC).[3] Saudi Arabia and other countries have criticized Al Jazeera and Qatar's relations with Iran.

Analysis

Qatar has pledged to increase its foreign investments despite the ongoing diplomatic stand-off with Saudi Arabia and UAE. In two days of diplomatic and financial overtures at the Doha Forum, a Davos-style gathering in the Qatari capital to discuss business and global affairs, Qatar demanded the 18-month blockade against it be lifted.

Speaking at the conference, Tamim bin Hamad Al Thani, the Emir of Qatar, said the only way to resolve the crisis between Qatar and the blockading countries of Saudi Arabia, United Arab Emirates, Bahrain and Egypt was by the others “lifting the siege and resolving difference through dialogue and non-interference in other countries’ internal affairs”.

Saudi Arabia and its close ally the UAE last year accused Qatar of sponsoring Islamist extremism, a charge denied by Doha. The embargo cut off traditional import routes and closed down lucrative destinations for Qatar Airways, which had to reroute flights around neighbouring airspace.

As Qatar prepares to host the Fifa World Cup in 2022, the government has had to redirect staple goods and building materials from Saudi Arabia and the UAE via Turkey, Iran and Oman. Qatar has also opened new direct trade links to keep a limit on costs.

Sheikh Mohammed bin Abdulrahman Al Thani, the minister for foreign affairs, said there had been no breakthrough at the recent meeting of the Gulf Co-operation Council.

“There is no progress yet happening with the blockade,” he said indicating that any gesture towards reconciliation had to come first from the blockading states, in particular from Saudi Arabia.

“What can be required from Qatar as a gesture? Qatar was the subject of this attack now for more than 18 months. Qatar was the victim. Qatar wasn’t the one who attacked any of the blockading states,” Sheikh Mohammed said. He added that although Qatar was willing to enter a dialogue with the other states, “the only thing you need to understand before you come to the table is that our sovereignty is not a subject for negotiation”.

To increase pressure from the global community on Saudi Arabia at a time when it is under the international spotlight after the brutal murder of journalist Jamal Khashoggi, Qatar has stepped up its efforts to demonstrate it is an important provider of finance to advanced economies and to global efforts to combat terrorism.

Qatar pledged $500m to various agencies of the United Nations, including $28m annual package for the UN Development Programme, $5m a year for the UN Children’s Fund and $15ma a year for the UN Security Council’s counter-terrorism committee.

Sheikh Mohammed, who also chairs Qatar’s sovereign wealth fund, the Qatar Investment Authority, also pledged that the fund would begin to diversify the fund from its traditional European investments to the US and other countries.

Assessment

Our assessment is that Qatar is finding new trade partners and using investments to counter the growing intensity of its diplomatic isolation. We believe that Qatar is shifting away from the Saudi-dominated OPEC system to more independent energy and international investment policy.