Where does Qatar go? What now for Qatar?

Saudi Arabia along with three of its allies has given Qatar a 48-hour extension on the deadline to comply with a list of their demands.  If Qatar does not agree, then the diplomatic boycott, that has resulted in Qatar losing its air, sea and land links, will continue.

A joint statement that was released through Saudi state news agency SPA noted that the deadline had been extended due to a request from Kuwait.

Background

It has been over three weeks when 9 countries cut off diplomatic ties with Qatar accusing it of funding terror organizations. The countries include Saudi Arabia, United Arab Emirates, Bahrain, and Egypt. While Qatar has denied those charges, it has suffered, the region has essentially been locked out.

Tensions have long existed between Qatar and its neighbours. Saudi Arabia has especially been irked by the seemingly friendly equation shared by Qatar and Iran. In May 2017, the Qatari news agency was reportedly hacked along with a number of its government websites. In that period, articles were uploaded which quoted Emir of Qatar, Sheikh Tamim bin Hamad Al Thani speaking warmly of Iran. Between June 5 and June 6, a number of countries broke ties with Qatar and GCC countries ordered their citizens to leave Qatar.

Analysis

Presently, Saudi Arabia and its allies have provided Qatar with a list of demands that it has to comply with. Among the demands being made in the 13-point list, the Saudi-led Arab bloc wants Qatar to shut down Al Jazeera. They also want the country to drastically reduce ties with Iran. They have also demanded that Qatar cut its alleged ties to al-Qaeda, Muslim Brotherhood and other Islamic militant groups.

Qatar, for its part, has cried foul since the nations say that these demands are not negotiable. Kuwait is mediating the crisis but both parties seem unwilling to relent. The United States has also urged along with a number of other nations for a swift resolution for the impasse. Qatar's National Human Rights Commission (NHRC) has announced its intention of hiring Swiss lawyers to seek compensation for those affected by this blockade. The commission will take action against Saudi Arabia, the United Arab Emirates (UAE) and Bahrain, which it notes has wrought the most damage.

Qatar has suffered especially economically since the boycott has begun. It’s stock index has sunk 3.1%. Reports have emerged that in addition, at least six British banks have either completely or partially stopped dealing with Qatari riyals. The banks include, RBS, Lloyds Banking Group, Barclays, and Tesco Bank. Individuals will not be able to able to buy or sell riyals.

Assessment

Our assessment is that the longer the impasse continues between Doha and the other countries, the more the region becomes unstable. Having Qatar pinned to the wall is not a good way to resolve the conflict. As a sovereign state, they too will not want to lose their face. It is highly unlikely that Qatar will yield to all the demands as they have tacit support from the Russians, Turks and the Iranians. We believe that the US will persuade the Saudis to adopt a more benign position else it would give both the Iranians and the Russians, a greater surface area to operate in the Middle East.