THE QATAR-GULF CRISIS AND ITS IMPLICATIONS

BACKGROUND

On 23rd May 2017, the Qatar News Agency reported that the Emir of Qatar Sheikh Tamim bin Hamad al-Thani made a  speech at a graduation ceremony that criticized its neighbors and called for re-establishment of harmonious relations with Iran and Israel.[i] This sparked a series of diplomatic breakdowns between the Gulf Cooperation Council (GCC) countries.

Following the Emir’s controversial comments which reverberated across news channels, Saudi Arabia and some of its allies from GCC completely severed all ties with Qatar, closed air, land and sea routes, cancelled flights, withdrew diplomats, expelled Qatari nationals from their countries, designated 59 Qatari citizens as terrorist supporters and even prohibited the screening of the al-Jazeera TV network.[ii]

The Doha-funded Al-Jazeera news channel is one of Qatar’s most significant assets, whose influence is resented by other governments. Four Arab countries blocked Qatar-based media.[iii]Even other countries such as Jordan scaled back their ties with Qatar and closed down the Al Jazeera office in Amman.[iv]

WHAT LED TO THE CRISIS?

Apart from the inflammatory remarks that were allegedly made by the Emir of Qatar, Doha reportedly paid a ransom amount to Iran-backed extremist groups[v], which did not sit well with the Gulf nations[vi].

Saudi Arabia expressed that it took the drastic decision because of Qatar’s “embrace of various terrorist and sectarian groups aimed at destabilising the region”.[vii]Saudi Arabia’s decision also stems from the growing closeness of Qatar with Saudi Arabia’s arch nemesis- Iran.

However, the rift can be attributed to deeper underlying differences regarding the future of the Gulf, issues of regional leadership, political Islam and approach towards Iran.

Qatar’s military capability is one of the smallest in the region. Its defence budget of US $1.9billion is only 3.4% of Saudi Arabia’s US $56.7 billion.[viii]Qatar has less personnel, tanks and fixed wing aircrafts than any other Gulf country including Bahrain and Oman.

The Chart above shows where Qatar stands vis-à-vis its neighbors if it does come to a military conflict. Qatar has 12000 active frontline personnel as compared to Bahrain’s 15000 personnel, which is the smallest Gulf nation. Qatar has 92 tanks while Oman has 117 tanks and Egypt has 4110. Qatar also has the least number of aircrafts and stands at 15, as compared to Bahrain’s 25.

RECENT EVENTS

The World Trade Organization confirmed on 4^th August that Qatar has filed complaints against the three of the Gulf nationsfor imposing a blockade on Qatar.[x] Qatar stated that the economic boycott was a "coercive attempts at economic isolation."[xi]

Following the economic blockade, the Doha-funded news agency Al Jazeera has been shut down by Arab states in their countries.[xii]Israel also plans to remove Al Jazeera from Jerusalem on the premise that the broadcasting network was a tool for ISIS.[xiii]

Perhaps the most important development that could change the politics of the Gulf is that the Turkish forces recently ended a joint military exercise with Qatar in Doha.[xiv] The exercise known as ‘Iron Sheild’,has important implications with the possibility of Qatar and Turkey aligning with Iran on one side and GCC nations on the other.

Turkey and Iran have made their food supplies available in Qatar to minimize the effect of the boycott on Doha, and Turkey is even considering enhancing its military presence as a sign of solidarity[xv].

The impact of a Qatari alignment with Iran and Turkey could have negative and far reaching implications for the conflict in Syria and Libya, the influence of Iran in the Arab world, US military operations in the region, the price of oil, and the overall security of the Middle East.[xvi]

US RESPONSE

A series of tweets by POTUS Donald Trump siding with the Saudi led bloc against Qatar further complicated the issue. Analysts also wonder if President Trump got played by Saudi Arabia to overlook the contribution that Saudi Arabia has made in supporting extremism.[xvii]

In contrast to POTUS, the State Department and the Pentagon are trying to play a more neutral role, as Qatar is host to the largest American air base in the Middle East from where they can launch operations on ISIS strongholds. The al-Udeid base near Doha is crucial for US air operations in Syria, Yemen, Iraq and Afghanistan. The gratitude is mutual- were it not for the large US military presence in the country, Qatar would have been much more vulnerable to a Saudi-led military intervention. Hence Qatar has good reasons to be thankful to the US.

IMPLICATIONS

With any kind of instability in the Middle East,oil prices tend to go up. Qatar is one of OPEC’s smallest oil producers. The OPEC, with the aim of bolstering oil prices, had agreed to cut oil production. Investors are now concerned that the dispute with Qatar could affect that deal.

Qatar is also the world's biggest Liquefied Natural Gas (LNG) exporter with Egypt and UAE being its key recipients. Something to keep an eye out for is that Qatar has pipelines in the Gulf and could retaliate against the sanctions by cutting off supplies to its neighbours.

Qatari truck companies have also found their businesses of import-export effectively stopped upon the closure of the land border with Saudi Arabia. Moreover, the Qatar stock exchange also fell by 8% and is facing fears of vital food imports after closing of the main land route into the nation.

On the upside though, the embargo has boosted local industries of Qatar. Local businessmen say it has created new opportunities for the country.[xviii]

The larger implications for the global economy are that the Qatar Investment Authority (QIA) holds large stakes in big western companies such as Volkswagen and Barclays. Secondly, Qatar has invested petrobillions in trophy assets such as the Shard, which is London’s tallest building, and Harrods department store, and several other assets around the world. Thirdly, the Qataris are due to host the international football World Cup in 2022.Notwithstanding, the sanctions may affect its ability to pull off the world’s biggest football tournament.

CONCLUSION

There are different scenarios that might play out in the coming days. It goes without saying that the blockading nations hope that Qatar recognizes the seriousness of the boycott and quickly concedes to their demands. These demands include closing down al-Jazeera, scale back cooperation with Iran, ousting the leaders of Muslim Brotherhood and Hamas, and express commitments not to support extremist groups.[xix]

However, it is unlikely that Qatar will concede to these demands quickly and unreservedly. For a population of only 3 lakh citizens, Qatar's sovereign wealth is over $340 billion which goes on to say that the country is unlikely to feel a serious financial pain in the near future[xx].Qatar’s proud leaders have also vowed not to surrender to terms that compromise the independence of its foreign policy.

A more serious possibility of a long-term standoff is that of a more prominent and permanent split of the Sunni camp, in which Turkey and Qatar, move away from traditional allies and closer together to Iran, along with Islamist groups. Therefore, if Saudi Arabia and its allies overplay their hand, they could possibly drive Qatar to unabashedly align itself with Iran and Turkey, and that could lead to a military conflict in the Gulf.

The Gulf dispute, as echoed by Yousef Al Otaiba, UAE Ambassador to the US, is more philosophical than diplomatic.UAE and Saudi Arabia complain that the Qataris have been funding jihadis across the region. To assume that this dispute is solely about terrorism would only be partially true. Saudis themselves have been infamous for promoting the Salafi ideology that underlies jihadi movements.

The verity of the matter is that the Saudis have long been resentful of Qatar’s successful efforts to become an independent actor in the international stage. The news agency Al Jazeera- a testament of their success, has provided a platform for groups detested by the Saudis such as the Muslim Brotherhood. So while the diplomatic crisis may have been triggered by Emir Sheikh Al Thani’s alleged comments, the dispute had already been simmering much before it.

On a more positive note, the Gulf crisis also presents a potential opportunity. If the US and countries in the Arab world can induce Qatar to restrain its support for extremist groups, it could quite possibly help in limiting the reach of extremist ideologies and bringing some stability to the region.