As the first anniversary of the trade embargo placed on Qatar by a quartet of its neighbours rapidly approaches, there is little sign of their antagonism towards Doha easing up. Yet the country has, by common consent, coped remarkably well with life as a virtual regional outcast.
Indeed, in some ways there is now more pressure on the four countries on the other side of the dispute – Bahrain, Egypt, Saudi Arabia and the UAE – to justify their policy of trying to freeze out Qatar or otherwise back down.
The embargo was launched in early June last year, with the quartet cutting all economic and diplomatic ties with Doha amid claims and counter-claims of state-sponsored hacking, the promotion of fake news and support for terrorism.
There were some issues which Doha had to come to terms with straight away. It’s national airline, Qatar Airways, found that the 18 air corridors it had been using had been cut to just two overnight, as it was blocked from flying through Bahraini, Saudi or Emirati airspace. Today the national flag-carrier still has to take long routes around these zones, which adds to flight times and costs and has pushed it into a “substantial” loss for the year.
But other areas of the economy have performed better. As the IMF noted in a review of the Qatari economy in March, new trade routes were quickly established – with Oman, Turkey and Iran among others – and the banking system also adjusted, in part through a rise in government deposits.
A general view taken on September 24, 2017 shows boats moored in front of the skyline of the Qatari capital, Doha. (Photo: KARIM JAAFAR/AFP/Getty Images)
Indeed, the dispute has pushed the Qatari authorities to make useful reforms they might otherwise have shied away from, for example relaxing visa entry rules to encourage more visitors and diversifying their range of trading partners. “The diplomatic rift has acted as a catalyst for enhancing domestic food production and reducing reliance on a small group of countries,” said the IMF in March.
Other observers also say the country has coped well with what could have been a debilitating crisis. “We have seen the resilience of the Qatari economy,” says Alastair Wilson, managing director for global sovereign ratings at Moody’s Investors Service, a credit ratings agency. “At least from what we’ve seen so far, the impact is nowhere near as severe on the Qatar economy as we might have thought.”
Doha has also arguably played a cannier diplomatic gamethan its opponents. US President Donald Trump initially offered vocal support for the position of the Saudi-led quartet, but in subsequent months the US adopted a stance that looks far more sympathetic to Qatar, which is home to a huge US military base. As the dispute has dragged on Washington’s patience has worn thin and it has taken to calling on Riyadh to find a way out of the dispute.
Beyond the agile response of the Qatari government, there have been a number of reasons why the effect of the embargo has not been as great as it might have been. For a start, the rest of the Gulf Cooperation Council (GCC) – the bloc of six Gulf monarchies that includes both Qatar and Saudi Arabia – has been far from united. While Bahrain, Saudi Arabia and the UAE have imposed their trade embargo, two other members of the club – Oman and Kuwait – have stayed resolutely above the fray and continue to talk to and trade with all sides.
n addition, the three GCC countries at the forefront of the dispute have also not been as tough as they might first appear, at least in areas where it suits them. Natural gas continues to flow through the Dolphin pipeline from Qatar to the UAE and on to Oman, supplying much-needed fuel to these countries. The UAE and Qatar have also continued to cooperate on their shared Bunduq offshore oil field – in March a concession agreement on the field was renewed with a Japanese consortium.
Mediation going nowhere
Meanwhile, efforts to resolve the dispute continue, led within the region by Kuwait. In recent days, Emir Sheikh Sabah Al Ahmed Al Jaber Al Sabah has sent envoys to all the other GCC capitals, but there has been no sign the diplomatic push is having any effect.
Kuwait’s long-serving ambassador to the UK, Khaled al Duwaisan, acknowledged the lack of progress when speaking at the annual Oxford Gulf and Arabian Peninsula Studies (OxGAPS) Forum at Oxford University on May 12. “Our mediation has not been easy,” he told the event. “There are few signs that either the Saudis or Qataris are ready to acknowledge the strength of each other’s arguments. Indeed, the media campaign between the two sides seems to have got worse and this is a problem for all of us.”
Despite this, Kuwait seems intent on continuing to try and bring an end to what Al Duwaisan labelled a “pointless confrontation”.
Kuwait “believes the issues can and should be settled by negotiations,” he told the gathering in Oxford. “We shall continue to work quietly but doggedly behind the scenes to allow the face-saving compromise that will we hope restore more normal relations between Qatar and its neighbours.”
Washington also continues to push for a resolution. Recently-installed secretary of state Mike Pompeo had a phone call with Qatar’s foreign minister Sheikh Mohammed bin Abdulrahman Al Thani on May 16, in which he emphasised Trump’s “desire to see the Gulf dispute eased and eventually resolved, as it benefits Iran,” according to State Department spokesperson Heather Nauert.
U.S. concerns
The latter issue is an important element, given that the US is trying to increase pressure on Tehran. Earlier this month, Trump announced he was pulling the US out of the Iran nuclear deal and reimposing sanctions on Tehran. The response among US allies in the Middle East was distinctly mixed. While Saudi Arabia, the UAE and Bahrain supported the decision, others have been more critical, including Iraq which said it “regrets” Trump’s move. Qatar has also opposed the US government’s new stance, which makes life more difficult for it, given its burgeoning economic links with Iranand the two countries’ shared ownership of a large offshore gas field.
The ability of the US to rally support to its policy on Iran is not helped by the decision to move its embassy in Israel to Jerusalem – a move which has been met with condemnation across the rest of the Middle East. The frequent changes of senior officials in the US administration and the failure to appoint ambassadors to many Gulf capitals is not helping matters either – there are currently nine vacancies among US ambassadors to the Middle East, including the posts in Egypt, Jordan, Qatar, Saudi Arabia and the UAE.
While the latest wave of diplomatic turmoil in the region is in large part a result of decisions made in Washington, the US would find the region slightly easier to deal with if the Qatar dispute was solved.
However, given the relative comfort with which it has coped with the embargo to date, there is little incentive for Qatar to make any significant concessions to its opponents. Those on the other side of the dispute also show little sign of being willing to step back – Saudi foreign minister Adel al Jubeir has in the past referred to the Qatar dispute as “very small”compared to other challenges in the region, suggesting Riyadh is content to let it simmer away.
Given all that, it is likely to take much greater outside pressure to force both sides to the negotiating table. The most obvious candidate to exert that pressure is the US, helped on the ground in the region by Kuwait. If that doesn’t happen and no solution to the dispute is found, there is still the chance that it might escalate into something more serious. Both sides have accused the other of harassing civilian aviation and the rivalry has also extended into East Africa, where governments are being drawn into the rivalry.
Dominic Dudley is a freelance journalist with almost two decades’ experience in reporting on business, economic and political stories in the Middle East, Africa, Asia and Europe.
