o8 June 2017
Meltdown in Qatar
Why this matters for the UK
by R.D.Shackleton
It’s no coincidence that the diplomatic crisis isolating Qatar from its neighbours in the Gulf should have escalated so markedly after Donald Trump’s visit to Saudi Arabia. The House of Saud, along with Bahrain and the United Arab Emirates, has long been concerned about Qatar’s cosy relationship with Iran; and, in particular, it’s support for the Muslim Brotherhood, a Sunni international organisation best known for sponsoring the political party in Egypt after the January Revolution in 2011. It’s a controversial and fragmented body which claims to support democratic principles and has a demonstrable track record in charity work. Yet sections remain associated with extremism and it is considered a terrorist organisation by a number of countries – including Bahrain and the UAE.
The shifting complexities of Middle East politics posed no challenges for Mr Trump of course. And despite Qatar being one of the US’s closes allies – hosting its main airbase for Middle East sorties in a vast desert strip outside Doha – he has single-handedly exacerbated the situation with a series of tweets asserting that the country gives safe harbour to terrorism. With Egypt and half a dozen other countries now joining Qatar’s main Gulf neighbours in a trade embargo, the crisis is rapidly gathering momentum.
For its part, Qatar, predictably, denies any suggestion that it is soft on terrorism, counter-claiming that statements purporting to attack the US had resulted from the hacking of its national news-agency. It is striking, though, that the government has not issued, at the time of writing, any categoric denial of a story in The Times that it paid a $1 billion dollar to agencies allegedly connected with al-Qaeda as ransom to kidnappers of members of the country’s royal family.
Hard facts in this murky affair are not going to be established anytime soon. But for the UK, the immediate considerations are two-fold. Firstly, how should it play its diplomatic hand with an important Gulf ally and a country which is one of its most strategically important trading partners. And secondly, what are the economic implications of any Qatar melt-down on energy supply deals and its huge inward investments into the UK?
Much depends here on whether Mr Trump follows through with economic sanctions against Qatar. This is by no means a given, but it would put immediate pressure on the UK to choose sides in this dispute. If it can be shown that there is new hard evidence that Qatar is a sovereign agent of international terrorism then obviously immediate action would be taken.
Qatar’s support for the Muslim Brotherhood is admittedly problematical. This transnational Sunni Islamist organisation may claim to support political pluralism and does boast a track record of philanthropy. It can be considered more of a movement than a political party. Nevertheless factions of the Brotherhood are associated with terrorism.
Yet there is nothing to link Qatar’s support directly with terrorist initiatives. Its support for the Brotherhood/Hamas is nothing new. It is a matter of public record. Hamas, for example, has conducted its affairs with its own embassy in Doha for several years. Is it not preferable to retain Qatar as a moderating influence in its dealings with the Brotherhood than sever links and forfeit any control on Qatar’s political and financial support of this potent movement in the Muslim world?
Similarly, stories about Qatari money allegedly finding its way to terrorist sponsored groups in the Syrian conflict are widely known and reported although nothing has been proven. As for Iran, surely it should be up to Qatar as a sovereign nation to decide its own trading partnerships with its near neighbours.
Until proven otherwise, if Qatar insists that it is aligned with the West against terrorism we should take the country at its word. However you dress it up, trading relationships with countries such as Qatar necessarily involve some compromise on Western values. In the case of Qatar, the economic and strategic political benefits hold sway. Unless more proven evidence emerges, therefore the UK, for the moment, should stick with its ally. Like it or not, we are becoming economically joined at the hip with Qatar which is one of the UK’s biggest inward investors and on which we are reliant for as much as one third of our natural gas.
Whether Qatar can sustain its economy in the face of any protracted trade embargo is, of course, an entirely different matter. Doha, the only city of any size in Qatar, you must remember, is a parallel universe where poverty has been abolished and where the 300,000 nationals, who enjoy the highest per capita income on the planet, are not troubled by the economic necessity of holding down a job. That’s a stark contrast to the living conditions of so many of the 2.3 million expatriates, many of whom toil to support families in the sub-Continent, Bangladesh and the Phillipines, without whom this gilded and unimaginably unequal society would be unable to exist.
The Qatari government has been highly effective at weeding out any inconvenient truths uncovered by the international press concerning the tiny but hugely wealthy and ambitious Gulf state. Allegations about, for example, the circumstances under which Qatar managed to win the right to hold FIFA 2022 were largely airbrushed out of its vibrant English language press – which is in any event largely owned by highly placed local families. Al-Jazeera, Qatar’s global TV and news agency, (still regarded by some on the left as a trustworthy alternative voice of the emerging world) provided fearless reporting of the Arab Spring, for example, but shies away from ever challenging its paymaster, the Qatari government, and certainly never rakes over any awkward domestic affairs.
What the al-Thani cheer-leaders haven’t been able to censor, however, has been the domestic consequences of this week’s precipitous falls on the Qatar Exchange and the almost unimaginable – for Qataris – concept of panic shopping and food shortages in the Doha malls. If the situation deteriorates, Qatar risks the flight of expatriate workers and pressures for regime change which threaten to further destabilise the country.
How likely is expatriate flight? Earlier this week the Philippines government took the extraordinary step of banning its nationals from travelling to jobs in Qatar because of fears of the deteriorating political situation. If this develops into an evacuation of its estimated 200,000 passport holders, who are largely employed in households, hotels and building work, it would have a profound impact on Qatar’s economy.
If the crisis persists, it is likely to increase pressure for regime change. Qatar, of course, has form here, with the current Emir, Tamil bin Hamad al-Thani taking over control in a “bloodless coup” from his father who had ascended to power in a similar way. And any change risks upheavals and policy changes which will not necessarily be to the advantage of Western interests.
For the moment, at least, there are no immediate signs that Britain’s most strategically important relationship with Qatar concerning the supply of LNG amounting to 30per cent of the UK’s gas demand is in question. Nor should there be concerns about the £40bn worth of assets built up in the UK by Qatar Investment Authority, the country’s sovereign wealth fund. These include stakes in Sainsburys, the London Stock Exchange Group, Barclays, Harrods, the Shard and chunks of Canary Wharf.
Maybe, though, we shouldn’t put too much reliance on the further £5billion the Qatari’s promised in March to invest in UK infrastructure. This weeks credit rating downgrade on Qatar’s economy by Standard & Poors comes as a reality check.
Qatar, for all its wealth and ambition, has been roughly brought to heel by its larger neighbours. Given the scale of its interventions in regional politics, many will argue that this lesson was long overdue.
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