Insights into Editorial: Qatar’s isolation
Insights into Editorial: Qatar’s isolation
The recent diplomatic rift between Qatar and other Arab states — like Saudi Arabia, Bahrain, UAE and Egypt — has again highlighted the geopolitical significance of the region beyond the oil factor. It emerged as a result of an allegation that the small gas-rich country supports and funds terror through its support of Iran and Muslim Brotherhood, a Sunni Islamist political group outlawed by both Saudi Arabia and the UAE.
Qatar’s foreign policy has always been rather different than that of the rest of the Gulf States. While Bahrain largely follows Saudi Arabia’s foreign policy, Qatar has diverged from other members of the GCC. After the Arab Spring, Qatar aligned itself with Islamist political parties such as Egypt’s Muslim Brotherhood which has been declared as a terrorist group by Saudi Arabia and United States.
- Qatar’s state funded news network Al Jazeera also seems to support these groups as champions of democracy. Qatar was also amongst the most active backers of Islamist fighters in rebellions in Syria and Libya. This coupled with the fact that Qatar enjoys close ties with Tehran, has bothered the Saudi led bloc.
- Egypt also considers the Brotherhood to be dangerous. During the 2011 Arab Spring, Qatar backed the Brotherhood and the protestors against the then-President Hosni Mubarak.
- Qatar has also been accused of backing Yemen’s Houthi rebels which is a startling claim given that Qatar, until the day before the crisis, was part of the Saudi-led coalition fighting the Houthi rebels, who are allegedly backed by Iran and ex-President Saleh.
How will it affect the rest of the world?
Any kind of instability in the Middle East tends to send up oil prices, and the longer prices stay high, the more likely it is that it will cost more to fill up your tank. So far, oil and gas markets have been taking the crisis in their stride.
- The row has also fanned concerns about the liquefied natural gas (LNG) market. Qatar is the world’s biggest supplier of LNG and Egypt and UAE are key recipients. Although Saudi Arabia, the UAE, Egypt and Bahrain have all closed transport links with Qatar, the state can still ship out both LNG and oil to other countries by sea.
- The diplomatic crisis is also the latest complication for the 2022 World Cup, which Qatar is preparing to host. If the travel restrictions remain in place long term, they could keep supplies, workers and eventually soccer fans from moving freely in and out of the country. The tournament is already facing allegations of worker misconduct, and it had to slash the budget for the soccer tournament by more than 40% because of the falling price of oil.
Impact on India:
As regards the impact of sanctions on India, it depends on Qatar for 90% of its natural gas requirements and hence is likely to maintain its good relationship with the monarchy. A few days after the crisis began, the External Affairs Ministry had made it clear that India didn’t foresee any issues caused to its own relations with countries in the region. However, the Qatar Airways flights between India and Doha will be affected as following the UAE’s decision to not allow its air space to be used, the flights will now have to get routed through Iran.
Why is Qatar important for India?
- While the current volume of Qatari FDI in India is modest, Qatar’s Sovereign Wealth Fund and other state-owned entities, as well as Qatari private investors, are looking at investment options in infrastructure in India, including in real estate, roads and highways, airports amd airlines, ports, LNG, petrochemicals and fertilizers, and tourism/hospitality.
- There is vast potential for Qatar Investment Authority to substantially increase its investments in India, given India’s huge needs — $ 1 trillion in the next 5 years in infra alone — investment friendly policies, and QIA’s keenness to diversify its global portfolio. India has made efforts to actively engage with QIA and other state-owned and private entities in Qatar, highlighting policies such as ‘Make in India’ and the advantages of investing in India.
- India’s corporate sector too is increasingly pursuing business opportunities in Qatar. A number of reputed Indian companies, particularly in construction/infrastructure and IT, have operations in Qatar.
- While business has been the focus of the relationship, India’s ties with Qatar have largely been founded on energy and economic links, and the presence of the Indian community, which in Qatar numbers over half a million and, as in other GCC countries, is the largest expatriate community. The interest of citizens living and working in Qatar, many of them engaged in projects related to the FIFA World Cup in 2022, is paramount for India.
The crisis shows deep rooted and complex divisions in the Middle East which the west often tries to downplay by portraying it as nothing more than tensions between Saudi-led Sunni bloc and Iran led Shiite bloc. There seems to be no easy solution to the crisis in the foreseeable future. The Gulf Cooperation Council (GCC) countries need to negotiate and find a solution, keeping the group’s collective agenda in mind. A diplomatic freeze will only allow non-state actors like the Islamic State (IS) to strengthen their presence. Cooperation between Iran and Sunni Arab countries is also desirable for the benefit of both. Qatar needs to choose between aligning its policies with those of the regional heavyweights or greater isolation. It is not yet strong enough to have its own independent regional doctrine.