US-GCC sanctions: One year on, how Qatar is weathering the crisis

While the blockade imposed by the GCC is geo-political, efforts by the members in calling for a wider global support, including the UN, is far-fetched.

 |  4-minute read |   27-01-2018
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Last year, the powerful Arab quartet of Saudi Arabia, United Arab Emirates, Bahrain and Egypt abruptly announced a diplomatic and economic blockade against another regional pseudo-ally – the state of Qatar. The four countries led the Gulf Cooperation Council (GCC) in accusing Qatar of supporting and funding terrorism and manipulating internal affairs of its neighbouring states.

Widely regarded as the most-advanced Arab state for human development by the UN, 85 per cent of the country’s population comprises expatriates, set against just 313,000 Qatari citizens in a population of 2.6 million. Qatar is also a high-income economy, with the world’s third-largest natural-gas reserves and oil reserves.

Qatar, which was abruptly shunned by its immediate neighbours, and had little or no indication of the crisis that began as an extension of the Qatar-Saudi proxy conflict. The involvement of the other regional GCC nations, including Bahrain, Egypt and UAE in the blockade further complicated the position to negotiate, as the quartet had a unified and unwavering stance in dedicating the terms for appeasement.

qatarbd_060517091920_012618080025.jpgAn aerial view of Doha's diplomatic area.

The countries cited Qatar's alleged support for terrorism as the main reason for their action, insisting that Qatar has violated a 2014 agreement with the members of the GCC. The GCC also felt threatened by the media arm of Qatar - Al Jazeera - for engaging in what they termed as a "media conspiracy" against the nations, and also for the country’s proximity with Iran.

Now entering its eight month, the blockade by the GCC nations effectively amounts to economic sanctions on Qatar, which has rendered airspace, travel, trade and diplomatic restrictions. The effect of these sanctions has been widespread, crippling several companies operating out of the country, and including its citizens and expatriates. The abrupt notice and enforcement of the sanctions had also meant the country was put in a limbo, freezing several of its regional assets and disrupting everyday operations.  

As a small gas-rich nation, Qatar has been balancing its trade with heavy dependence on its oil and gas exports for subsidising its food and industrial imports. With its land border with Saudi Arabia closed, Qatar’s food imports initially dropped substantially, before recovering via expensive alternatives.

While the allegations against Qatar’s supposed terror-funding has been the prime focal point, in reality, it is also an extension of the regional differences, especially manifested after the network’s coverage since the 2011 Arab Spring. Al Jazeera, the state-funded broadcaster in Doha, was one of the significant nerve-points in the diplomatic blockade, as the GCC members have over the past continued to express distrust over the network’s coverage of the Arab Spring and for “negatively portraying” the local governments.

In fact, the complete shutdown of Al Jazeera was one of the terms put forward jointly by Saudi Arabia, United Arab Emirates, Bahrain and Egypt to even commence negotiations.

Legal ramifications

The direct losses incurred by Qatar, along with the indirect losses, would amount to several billion dollars, and the country is already exploring legal avenues to claim compensation from the GCC countries. Several senior ministers have also indicated that Qatar has contracted a specialised legal team to study the actions taken by the blockading countries against it. The country has also been clear in its position on backing Al Jazeera, effectively ruling out any calls for its shutdown. 

While the blockade imposed by the GCC is geo-political, efforts by the members in calling for a wider global support, including from the UN is far-fetched. The issue was momentarily complicated when US President Donald Trump took credit for the Saudi-led actions (which was initiated shortly after his visit to the region), but nevertheless it did not gain any traction as international consensus, including from the European Union and the United Nations, among other nations, had called for the resolution of the diplomatic crisis through dialogue.

The gas-rich nation has virtually been cornered over its movements - both financially (for its current instruments/investments in the GCC countries) and physically, having to re-rout its land and sea movements via Iran.    

Surprisingly, despite all the extreme measures by the GCC quartet to arm-wrestle Qatar, countries, including the UAE and Oman, continue to depend on Qatar’s gas pipeline to power their infrastructure. Qatar continues to pump around two billion cubic feet of gas per day to the UAE, showing no signs of impact from the sanctions.

Also read: It'll pay for India to keep ties strong with Qatar amid Gulf crisis


Kartik Mittal Kartik Mittal

The author is a senior solicitor at Zaiwalla & Co, a niche London law firm specialising in international commercial arbitration and litigation.

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