Qatar Learns to Cope With Isolation as Saudi Deadline Looms

EghtesadOnline: Shock in Qatar over an unprecedented Arab boycott is giving way to daily acts of defiance.

News ID: ۷۴۲۵۱۰

04 July 2017

As a July 5 deadline to meet a 13-point list of tough demands looms, government maneuvering that’s kept food in markets, tourists in hotels and the national carrier in the air is paying off. Along the seafront in the capital, Doha, it’s not uncommon to see Qataris parading their children in military uniforms. And there’s no escaping the image of the nation’s ruler, Sheikh Tamim bin Hamad Al Thani, who’s been elevated to hero status by locals and foreigners alike.

Hoarding has subsided since stunned shoppers emptied supermarket shelves a month ago upon learning that Saudi Arabia and its allies had cut diplomatic ties and transport links with Qatar. Turkey and Iran have stepped in to provide support, and stores were stacked with Peruvian pomegranates, Dutch grapefruit and Turkish milk, Bloomberg reported.

“We haven’t suffered from the siege,” said Ibrahim Abdelhamid, an Egyptian lawyer who was shopping with his family on Saturday. “Prices are stable. I miss Almarai juice but I will survive,” he joked, referring to a once-ubiquitous Saudi brand.

Closing Ranks

If anything, the rupture over the desert peninsula’s alleged funding of terrorism and cozy ties with Iran has encouraged its citizens -- and even expatriates who account for 90 percent of Qatar’s 2.7 million people -- to rally around the flag.

Residents have plastered a sketch of the emir on skyscrapers, at major intersections, and on cars, social media accounts and even candy boxes. “Tamim the Glory,” stickers proclaim of the 37-year-old ruler, who hasn’t uttered a single public word on the feud.

“Everyone I know trusts our leaders and believes we will be stronger and more self-reliant because of this crisis,” said Omar Al Nabet, a Qatari university student. “It isn’t right for us to be blockaded by our brothers. We must stand up for what’s right.”

Qatar denies the coalition’s charges that it sponsors terrorism, and has said the demands were deliberately framed to be so tough that it would reject them. The bloc -- including the United Arab Emirates, Bahrain and Egypt -- has insisted that Qatar cool ties with Iran, end Turkey’s military presence in the country and shut the Al Jazeera television network, which has riled other autocratic monarchies in the region with unflattering coverage.

On Monday, Qatari Foreign Minister Mohammed bin Abdulrahman Al Thani submitted his country’s reply to the bloc’s demands to Kuwait, which is mediating between the sides. Details haven’t emerged. Saudi Arabia has called the demands non-negotiable.

Make no mistake: It’s not business as usual in the world’s largest exporter of liquefied natural gas, as its officials would have people believe. After the boycotting countries severed air, land and sea links, Turkey stepped in to ship food imports that once came in by land through Saudi Arabia, and Iran also promised assistance. Contractors working on a $200 billion infrastructure upgrade for soccer’s 2022 World Cup had to secure new sources for building supplies and divert materials already en route to ports in Oman and Kuwait, which haven’t taken sides in the conflict.

Qatar Airways, the flagship carrier, has detoured flights by hundreds of miles to avoid the airspace of boycotting countries, and travel executives are dangling promotions.

Luxury Lures

Doha is usually packed in the summer with Saudis drawn to discounted luxury hotels and a social atmosphere more relaxed than their austere kingdom. But last week, during the Islamic holiday celebrating the end of the Ramadan fasting period, visitors came from Kuwait and Oman, the two Gulf Cooperation Council members that didn’t join the boycott.

The Sheraton hotel on Doha’s coastline said discounts and bookings from Oman and Kuwait helped it hit a 91 percent occupancy rate during the holiday. Smaller hotel chains in the capital offered free rooms to visitors from those two countries, and duty-free shops have extended deep discounts.

Finance Minister Ali Shareef Al Emadi said the country has enough financial firepower to defends its currency and economy. But the riyal is under pressure from speculation that the peg can be adjusted, and foreign exchange operators are struggling to meet the demand for dollars.

Dollar Stocks Low

Three dealers, who asked not to be named because they weren’t authorized to speak to the press, said dollar stocks are low. Two imposed a $3,000 limit on transactions on Saturday, and the third didn’t have any dollars. Wire transfers were still possible and trades were conducted at the official exchange rate.

Qatar’s central bank said on Friday the currency is stable and that it would guarantee all foreign exchange transactions, at the pegged rate, inside and outside of the country. Local banks are strong enough to survive the pullout of all Gulf money and then some, S&P Global Ratings said in a report last month.

“Qatar clearly has the sovereign reserves to mitigate the impact on citizen welfare,” but the effects on the economy are “a different matter,” said Hasnain Malik, head of equity research at Exotix Capital in Dubai. “A complete and sustained break in commercial relations would increase inflation in imported consumer and construction products, reduce the traffic through Doha airport and hotels and on Qatar Airways.”

Cut Short?

No amount of defiance or improvisation can paper over the human toll. Families have been split apart and more than 11,000 GCC citizens living in Qatar were told to return to their home countries, according to Qatari officials. Many have complied, notably the prominent Saudi journalist Ali al-Dhufairi, who resigned from Al Jazeera.

At Qatar Foundation’s sprawling Doha compound, which hosts branches of Cornell University’s medical school and Northwestern University’s journalism program, students and faculty from the boycotting states may have to quit studies and research, said Ahmed Elmagarmid, director of the Qatar Computing Research Institute at the Foundation.

Qatar’s National Human Rights Committee has hired Swiss law firm Lalive to pursue damages for students, employees and families affected by the boycott in the region’s courts and any other jurisdiction willing to hear cases.

“Our students and colleagues from those countries are the victims,” Elmagarmid said.

Having shown no indication it will cave in to pressure, the government says it’s ready to confront all scenarios.

“We are here to defend our country,” Qatari Minister of State for Defense Affairs Khalid Al Attiyah, told Sky News on Monday.