The alliance, which includes the United Arab Emirates, Bahrain and Egypt, said Tuesday’s agreement between the U.S. and Qatar came about due to years of pressure from the bloc, according to a joint statement carried by the official Saudi Press Agency. They also vowed to maintain the recent measures against Qatar until their demands are met in full, Bloomberg reported.
The memorandum of understanding came as part of U.S. Secretary of State Rex Tillerson’s sweep through the region in pursuit of a negotiated settlement of the feud, now in its second month. It was the most concrete step the U.S. has taken to end the standoff, which started after the four nations severed diplomatic and trade ties with Qatar on June 5. The bloc accuses the Gulf nation of destabilizing the region by supporting proxies of Shiite-dominant Iran and Sunni extremists, charges it denies.
Saudi Meetings
The U.S.’s top diplomat is meeting Saudi Arabia’s King Salman bin Abdulaziz and the kingdom’s crown prince in Jeddah on Wednesday, and is also due to hold talks with the foreign ministers of the four nations boycotting Qatar.
The pact with Qatar will change the nature of those discussions, according to Allison Wood, a Middle East and North Africa analyst with Control Risks in Dubai. “It forces the Saudis to be more explicit about their other grievances against Qatar and how they can constructively address them,” Wood said.
The agreement lays out a series of steps the two countries will take over the coming months and years to interrupt and disable terrorist financing flows, Tillerson said on Tuesday in Doha.
Qatar “has been quite clear in its positions, and I think very reasonable, and we want to talk now how do we take things forward -- that’s my purpose in coming,” he told reporters.
The spat is hurting the economy of Qatar, whose currency, like that of other Gulf nations, is pegged to the U.S. dollar. The longer the dispute goes on, the higher the likelihood Qatar will abandon the peg, according to Commerzbank AG.
“The central bank has to constantly intervene against the depreciation pressure and therefore constantly loses foreign currency reserves,” analyst Lutz Karpowitz said in an emailed note. What’s more, “the economic difficulties of the small country are likely to increase over time,” Karpowitz said.
U.S. Allies
The Gulf crisis has put the U.S. in a difficult spot. It’s allied with nations on both sides of the dispute. Qatar hosts the regional headquarters for the U.S. Central Command, which includes a state-of-the-art air base the Pentagon depends on to target Islamic State. Saudi Arabia has strong counter-terrorism ties with the U.S. and is the top buyer of American weapons.
The Saudi-led bloc has demanded that Qatar scale back ties with Iran, the Shiite Muslim powerhouse that’s the main rival to Saudi Arabia in the region; sever relations with the Muslim Brotherhood; and shut the Al Jazeera media network that’s riled governments throughout the Middle East.
The Qatari foreign minister said last week that Saudi Arabia and its allies see Qatar as “punching above its weight” and want to silence an alternative voice.