The Naughty Corner

The Middle East has had one of the most active and delicate weeks in years. The ongoing Syrian Civil War has reached a death toll of half a million people, and ISIS has killed almost 700 people this year alone – yet the tiny peninsula of Qatar is attracting the largest number of front pages given the number of international interests at stake.

This is nothing new – in fact, I wrote (warned?) about it more than three years ago:

“The GCC family is quite wealthy so conflicts are rare at home; however there are some relatives across the Middle East (e.g. Libya, Syria, Egypt, Iran) that are a bit noisy and tend to have frequent fights. So what would happen if the youngest kid, Qatar, challenges his family by taking sides where it should not? The peace at home would most likely end.”

It all started in June 2013, with the abdication of Hamad Al Thani to the throne in favour of his son Tamim. It is said that Hamad started the relationships with the Muslim Brotherhood, Hamas and Iran, as well as the funding of rebel movements – however, it was not until Tamim took power that the GCC started pressuring Qatar to break ties with the MB, among others. Not only have they not, but there were two additional triggering events: the $1bn ransom paid to Iran and an al-Qa’ida affiliate for the release of members of its royal family who were kidnapped on a falconry trip to Iraq, and the blessing of Trump, who visited Saudi Arabia three weeks ago.

So last Monday, Saudi decided that enough was enough, and finally put Qatar in the naughty corner – and if Saudi does that, the UAE, Bahrain and Egypt had to follow. Other six countries have since then cut off or reduced diplomatic ties with the House of Thani. This is nothing too unexpected but it presents significant immediate problems. The number of Qataris living abroad, especially in the aforementioned countries, is not large – but there are c.200k Egyptians living in the Emirate, who work in the finances and the HR of all major corporations.

Not only that – Qatar is a tiny peninsula with a very adverse climate where vegetables don’t grow, and a blockade by air, sea and land can damage them a lot. Supermarkets have replaced Saudi milk for Turkish milk (the only supporting country so far), but chicken shelves are starting to get empty. The closure of Saudi’s air space also represents huge challenges and additional costs for Qatar’s flagship airline, and even short flights can become a pain. Lastly, the UAE is threatening with up to 15 years of jail time to anybody showing sympathy to Qatar – which I won’t here. After all, I’ve lived in both the UAE and Qatar and I must remain impartial.

"Supermarkets have replaced Saudi milk for Turkish milk, but chicken shelves are starting to get empty."

Finance-wise, think of Qatar not as a country, but as a corporation – Qatar Inc. with a single source of revenue, 90% of the payroll comprised of foreign workers and a CEO representing the founding family. Everything in the company is interconnected and goes in the same direction as dictated by the CEO. A good example is AJE, a media empire that grew to compete with CNN or NBC, but it is again showing a clear bias in their news. Or QR, which keeps receiving subsidies to remain competitive. In this context, the national funds may also be affected, although the portfolio of investments they manage is primarily international.

"Think of Qatar not as a country, but as a corporation – Qatar Inc. with a single source of revenue, 90% of the payroll comprised of foreign workers and a CEO representing the founding family."

In just a week, the siege has become a very entertaining one to watch. There is a continuous dance of Emirs and Ministers visiting neighboring countries and a fierce battle on social media and press. Every day counts, and as much wealth and as many powerful allies as Qatar may have, it must act quickly in order to make sure its reigning position and welfare remain intact.  

?This article forms part of the personal blog Global Islander. Opinions expressed here are of the author and are not intended to malign or defame any individual or organization. The writer bears full and sole responsibility for any views, errors and omissions, which he would be grateful to be informed about.