QATAR BEATS SAUDI BLOCKADE
Country maintains healthy growth although some sectors still feeling effects from crisis
QATAR has weathered the economic impacts of a stifling Saudi-led blockade, maintaining healthy growth, but some sectors continue to pay the price a year after the crisis erupted.
On June 5, last year, Saudi Arabia, the United Arab Emirates and Bahrain — all partners of Qatar in the Gulf Cooperation Council (GCC) — along with Egypt, severed ties with Qatar.
Accusing Doha of supporting radical Islamist groups, they imposed a land, sea and air blockade.
Gas-rich Qatar tapped into its massive wealth to absorb the early shocks to its financial system, and secure alternative food supplies, maritime routes and ports, said reports.
The blockading nations, already under economic hardship from low oil prices, have also suffered losses from the ongoing standoff, analysts argue.
Economic integration programmes among the six-nation GCC, which were progressing at a snail’s pace, have suffered the most and the future of the regional alliance has been thrown into doubt.
“The latest data from Qatar reiterate that the worst of the hit to the economy from its diplomatic crisis with Saudi Arabia and its allies has now passed,” said Capital Economics in a report last month.
Doha injected tens of billions of dollars to offset a drop in banking deposits at the start of the crisis and succeeded in bringing the banking sector back to normal operations.
“Growth performance remains resilient. The direct economic and financial impact of the diplomatic rift between Qatar and some countries in the region has been manageable,” said the International Monetary Fund.
Despite the drop in oil revenues, Qatar achieved a growth rate of 2.1 per cent last year, almost unchanged from the previous year, and is forecast to rise to 2.6 per cent this year, according to the IMF.
“Qatar’s economy has suffered on several fronts as new logistics links proved to be more expensive in the short term,” said Andreas Krieg, a professor at King’s College London.
Economic diversification has made a huge leap, such as the opening of Hamad Port to bypass Jebel Ali in Dubai.
The multi-billion-dollar mega projects connected to the 2022 football World Cup have continued unabated, said Krieg.