International businesses caught in Qatar crossfire
DUBAI/DOHA: International businesses are being caught in the crossfire of Qatar’s dispute with its Arab neighbours as it delays shipments, lengthens travel times and prompts contingency plans in case the crisis deepens.
The feud between Arab powers threatens to undermine the region’s progress in positioning itself as business friendly and raises concerns that some firms may be forced to pick sides.
Saudi Arabia, the United Arab Emirates, Bahrain and Egypt cut diplomatic ties with Qatar on June 5 and imposed economic sanctions, accusing it of funding terrorism, a claim Qatar rejects.
Many multinational businesses, from builders to law firms and banks, have a base in Dubai from where they serve the region, including Qatar.
“Qatar is a valuable market for us and we want to continue here but it has become difficult and if there’s no improvement we will have to review our strategy (in Qatar),” said a commercial manager at a European construction services company with a regional head office in UAE.
The company may be forced to stop bidding for new contracts in Qatar or wind down its operations altogether if sanctions intensify, the manager, who declined to be named because of the sensitivity of the matter, said.
Global banks are also in a bind. Some have joined lenders from the UAE, Saudi Arabia and Bahrain in curtailing new business in Qatar, while others including a few large Asian, European and U.S. banks are still providing financing.
Many of the big international banks have strong relations with both Qatar and Saudi Arabia.
HSBC, JPMorgan and Deutsche Bank were involved in sovereign bond issues by both Qatar and Saudi Arabia last year.
Qatar is a valuable market for us and we want to continue here but it has become difficult and if there’s no improvement we will have to review our strategy (in Qatar). Commercial manager