Qatar’s defiance will spur tough acts
dubai — Qatar is showing no signs that it is about to accept the demands of the four Arab countries lined up against it.
That puts the quartet of Saudi Arabia, the United Arab Emirates, Egypt and Bahrain in a tough spot.
By refusing to give in to the Arab states’ ultimatum, Qatar is forcing them to prove how much leverage they actually have over their wayward neighbour — which could spur them to impose more sanctions.
To really hit Qatar where it hurts would involve measures like forcing Gulf banks to pull their deposits out of the country or disrupting shipments of its economic lifeblood, natural gas.
Qatar did not make public its response to the demands. But on Wednesday, envoys from the Arab quartet ended a meeting in Cairo with a pledge of stepped up measures to counter what they said was Doha’s “negative” reply to their 13-point list.
Egyptian Foreign Minister Sameh Shukri said Qatar was failing to appreciate “the gravity of the situation”.
Anwar Gargash, the UAE Minister of State for Foreign Affairs, tweeted that Qatar faces “greater isolation, incremental measures” and “reputational damage” if it doesn’t give in.
Initial runs on supermarkets in the country soon gave way to relative normalcy as authorities quickly found new ways to import food and other necessities. Turkey has helped plug some gaps, as has Iran.
Government largesse helps too. Qatari Foreign Minister Mohammed bin Abdulrahman Al Thani said this week that the state is covering a ten-fold increase in shipping costs for food and medicine.
Even before Wednesday’s meeting in Cairo, credit rating agency Moody’s cut its credit outlook on Qatar to negative.
The Arab states could put in place more formal sanctions.
Companies that do business with Qatar could be barred from working in the four Arab states. That is no idle threat since Saudi Arabia and the UAE are the region’s two biggest economies, and Egypt is its most populous market. Forcing Gulf banks to pull their deposits out of Qatar or cut ties with Qatari counterparts could have an even more dramatic effect. That would undermine investor confidence in the Qatari banking system and put pressure on Qatar’s dollar-pegged currency.
“Despite efforts to absorb the first shock, the impact of potential additional measures against the Qatari economy would be significant,” Eurasia Group analysts Ayham Kamel and Hani Sabra recently warned.
Carrying an even bigger economic punch would be disrupting shipments of its vital export, natural gas. Doing that would require preventing the hulking tanker ships that carry a super-cooled form of the fuel from reaching markets in Asia and elsewhere.
A more likely scenario could see Qatar frozen out of the GCC. —