Qatar looks confident roughly a year and a half after the sudden economic and diplomatic blockade imposed on the tiny State by the quartet of Saudi Arabia, UAE, Egypt and Bahrain. But the Qataris seem to have weathered the regional storm that threatened their survival in terms of subsistence and security. This is what BR Research gathered on the sidelines of a Pak-Qatar Business Forum in Doha last week.
It used to be a country dependent almost entirely on foods import, mainly from the Saudis down South. But the initial shortages after the blockade were overcome as Turkey and Iran came to Qatar’s rescue in a jiffy.
Over time, an alternate, multimodal supply route has been developed – it courses overland from Turkey to Iran and then reaches across the Persian Gulf to Doha Port via ferries.
Qatar’s transit and tourism revenues fell post-blockade as the quartet banned its airspace to Qatar, prohibited their flights to and from Qatar, and asked their citizens living in Qatar to leave that country. But the rising oil prices helped Qatar’s revenue-book absorb some of the fall, even as prior investments in gas fields and port infrastructure started bearing fruit.
Internally, the political stability didn’t waver. The Qatari royal family, which has its own history of palace coups, rallied behind the 38-year old ruler, Emir Sheikh Tamim bin Hamad Al-Thani. Turkey’s security commitment came in handy, as it helped thwart a rumored invasion from the South.
The popular Emir played his cards well and kept the US neutral in the Gulf standoff, a result of spending millions on lobbying in DC. Now a cabinet reshuffle earlier this month telegraphed the Emir’s grip over the State apparatus. He also made some fresh, younger appointments that are broadly seen as meritocratic.
Pakistan has remained largely neutral in the Saudi-led blockade. Qatar could have construed this neutrality, in the wake of Saudi aggression on its land, as diplomatic acquiescence in Islamabad. But Doha continued to reach out to Pakistan, as it opened up visa-free entry for Pakistanis and committed to hire 100,000 Pakistani workers in the coming years. Just as with Iran, Pakistan found its relations with Qatar difficult to balance, given the decades-long Saudi influence on the country.
Some suggest that Pakistan lost an opportunity by not doing more for Qatar? Would things be any different had Pakistan come out in support of Qatar when it mattered? Well, Qatar was (and is) more loaded than the Saudis; and it was more eager for Pakistan’s security support at the time. Qatar rewarded Turkey handsomely for its security and economic help in August this year during the run on Turkish lira.
The Emir promptly announced financial investments worth $15 billion in the economy of its saviour. Hence, Ankara’s transaction was complete.
As diplomatic and business contacts continue between the two countries, it is hard to escape the sense that while Qatar has survived its regional peril, Pakistan is still stuck in its economic woes amid a confused foreign policy towards the Gulf.
Yes, the Saudi commitment for $6 billion will be instrumental in avoiding a balance-of-payment crisis; but at the end of the day, it is a credit package – not a grant or FDI. Besides, the fear that Saudis might hurt Pakistani remittances if Pakistan ever became independent in its Gulf foreign policy may be a bit overblown, for Pakistan retains a decent security footprint in the Kingdom.
Short of any diplomatic breakthrough, it is hard to see how and why Pakistani companies now hoping to export more to and make JVs in Qatar will find an eager audience in Doha. It really doesn’t send a nice signal when the future of LNG deal is put into doubts at the official level.
The Qatar-Pakistan Business Forum in question had a reasonable level of participation from Pakistani companies (e.g. Fauji Group, Packages, Engro Eximp, as well as several SMEs that do trade in foods and construction materials). Participation from the Qatari business community, however, was remarkably low, to put it very politely.
Some Pakistani businessmen feel that Qatar will be more responsive to Pakistan after the imposition of renewed US sanctions on Iran, which has become a key conduit for supply of food to Qatar from Turkey. But this view is mistaken. Qatar is not nearly as desperate as it was in June last year. Imports can be replenished via the Iraq route if Iran is caught up in the mire again. Besides, Doha is investing to indigenize food production, with materials sourced from a variety of markets.
It appears that Pakistan’s quest for deepening economic partnership in the Gulf will remain dependent on its security cooperation with the feuding Arab states.
It will be a tough balance to master going forward. Qataris are in a position to invest big in Pakistan. But it will demand some give & take here and there, besides recognizing the true potential of Pakistan’s main export to the region: its manpower.