Defense & Security Diplomacy & International Relations Economics Middle East & North Africa

Qatar, Four Years On

In the face of GCC sanctions, Qatar has persevered, and with its perseverance has come ambition, primarily in the form of a fortuitous alliance with Iran.

Unity and ambition enveloped the Gulf as the leaders of the United Arab Emirates, Bahrain, Saudi Arabia, Oman, Qatar, and Kuwait gathered in Abu Dhabi to inaugurate the Gulf Cooperation Council on May 25, 1981. The charter the six states signed was the manifestation of each country’s effort to coordinate, integrate, and interconnect each member state, and to promote economic cooperation in a region exceptionally well-endowed with natural wealth. In 2017, however, the spirit of solidarity was shattered, with member states organizing along a pro- and anti-Qatar cleavage. 

The conflict is the result of Saudi, Emirati, and partially Egyptian accusations respecting Doha’s ties to the Muslim Brotherhood; its state-sponsored news network Al Jazeera; and most recently, its 2017 restoration of diplomatic relations with Iran. Because there is substantial literature that has already explored the macropolitical implications of the feud in the Gulf, in this article, I shall analyze the conflict in a Qatari milieu, beginning with an analysis of the affair’s domestic repercussions, and concluding with a discussion of what the future holds for Qatar vis-à-vis Iran. 

Unassuming Resilience: How Qatar has Coped

Though the GCC imposed a series of demands and economic sanctions to compel Qatar to stop funding terrorist proxies, break ties with Iran, and suspend operations at Al Jazeera, Qatar has emerged relatively unscathed. 

On the economic front, the IMF reported rather optimistically, “‘The Qatari economy and financial markets are adjusting to the shock associated with the June 5 measures imposed following the diplomatic rift with some trading-partner countries.’” The report even acknowledged Doha’s diversification strategy, an attempt to reduce its reliance on the country’s liquefied natural gas (LNG) reserves, and the soundness of its financial sector. Though it would be irresponsible to suggest the Qatari economy has not sustained any damages from the GCC fracas, the state could be faring much, much worse. Among some of Qatar’s most propitious macroeconomic maneuvers have been its recent purchase in the Turkish stock exchange after a $5bn currency swap, the Qatar Investment Authority’s continued diversification in its investment strategy, and a $1bn aid package delivered to Oman, likely designed to buttress its support in the Gulf against Saudi pressure. 

The state has made progress politically as well, and it has managed to do so without jeopardizing its authoritarian rigidity. In November 2020, for example, Qatari emir Sheikh Tamim bin Hamad Al-Thani announced the state would be holding elections for its Shura council: the state’s unicameral legislative body. In a post-Arab Spring Gulf, wherein autocrats have become exceptionally perturbed by the possibility of popular uprisings, a popularly elected Shura council—though superseded by a monarch—keeps Qataris enfranchised and the state strong. Admittedly, a political breakdown was never the intent of GCC sanctions, but such a breakdown precipitated by economic hardship nonetheless does not seem likely.

Paradoxically, while Doha enjoys sustainability—and arguably even profitability—some GCC countries have suffered. The Economist reported, for example, that the housing market in Dubai faltered, losing half a billion dollars’ worth of Qatari-owned property in 2017. Similarly, Emirati private enterprise weakened, in which Qataris held a sizable stake. Though the UAE’s losses have historically been counterpoised by its gains, any stream of revenue not derived from oil rent is invaluable in a state that is still in the fledgling stages of post-hydrocarbon diversification. This is especially true in light of the COVID-19 pandemic.

As Qatar remains afloat sine-GCC support, then, it has shifted its focus from survival to political prosperity using an alliance with Iran as its vehicle, though this relationship requires some closer analysis.

Dead End or Power Play? 

In the face of GCC sanctions, Qatar has persevered, and with its perseverance has come ambition, primarily in the form of a fortuitous alliance with Iran. 

Since the 2017 breakdown, Qatar’s flagship airline has been green-lighted to use Iranian airspace for overflights albeit at a fee, Doha has resumed operations at an LNG plant it shares with Iran, and the state has even condemned the assassination of Iranian nuclear scientist Mohsen Fakhrizadeh. Prima facie, then, it seems the two are off to an auspicious start. However, the alliance is not one born out of political commonality or sectarian identity. It is an alliance of convenience; but, because of the ever-changing political climate in the GCC, the alliance is fragile for one major reason. A revitalized GCC may be on the horizon. 

On December 4 2020, Riyadh expressed its wish to rekindle an alliance with Qatar, leaving the Iranian-Qatari paradigm on edge. Though the Saudis dubbed the initiative a “gift” to then-President-Elect Biden, it was most certainly a Saudi maneuver designed to reinforce the Gulf’s integrity, should President Biden ease his predecessor’s hardline stance on Iran. Indeed, with renewed interest in the JCPOA emanating from the White House, the Gulf becomes increasingly vulnerable to a reinvigorated Iran validated economically and politically by the United States.

As of January 5, this “gift” seems to have come to fruition: the economic blockade was lifted and talks with Qatar have resumed. This is a maneuver the Qataris have no reason to rebuke, it is one they are optimistic about, and it is a significant impediment to Doha’s rapport with its northern neighbor. However, it is a proposition the international community must remain wary of. As Ramani writes for Foreign Policy, continued economic discourse does not translate into political harmony. It is possible—and indeed probable—that this cold conflict transcends the GCC’s domain, as the UAE and Qatar continue to escalate vis-à-vis military presence in Libya and other Middle Eastern countries. While the words exchanged at the January 5 talks seemed promising, the actions of those privy to the agreement illustrate a starkly different picture.

Most importantly, this intra-GCC discourse and the Qatari foreign minister’s optimism paints an unpropitious picture for Iran. Whether Qatar wishes to continue interacting more closely with Iran post-amity is uncertain. What is more certain, however, is that it is unlikely that the Qataris will be permitted to continue such close dealings with Tehran if diplomatic ties with its fellow GCC states are restored completely. If Riyadh’s efforts are fruitful, and if the United Arab Emirates, Bahrain, and Egypt follow suit, it will be back to business as usual in the anti-Iranian Gulf. If the Saudi proposal disintegrates, the Iranian-Qatari alliance may live to see another day. The question then becomes, how severely will Iran be hurt by the GCC, even with a milder consociation in Washington?

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By Mustafa Ahmedani

Mustafa Ahmedani is a third-year Political Science and History student at UCLA concentrating in International Relations. He is a Managing Editor for the Journal on World Affairs and has published work in supranational organizations and campaign finance.

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