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Between a rock and a hard place

Jun 13,2017 - Last updated at Jun 13,2017

Qatar is a rich country by any standard.

Some cynics may say that Qatar is dependent on a single commodity, gas mainly, and some oil, which renders it economically less formidable and more vulnerable.

Regardless of the reservations an analyst may have, Qatar’s per capita income is the highest in the world ($130,000 per year), and the purchasing power of this income is double that figure.

Half of Qatar’s annual earnings (or 47 per cent to be exact) are saved, and its sovereign wealth fund established in 2005 has more than $360 billion in assets.

Since the late 1960s, Qatar boasted an industrial complex of fertilisers, aluminium and iron pellets plants. They all operate efficiently on gas.

Qatar has managed to diversify its economy in construction, shipping, entertainment and media. Doha’s shoreline looks as opulent as any major coastal city in the world.

Its airline and the prospective 2022 World Cup are making Qatar quite an attractive destination.

With Qatar being boycotted by three neighbouring GCC members (Saudi Arabia, Bahrain and UAE), Qatar will be impacted. So far, Qatar has not taken any reciprocal measures.

The boycotting neighbours hope that, by raising the stakes, Qatar will fold its cards and rush to reach a solution. If the other states insist on Qatar to surrender, we may face a long and costly showdown.

The GCC itself will face the danger of breaking asunder.

Kuwait can not take sides while its emir is exerting brave efforts to reconcile the differences between the two rival sides.

Similarly, the Sultanate of Oman will opt to maintain the status quo it has adopted since the eruption of the Arab Spring.

Qatar may initially cancel many flights out of Doha or into it, may go through few days of inadequate food supply and has initially witnessed a high one-digit percentage decline in its capital market index.

Yet all of these are temporary.

Qatar can order food from Turkey, Iran and Jordan. There will be many happy potential suppliers.

The country will eventually ride out of the crisis.

On the other hand, Qatar, can inflict economic pain as well, if the situation escalates to a protracted economic war.

Saudi Arabia, UAE and Bahrain should engage into a constructive dialogue with Qatar.

If the internal dispute assumes a life of its own, it will lead to polarisation and Iran will be a big winner.

Egypt stands to lose most despite the fact that Egypt is after a political win in Qatar, regardless of the cost.

If no one is after a regime change in Qatar, then the only meaningful course of action is dialogue.

No one is small enough to surrender. In Jordan, we incurred a very heavy loss in 1991 and after. Now, we do not need to be forced to choose a camp.

Putting countries between a rock and a hard place is something Jordan is used to, but prefers not to be put in that position.

 

 

The writer is a former Royal Court chief, deputy prime minister and member of Senate. He contributed this article to The Jordan Times.

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