Stifling economic blockade imposed by Saudi Arabia and Egypt on Qatar will continue to remain in place until further notice with neither Saudi Arabia nor Egypt will to “make any concessions” towards Doha, said Saudi-owned Al-Arabiya television channel.
On June 5, 2017, Saudi Arabia, Bahrain, Egypt and the United Arab Emirates, all members of the Gulf Cooperation Council (GCC) along with Qatar, severed ties with Doha and accused it of supporting radical Islamist groups. Since more than a year now, Qatar faces a land, sea and air blockade from the four countries.
Qatar has repeatedly rejected the accusations as baseless.
The announcement that the economic blockade will remain in place was made following a meeting between Saudi Arabia’s Crown Prince Mohammed bin Salman and Egyptian President Abdel Fattah el-Sisi when the latter visited Egypt’s capital Cairo as part of a regional tour.
The Crown Prince is also expected to land in Tunisia where protestors have taken to the streets demanding justice for the brutal killing of Saudi journalist Jamal Khashoggi.
Having imposed their economic blockade against Doha, the quartet issued a list of demands which Qatar had to comply with before the normalization of ties. The list included demands such as expelling Turkish troops from the country, shutting down the Al Jazeera media network, cutting off ties with Iran, and making reparation payments to the states. Doha rejected the demands saying they were attempts to infringe on its sovereignty.
Qatar has managed to absorb the shocks of the blockade to its financial system thanks to its massive wealth stemming from its gas deposits and managed to secure supplies, including essential items such as food, from alternate maritime routes and ports.
According to analysts, the quartet, which imposed the economic blockade, also suffered economic losses due to the standoff. In May 2018, a report by Capital Economics had stated, “The latest data from Qatar reiterate that the worst of the hit to the economy from its diplomatic crisis with Saudi Arabia and its allies has now passed”.
Despite initial hiccups to its supply chain, Qatar has weathered the economic embargo and has injected $40 billion in its banking system to offset a drop in banking deposits; it has also established new trade links with Turkey, an ally, and in doing so has managed to maintain resilience of its economy.
A May 2018 report from the International Monetary Fund states, “Growth performance remains resilient. The direct economic and financial impact of the diplomatic rift between Qatar and some countries in the region has been manageable”.
In reference to the quartet’s economic blockade, Andreas Krieg, professor at King’s College London, opined, “Qatar’s economy has suffered on several fronts as new logistics links proved to be more expensive in the short term. However, Qatar has been able to transform this crisis into an opportunity.”