Analysis

Despite Sanctions Qatar Outpaces Saudi Arabia In Economic Growth

Qatar’s Economy Thrives in the Face of the Blockade

An article in the Wall Street Journal overviewed the ways in which Qatar has adjusted and, indeed, thrived in the face of the illegal blockade facing the country. By establishing new trade routes, Qatar has robustly demonstrated that it will not be coerced by economic pressure from the siege nations.

“What happened to us is something that we don’t want to happen to another country… it will be very dangerous for the region if aggressive acts like this become the new norm.” -Sheikh Saif bin Ahmed Al Thani, director of the Qatari Government Communications Office

The article illustrates how the blockade is more likely to backfire the longer it is in place. Qatar has been forced to deepen its trade routes with nations beyond the siege countries, and as those adjustments become the new normal, they will only further reduce the amount of leverage the siege countries have over Qatar in the future.

“These trade links sooner rather than later will become stable and normal, and this may affect the geopolitics of the region in the future.” -Nader Kabbani, director of research at the Brookings Doha Center

The blockade has accelerated certain political and economic reforms Qatar planned. The reforms are welcome news for Qatari residents, citizens, and businesspeople, but are not linked specifically to the demands of the blockading countries.

Since June, the emirate has abolished visa requirements for 80 nationalities, moved to establish permanent-residency rights for foreigners, and is setting up free economic zones. There are even plans for holding elections to a new legislature.

Rather than scaring international companies out of doing work with Qatar, the diplomatic siege has inadvertently led to a surge in business penetration in Qatar.

Because of severed air links, multinational companies can no longer fly executives on daytrips to Doha from the Gulf’s regional hub of Dubai… This has led many international companies to establish branches in Doha, leading to a 70% rise in the number of firms operating under QTF licenses.

The article cited a recent report by the International Monetary Fund that notes how the diplomatic blockade has “acted as a catalyst for enhancing domestic food production and reducing reliance on a small group of countries.”

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