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#Qatar Progress Shouldn’t Hinder Efforts to Resolve the Gulf Crisis

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Qatar’s recent decision to open its borders to Irish meat is just the latest effort by the country’s rulers to withstand the ongoing crisis, a little more than a year after the start of the Saudi-led blockade. To date, Qatar has shown remarkable resilience in weathering the storm, having diversified its imports, boosted domestic production, and enhanced its international image.

However, it would be a mistake to interpret the embargo as a blessing in disguise, or indeed as anything other than the international crisis it is. Despite the unexpected positive side effects that the trade ban has engendered, both Qatar and the blockading countries have seen their economies suffer as a result. More concerningly, the rift has threatened to further destabilize the region, with the reverberations potentially impacting Europe and the rest of the world.

Isolation breeds diversification

Citing concerns over its ties with Iran and its alleged support for terrorism, Saudi Arabia, Egypt, Bahrain and the UAE officially imposed a blockade on Qatar in June 2017. With the country previously dependent on exports for 80% of its food (40% of which came through Saudi territory), Qatar was forced to look to alternative sources to meet the needs of its 2.57 million people.

The Central Bank took the economic hit on the chin, injecting $38.5 billion of its vast $340 billion reserves into the banking sector to offset a fall in deposits, while also spending $250 million on flying food into the country for the first two months. The bold move bought the Qataris time to seek alternative arrangements with other markets, such as the recently-announced deal with Ireland over meat imports.

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The land of overnight milk and honey

In addition to reconfiguring Qatar’s bilateral trade relations, the blockade has also served to spark a drive for self-sufficiency. At the time of the imposition of the trade ban, Qatar had no cattle and relied on Saudi Arabia for the entirety of its milk supplies, resulting in a huge deficit. After initially turning to Turkey and Iran to plug this shortfall, the country is now concentrating on domestic milk production.

Under the guidance of an Irish cattle farmer from County Kildare, the farm of Baladna, 60km north of Doha, has been importing thousands of cows from the US. At present, it boasts 14,000 cows capable of being milked by sophisticated machinery 24 hours a day. That’s enough to provide almost enough milk to satisfy the whole country.

Plowing ahead with World Cup preparations

Though the emirate managed to start building dairy farms in the desert, there have been limits to the kinds of goods it could produce domestically – notably construction materials. With Saudi Arabia having been a major source of these materials pre-crisis, Qatar quickly rerouted construction supply chains in an effort to maintain pace in building new hotels, stadiums, and other infrastructure ahead of the 2022 World Cup. Turkish firms, in particular, have been chief among those bidding for new projects as the country pushes ahead with construction for the tournament. In total, Turkish imports increased to $523 million between June and December 2017, a jump of nearly 50% from the same period in 2016.

The crisis also helped spur Doha to take more decisive action to protect migrant workers, an issue that had been an ongoing source of criticism surrounding its World Cup bid. According to Human Rights Watch’s World Report 2018, the emirate announced a series of reforms in 2017 that if implemented would “usher in some of the most progressive human rights standards in the gulf region.”

Silver linings must not obscure seriousness of issue

However, these positive points should not distort the facts of the Gulf crisis, nor detract from its gravity. There’s no denying that overall, the embargo has had a negative impact on Qatar’s economy. In addition to the loss of over 10% of its reserves of wealth, tourism revenue has fallen by $600 million, 20% of Qatar Airways flights were cancelled (resulting in a $3 billion loss for the carrier) and real estate prices dropped by 20% in the first six months after the announcement of the blockade.

Its enforcers have not escaped scot-free either. In particular, Saudi Arabia and the UAE have hemorrhaged billions of dollars through lost food exports, while the ramifications could have been much worse for the latter country had Qatar not adopted such a diplomatic approach to the issue. With the UAE dependent on Qatar for 40% of its electricity supply, a more confrontational response to the blockade could have put a huge dent in Emirati tourism revenue.

Looking at the bigger picture, the schism spells trouble for the world stage, as well. It represents the first major crisis that the GCC has faced since its inception in 1981, and the ongoing dispute, coupled with a series of accords recently signed between the UAE and Saudi Arabia, threatens to undermine it once and for all. That would serve to further destabilize the area and advance the one thing the embargo was designed to prevent: Iranian influence.

Resolution in interests of all

With President Trump’s intransigent stance on the Iran nuclear deal further destabilizing the Gulf, stability and security is what this most volatile of regions craves more than ever. The ongoing collaboration of the GCC, supported by EU and US cooperation, is key to keeping a lid on tensions and preventing hostility from descending into open warfare.

Already, the High Representative of the EU Federica Mogherini has spoken out in support of Kuwait’s (so far unsuccessful) attempts to mediate the crisis, and individual states – notably France – have become involved in efforts to bridge a consensus. In December, French President Emmanuel Macron visited Qatar in large part to discuss the blockade, where he emphasized his desire for dialogue and his support for Kuwait’s mediation efforts. And last week, Macron met with the Emir of Qatar Tamim bin Hamad Al-Thani in Paris, where he repeated his call for an end to the blockade.

Yet a more involved role is required of the European bloc. The combative nature of American foreign policy at present makes the US unsuitable for the task, while the EU’s years of experience in managing internal disputes and reaching resolutions could prove invaluable to ending the crisis. Without EU intervention, the economic resilience and fragile peace in the region could come apart at the seams.

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