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Food, flights, football, finance: Qatar's obstinacy has a cost

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Food, flights, football, finance: Qatars obstinacy has a cost

In the biggest face-off in the Gulf region in several decades, Saudi, UAE and Bahrain are among 10 countries to cut off or downgrade ties with Qatar.

Published: Wed 7 Jun 2017, 4:50 PM

Updated: Thu 8 Jun 2017, 12:15 AM

  • By
  • Team KT

Qatar has been put on notice by GCC countries Saudi Arabia, the UAE and Bahrain, along with Egypt, Yemen, Libya, the Maldives and now Jordan and Mauritania.

In the biggest face-off in the Gulf region in several decades, the three GCC nations are among 10 countries to cut off or downgrade ties with Qatar, accusing the latter of extending support to extremists.

On Day 3 of the Qatar crisis, Jordan announced on Tuesday that it will downgrade its diplomatic representation with Qatar after examining the "cause of the crisis". Jordan also revoked the license of Doha-based TV channel Al Jazeera, government spokesman Mohammad al Momani said.

The West African country of Mauritania, a member of the Arab League, too severed ties with Qatar on Tuesday over allegations it "supports terrorists", the state news agency reported, while Opec member Gabon also condemned the small Gulf Arab state.

In addition, Moroccan airline Royal Air Maroc has cancelled flights via Doha to the UAE, Saudi Arabia, Yemen and Egypt after they severed diplomatic ties with Qatar.

MAP said Royal Air Maroc flights via Doha to those countries could not be guaranteed, and the airline's customer service said flights would no longer be available.

With the three GCC countries also imposing airspace restrictions on flights to and from Doha -- and Saudi barring all land transport to and from Qatar -- the tiny country now only has narrow corridor with which to continue trade and travel via sea and air.

In an interview with CNN, Dr. Anwar bin Mohammad Gargash, UAE's Minister of State for Foreign Affairs, said the UAE and other countries are fed up with Qatar's 'duplicity'.

When asked what Saudi Arabia, the UAE and their allies were hoping to achieve by severing ties with Qatar, Dr Gargash said: "Two things. I think the first is to make it clear that various countries -- Saudi Arabia, Bahrain, the UAE, Egypt and other countries -- are fed up with this sort of duplicity that is undermining the region. And to send a strong message that this is time for cooler heads to restructure Qatar's approach and foreign policy."

The UAE has made it clear that its decision to cut ties with Qatar has neither been hasty not without justification -- rather, the decision follows extended and ongoing attempts to reform Qatar's behaviour.

The UAE is disappointed in that Qatar has failed to live up to its commitment under the Riyadh Agreement and its supplementary accord signed in 2014.

Qatar's government continues in its support for terrorist organisations in Libya, Syria and Yemen.

In addition, Qatar's government continues its interference in the internal affairs of the UAE and other countries.

Finally, Qatar's government also continues to propagate and promote the ideology of extremism and terrorism, from Al Qaeda to the Muslim Brotherhood, across its media channels.

The Qatari government's support to extremism and its obstinacy has resulted in the country's isolation, with no less than 10 countries severing or downgrading ties with it.

The ramifications of the move are diplomatic and logistical in nature.

Food

Qatar doesn't produce much of the food that it consumes, and the country is largely dependent on food from neighbouring countries, particularly Saudi Arabia. On a daily basis, hundreds of refrigerated trucks from Saudi Arabia carrying milk, chicken, cheese, eggs and other perishables enter Qatar.

With Qatar's only land border now shut, food prices are likely to shoot up. Fearing just that, Qatari citizens and residents are said to be stocking up, foreseeing food shortages in the ongoing summer months.

Flights

Qatar Airways has been the biggest loser of Qatar's diplomatic isolation so far, with scores of its short-haul aircraft -- the ones that were used to ferry passengers primarily from Saudi Arabia and the UAE for connecting flights to Europe, Southeast Asia and even Australia -- now lying idle, occupying hangar space at the huge Hamad Airport.

Not being allowed to use Saudi Arabian, Emirati, Bahraini or Egyptian airspace also means that Qatar Airways flights will have to take a circuitous route to almost any destination they fly to, which means longer duration, i.e., more fuel cost and longer turnaround times. This will obviously result in higher ticket prices unless Qatar Airways decides to absorb that and risk running losses.

Finance

And then there's the financial burden that Qatari companies and banks are facing. The Doha Stock Exchange has already earned the ignominy of being the most volatile index of the day, but that may just be the tip of the iceberg.

To build infrastructure in general as well as to prepare to host the Fifa World Cup football tournament in 2022, Qatar's government has borrowed at home and abroad. With its recent isolation, the financial world was quick to react and Qatari bond prices dropped on Monday, pointing to the rising borrowing cost that lies ahead for the tiny country.

To add to it, some Egyptian banks have already halted dealings with Qatari banks, with local banks in Saudi Arabia and the UAE waiting for guidance from their respective central banks.

Football

Any prolonged standoff will see a major impact on Qatar's long-term projects, most notably the 2022 Fifa World Cup. With the Saudi border remaining tightly shut, importing building material like concrete, iron and aluminium via air will prove to be extremely costly, and result in cost overruns and project delays.

In a nutshell, Qatar's government needs to demonstrate that it will abide by the agreements it has signed to bridge what UAE's Dr. Anwar Gargash has said is a clear "lack of trust".



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