The ships coming into Qatar’s new port are sparse in number and the port cannot be described as bustling, but the fact they are coming at all is what counts.
Lined up at the quayside is the Green Guatemala, a Brazilian-flagged Turkish vessel carrying 3,000 tonnes of food. Next to it is the Panama-flagged Awassi Express, a specialist livestock carrier, offloading thousands of Australian sheep for slaughter.
For all the fears aroused by the blockade imposed on Qatar by its Gulf neighbours, the country is not going to starve.
Five weeks in, moreover, it looks likely that Qatar could even thrive, at least compared with the rest of the region. It is, after all, the richest country in the world per capita, so has a considerable cushion before being reduced to crisis.
Total, the French energy giant, confirmed this week that it would take up a contract to develop the Qatari al-Shaheen offshore oilfield with Qatar Petroleum. The contract for the 300,000 barrels-per-day field is set for 25 years.
Advertisement
Saudi Arabia, the United Arab Emirates, Bahrain and Egypt were hoping that political and economic pressure would tell quickly when they announced their blockade at the start of last month. Diplomatic ties, direct flights, the Saudi-Qatar land border and trading links would all be cut until Qatar gave in to demands to cut its links to political Islam and Iran, and close down the Al Jazeera television network.
There was immediate panic in the shops — 80 per cent of Qatar’s fresh food came from Saudi Arabia. Longer-term fears were that co-operation, particularly in the vital energy sector, would undermine the core strength of Qatar’s economy, its energy and particularly liquid natural gas exports.
Those fears were enough for the main credit ratings agencies to downgrade the outlook for Qatar’s debts from stable to negative.
However, if they wanted a quick result, the Saudi-led allies may have miscalculated. The Qatari economy is simple in its basic structure and, along with the rest of the Gulf Co-operation Council (GCC) countries, not dependent on intricate supply chains. Intra-GCC trade, apart from oil, is less than 10 per cent of the total, and Qatar’s foes have been careful to leave energy markets out of the blockade. The reliability of the Gulf as an energy trading partner is too valuable for all concerned.
In short, Qatar exports gas and oil, imports everything else, and has a developed service sector. Unless its rivals were physically to block its ports, there is not much they can do.
Advertisement
Robin Mills, who runs the UAE-based Qamar Energy consultancy, said no big changes to business plans were being reported. He said the main threat would be raised costs in the long term, as new import routes came into use, but those are being met by the government. The other miscalculation may have been failure to notice the £5.7 billion Hamad Port in northern Qatar, which became operational last December. Until the blockade, many of Qatar’s imports came through Dubai’s Jebel Ali port and then by land to Qatar. Now, Qatar can import directly.
“This blockade will do very well for us in the medium to long term,” Ali Shareef al-Emadi, the country’s finance minister, said. “We are a peninsula but now we are operating like an island.”
Another unlikely supply line has also opened up. Qatar serves 25-30 per cent of the world’s market for helium but that came to a halt. Its specialist containers were also shipped through Dubai. As soon as the containers could be sent to Hamad Port, production at the nearby Ras Laffan refinery resumed.
It is certainly not plain sailing for Qatar. Akbar Al Baker, chief executive of Qatar Airways, said the loss of routes to Saudi Arabia and UAE, and the longer flight paths planes had to take to avoid their air space, would hit profits. But in the year to March, it made $540 million, 22 per cent up on last year.
With fewer people to keep happy, and a cushion of $300-$400 billion in its sovereign wealth fund to do so, Qatar may be in a better position to weather the storm than the UAE or Saudi Arabia. Riyadh is at the beginning of an attempt to open up its economy and establish itself as a place to do business — hard if you are trying to put pressure on global firms over who else they can trade with.
Advertisement
Budgets in both countries have been affected by the long-term decline in oil prices, which shows no sign of abating.
The four states may dislike Qatar enough to want to bring it down — but not to bring themselves down with it.
