After 1000 days ... what has been achieved for Qatar? What did the blockade countries lose?

Dr. Khaled Al-Khater *

The countries of the siege failed and the siege failed and led to counterproductive results. The goal of the siege countries was to curb the rise of Qatar and limit its independence and put it under Saudi tutelage and the guardianship of the siege countries. This unbridled desire of the siege countries was confirmed after the outbreak of the Arab Spring revolutions and the positions of the siege countries differed with the position of Qatar.

To achieve this, Qatar's economic strength had to be broken, whether it was:

- Through the economic war on Qatar and attempts to strike the currency and destabilize the country’s financial and economic stability, then to destabilize the regime and bring it down.

Or, through the blockade in its broader form, by destroying everything that feeds the rise of Qatar from resources and symbolizes it as manifestations of solid or soft power, economic were Qatar's natural wealth, and its foreign investments, and Qatar Airways, or media such as Al-Jazeera satellite channel, sports or symbolic as an organization Qatar's World Cup football championship, which is the most important at the global level for the first time in the Middle East, including the indications of Qatar's financial and organizational capabilities, its global impact and the level of confidence it gained.

Economic strength enhances political independence
In economic power there is a political and independent power in the sovereign decision, and there are many examples of that. Compare, for example, Qatar and Bahrain. Bahrain is deemed sovereign and does not come out of the Saudi abaya and much of that is due to economic weakness and need.

But what happened in the case of Qatar was the opposite. Rather than the blockade weakening the Qatari economy, it strengthened it by relying more on itself, limiting exposure to the blockading countries, diversifying production and economic partners, strengthening the country's geo-economic relations, and moving forward on building a strong and isolating economy For neighbors who cannot be trusted to avoid future shocks and economic instability.

Anti-blockade policies
For further clarification, Qatar has adopted two types of anti-blockade policies.

First: Policies in the short term to face the impact of the shock and enhance the stability of the import sector and the financial sector through support and direct intervention and the transfer of lines and sources of supply to alternative destinations, and expanded storage capacities for food security and logistical supply to ensure the flow of goods at appropriate prices, and to intervene by pumping liquidity into the financial sector to compensate for Exiting capital and enhancing currency stability and financial stability.

Second: Policies in the medium and long term, focused on diversifying import and production and strengthening Qatar's economic and geo-economic relations. In the real and external sectors, for example, Qatar has adopted a set of policies to support agricultural and animal production and light industries, attract tourism and investment, and diversify economic partners.

It continues in infrastructure and World Cup programs, in accumulating and diversifying foreign investments, increasing natural gas production to support reserves, confidence and growth, and linking Qatar's exports and investments to countries affecting the global economic and political arenas, to build relationships on common interests with these powers.

The transportation and tourism sectors remain the most affected by the blockade due to the geographical conditions, and Qatar has adopted policies in this regard to attract tourism and has entered into partnerships with some other international airlines.

These policies have resulted in the blockade of the embargo, more flexibility in import, more diversification in production, greater exposure to the world and less to the blockading countries, and thus to more economic power, and then more political independence.

Was Qatar ready for this blockade?
We can say that Qatar was largely automatically prepared for two factors: the weak structural composition of the economies of the Gulf Cooperation Council states, and the solidity of the Qatari economy in facing the blockade.

First: The weak structural composition of the economies of the blockading countries does not provide these countries with the tools needed to impose a successful economic blockade on Qatar, as these economies are structurally weak, meaning that they are all specialized in extracting one resource, which is oil, and exporting it to the outside world, and in return importing what they need of consumer goods Capitalism and employment from abroad, overseas and open international skies.

Therefore, it does not have much that can be exchanged between them or what can be pressured on Qatar through the commercial blockade, and intra-regional trade in the GCC countries has remained at 10% for decades, the failure of Gulf trade integration, and the failure of Gulf economic integration in Most other areas - energy, industry, transportation, currency and others have not had the blockade countries the enabling economic environment to impose a meaningful economic blockade on Qatar, and reduce the cost of the blockade on both sides.

There are no unitary systems - such as a monetary union or an energy union - for example - that its collapse will lead to the loss of some gains, losses, or destabilization of the Gulf economic stability. Rather, if such unitary systems existed before the blockade, they would have formed barriers against its imposition from the original.

And perhaps beneficial harmful to Qatar, when the Kingdom of Saudi Arabia failed the Gulf economic integration in several fields - including building a bridge between Qatar and Bahrain, and connecting the countries of the region to a giant electric power plant and obstructing the marketing of Qatari gas at the Gulf level - that opened the horizon wide for its global marketing. Qatar has become a giant in the energy, producer and first source of LNG in the world, supplying it with a third of its needs, so its stability has become important for the energy supply and stability of the global gas market, growth in many countries and economic powers across the world.

Second: The solidity of the Qatari economy as a result of adopting sound policies that established productive, infrastructure and investment structures that formed arms for breaking the blockade. Qatar early adopted sound macroeconomic policies to exploit huge natural resources and build a strong real economic and capable of absorbing shocks during two decades before the imposition of the blockade, by investing in:

- Building productive structures by establishing the largest infrastructure for the production and export of LNG in the world, and this has formed a stable income source for Qatar to an acceptable level during previous crises and during this crisis.

- Modern and advanced infrastructures from a communications network, ports, and airport that connect Qatar to the outside world and help it to overcome the blockade and access to the original and alternative import sources.

- Investment structures to accumulate and invest the revenues of the hydrocarbon sector and distribute it geographically and economically (via financial and real assets, such as oil and industry, etc.) to be used to manage the economic cycle and promote economic stability in times of recession and crises, in addition to diversifying sources of income and preserving the rights of generations, strengthening Qatar's relations and linking its exports and investments with influential forces Worldwide.

- Adopt macro (conservative) precautionary policies that reflect the financial cycle to fortify the financial sector early with the beginning of high oil prices and the beginning of the financial cycle, during the years 2003 and 2004, and these policies fortified the financial sector against the shocks and past and current financial crises.

In sum, the economic policies adopted by Qatar can be classified into two types:

Sound economic policies before the imposition of the blockade.

Sound economic policies against the embargo after its imposition.

These policies and infrastructure are bearing fruit now, and they constitute tributaries to support the stability of the Qatari economy in the face of the blockade, as they have led to more power and economic independence and thus more political independence.

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* Specializes in monetary policy and political economy at the Center for Macroeconomics and the Institute of New Economic Thought at the University of Cambridge.