The question occupying the minds of those in Qatar is not how the land, sea and air blockade imposed by Saudi Arabia, the UAE and Bahrain can be lifted. No one is asking what quick measures can be taken to bring about the end of the harsh economic embargo which has negative implications not only on the nation but the people and the economy as well.
The question occupying everyone's mind is: What will happen after the end of the blockade? Or in other words: What will we do in the coming period and what will we do to ensure our own self-sufficiency? What are the government's plans in terms of reducing the price of commodities and imports? What is the plan with regards to moving away from relying exclusively on gas and oil as a main form of revenue? How can we avoid this happening again in the future?
Political and economic decision makers in Qatar are heavily invested in the previous question, as they have managed to handle the crisis of the embargo with the least amount of strain and have even managed to prevent losses in some instances. Residents and citizens of this Gulf state are not only invested in the wellbeing and security of the country, but also in its stability. Everyone has noted the availability of all kinds of goods since the start of the crisis and many have noted that there has not been an increase in the price of goods, including imported commodities. Many have found that the financial sector and the banking community, as well as currency rates have all managed to remain stable.
Thus, Qatar has successfully ended the economic embargo that has been imposed on it by Saudi Arabia and the UAE less than two weeks ago in the same manner that it successfully countered air, sea and land invasions in the past few years. What is more important to note here is that it succeeded in not only protecting its markets but in paving the way for new opportunities that can be taken advantage of if pursued properly.
Qatar's successes can be attributed by several indicators, which cannot be ignored by neutral parties:
Over the course of the last two weeks, Qatar has successfully met its commodity needs by attracting new suppliers, including: Turkey, Greece, India, Oman, Kuwait, Iran, Iraq and others. Large containers of goods were flown into Hamad International Port, loaded with various commodities. A fleet of Qatari airplanes succeeded in forming an air brigade to protect the transport of all the good to local markets, including livestock and cattle.
Despite the large amount of concerns among foreign investors in Qatar during the first few days of the blockade, due in large part to the political implications at hand, the Qatari Riyal maintained its monetary value against the dollar and other currencies. Its value has not fallen despite the large amount of uncertainty facing the country in the early days and the media's claims that the Qatari currency will surely fall.
Due to the stability of the currency the country maintained more than $200 billion in cash liquidity, nearly $335 billion in the country's sovereign fund and nearly $42 billion in foreign exchange reserve.
The stability of the Qatar riyal also prevented the Central Bank of Qatar from imposing restrictions on its customers both at home and abroad. The message to policy-makers was clear: There is no need to abandon our currency, nor will we allow people to speculate over the worth of our currency and cause a sense of fear for both foreign and domestic investors.
Qatari stocks experienced a ten per cent loss in the first days of the blockade, especially considering many foreign investors sold their stocks out of fear of the unknown. There were many economic and political uncertainties but the ability of the Qataris to break the siege quickly convinced many policy makers to return to the stock market once again. Suffice it to say that the stock market gained $1.3 billon in transactions last week, completely offsetting the losses of the crisis.
Infrastructure projects have not been negatively impacted by the recent events, especially those relating to the World Cup in 2022. It was speculated at the beginning of the siege that the shortages of building materials coming from Saudi Arabia would negatively impact this project; however, the government has invested billions into this project and has ensured that surplus materials are stored in warehouses, including iron etc.
Although Qatar Airways lost nearly six per cent of its value due to its inability to fly into other countries within the GCC, it quickly found new partners, paved new agreements and added more destinations to its list of options around the world.
In general, one can say that Qatari policy makers had a clear and direct message to the world: there are no problems facing Qatar's currency, markets, stocks and other financial institutions. The state is more than prepared to counter such challenges.
The above mentioned points are in reference to breaking the siege from the inside out so what can we say about the outside in?
Qatar's senior decision makers have sent the message that the country will continue with its natural gas trade exports including those to the axis, which relies on Qatar for nearly 30 per cent of its gas needs. Qatar has the resources and reserves to counter the economic blockade for years to come and can hold back on any potential losses.
Doha has managed the current crisis with great calm. It has regained the trust of its local and international investors and has done so quickly. What is written here is with regards to the current situation, so what can we say about the future? Is the government working to diversify commodities and import options? Is it possible to accelerate plans related to the diversification of national income, resources and agriculture?
Translated from the New Khalij, 19 June 2017.
The views expressed in this article belong to the author and do not necessarily reflect the editorial policy of Middle East Monitor.