Qatar is able to weather the economic, financial and diplomatic boycott and its economic outlook is stable, according to Moody’s Investor Service, Mubasher reported yesterday. The service has given the small Gulf State an official “Aa3” rating thirteen months after a land, sea and air blockade was imposed by Saudi Arabia, the UAE, Bahrain and Egypt. The rating covers Qatar’s long-term issuer and foreign currency unsecured debt ratings, which clearly undermines the boycott.
The so-called quartet accuses Qatar of terrorism and extremism. It made 13 demands of the government in Doha, including the closure of Al-Jazeera Network. Qatar, however, denies the allegations and describes them as baseless, and took the issue to the International Court of Justice last month.
“This assessment is in part based on evidence of broad resilience of Qatar’s credit metrics to the economic and financial blockade over the past 13 months,” the New York-based Investor Service said. “The rapid recovery in imports, with initial levels restored in less than four months, illustrates the economy’s flexibility and policy effectiveness in rerouting supplies.”
— Ministry of Finance Qatar (@MoF_Qatar) July 15, 2018
Qatar’s credit profile is supported by its exceptionally high levels of per-capital income, petroleum reserve levels and low fiscal and breakeven prices for oil. Since the start of the blockade, Qatar has refocused its Gulf investments towards South East Asia and European countries.
The economic impact of the boycott has been modest, and largely temporary. The tourism, aviation and real estate sector has taken the brunt of the impact. Qatar has continued to beef up its spending on security and defence, though. Last week, it sought a loan to purchase Typhoon fighter jets around $4 billion. It is unclear why these are being bought, but Doha plans to involve itself in America’s longest-running conflict to date, in Afghanistan, alongside NATO countries by next year.