The recent diplomatic rift between Qatar and other Arab states — like Saudi Arabia, Bahrain, UAE and Egypt — has again highlighted the geopolitical significance of the region beyond the oil factor. It emerged as a result of an allegation that the small gas-rich country supports and funds terror through its support of Iran and Muslim Brotherhood, a Sunni Islamist political group outlawed by both Saudi Arabia and the UAE.
These allegations have been been in focus in the past as well. An American intelligence report in 2015 had accused Qatar of financing Hamas. It has also been accused of funding al-Qaeda affiliates like Al-Nusra. Qatar’s hosting of the Afghan Taliban, including by providing it with an ‘embassy’, has also invited widespread criticism. However, the Saudi-led action this time seems to be mainly targeted at Iran. A few days before the announcement of the boycott, U.S. President Donald Trump had accused Iran of being a regional terror sponsor. He later spoke in favour of the sanctions against Qatar, unmindful of the fact that the Gulf monarchy hosts the largest U.S. military base in West Asia. Historically, Qatar has avoided allying itself closely with either Saudi Arabia or Iran. It shares the world’s largest gas field with Iran, hence can’t ignore it.
As regards the impact of sanctions on India, it depends on Qatar for 90% of its natural gas requirements and hence is likely to maintain its good relationship with the monarchy. A few days after the crisis began, the External Affairs Ministry had made it clear that India didn’t foresee any issues caused to its own relations with countries in the region. However, the Qatar Airways flights between India and Doha will be affected as following the UAE’s decision to not allow its air space to be used, the flights will now have to get routed through Iran.
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The sanctions will certainly hurt the Qatari economy. However, with its foreign exchange reserves of about $335 billion, it is expected to avoid an economic crisis in the short term. The newly expanded port facility will help it continue its gas exports. However, Doha can’t allow the dispute to drag on for long. A long-term crisis is likely to make borrowing more expensive for the government, affecting its ability to build infrastructure for the 2022 FIFA World Cup.
The Gulf Cooperation Council (GCC) countries need to negotiate and find a solution, keeping the group’s collective agenda in mind. A diplomatic freeze will only allow non-state actors like the Islamic State (IS) to strengthen their presence. Cooperation between Iran and Sunni Arab countries is also desirable for the benefit of both. The U.S. has been successful in balancing its strategic ties with the countries in the region. However, recent statements by Mr. Trump against Qatar, in which he accused Doha of funding extremism, risk upending the balance. Qatar needs to choose between aligning its policies with those of the regional heavyweights or greater isolation. It is not yet strong enough to have its own independent regional doctrine.
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