The Qatar Crisis and the Future of the GCC
Qatar is no stranger to escalation from its fellow members of the Gulf Cooperation Council. In 2014, Saudi Arabia, the United Arab Emirates, and Bahrain recalled their ambassadors, and severed ties with the country for “meddling in international affairs”. Before that, Saudi Arabia withdrew its diplomatic corps from Qatar in 2002 until 2008 for alleged negative press from Al Jazeera, which Saudi Arabia perceived as “anti-Saudi”. Qatar’s Gulf adversaries have habitually tended to view the country as a threat to political and physical security in the region.
As a result of this previous diplomatic conflict, in 2006, Saudi Arabia revoked its approval of Qatari plans to construct a multibillion-dollar gas pipeline from Qatar to Kuwait. Constructing the pipeline required access to Saudi territorial waters, and sought to further monetize Qatar’s share of the South Pars/North Dome field. The South Pars/North Dome field is the largest natural gas reserve in the world—and is shared with Iran, a historic foe of the Saudi government.
In each previous instance, reconciliation has been reached in one way or another. Ambassadors were restored, diplomatic ties reestablished, and trade routes reopened. However, this current crisis bodes ill for the relations between Qatar and its regional counterparts, and for the future of the Gulf Cooperation Council.
Last month, four Gulf countries made international headlines when they severed diplomatic ties with Qatar, calling the country a “terrorist financier”. Saudi Arabia, Egypt, Bahrain, and the United Arab Emirates subsequently slapped a trade embargo on Qatar, and then presented a list of 13 demands to end their punitive blockade. The demands included cutting funding to Islamist groups, shutting down government-run news source Al Jazeera, and diminishing diplomatic relations with Iran. Qatar rejected all 13 before the requested deadline was even up.
The ongoing embargo has already had a significant impact on the country’s economy and could worsen if a resolution is not reached soon. Several agencies, including the S&P, have lowered Qatar’s global credit rating and the credit rating of its national bank. Countries participating in the embargo have suspended all travel and shipping to and from Qatar. The Qatar Stock Exchange dropped 7% in value and saw nearly 50% reduction in trade volume on June 5th, when the embargo was announced.
The GCC has historically had issues with Qatar due to its bankrolling of terrorist organizations, diplomatic ties with Iran, and state-sponsored news outlet Al Jazeera, which has openly criticized other GCC states. The crux of this conflict is similar: Qatar’s history of supporting and harboring key members of the Muslim Brotherhood, which most of the GCC has rejected and Saudi Arabia, Egypt, and the UAE have designated a terrorist organization.
The threshold for what Qatar considers extremism differs from that of the UAE and Saudi Arabia, especially as it pertains to the Muslim Brotherhood and Ahrar al-Sham. Saudi Arabia and the UAE assert that Qatar has deliberately supported individuals, groups, and media that directly threaten security and stability. In particular, Qatar has served as a safehaven for the Muslim Brotherhood, providing the organization with support and refuge. To the UAE and Saudi Arabia, Qatar’s policy is another precarious force in an already-unstable region.
Qatar does indeed have a dubious history of suspected state-sponsored terrorism. In 2014, Congress formally recognized that members of the Qatari royal family had been using charity foundations to launder and funnel millions of dollars to al Qaeda, Hamas, and the Al Nusra Front, which the United States designates as terrorist organizations. It additionally ran a safe house for terrorists, and provided direct funding to abu Musab al-Zarqawi, who founded and led al Qaeda in Iraq, under which ISIS later developed as an offshoot.
From a U.S. standpoint, the issue is particularly complicated. It is likely that the Saudis and Emiratis are acting now as they feel emboldened by their successful strengthening ties with the Trump presidency, allowing them to become more assertive and hegemonic in regional affairs. However, this dispute threatens key relationships in an already-volatile region, and risks hamstringing U.S. cooperation with Gulf allies—effectively, hurting those relationships the Trump presidency has worked hard to reset. In particular, Qatar is home to the Al Udeid Air Base, the largest U.S. base in the Middle East and is also used by the Coalition forces to launch airstrikes against ISIS. More than 11,000 U.S. and Coalition forces are assigned there. On the other side of the coin, Bahrain houses a key U.S. naval base, the Navy’s Fifth Fleet. At the present conjuncture, a quick resolution between Qatar and its Gulf adversaries seems unlikely; and even if they manage to reach a settlement, the scars left from this conflict will run deep for decades to come.
On July 11, U.S. Secretary of State Rex Tillerson signed a Memorandum of Understanding with the Qatari foreign minister, Sheikh Mohammed bin Abdulrahman al-Thani. While the Qatar question can be traced back years, the timing for this signing is strategic given the punitive blockade beginning last month. While the GCC remains skeptical of Qatar’s dedication to stop financing terrorist groups, some analysts assert that signing the MoU with the United States provides a stronger statement, even if the signing is unrelated to the crisis and blockade, as Qatar stated. The MoU should certainly ease at least some tensions in the Gulf.
The question remains, though, as to how the crisis in the Gulf will play out. Qatar is unlikely to meet any of the demands stipulated by its adversarial quartet, least of all sever ties with Iran, as they share the world’s single largest gas field. While escalation against Qatar is unlikely to become militarized—especially due to the U.S. air base located there—it is probable this will be the breaking point for Qatar’s place in the GCC, and quite possibly for the Council itself.
On July 10, al-Thani threatened to withdraw Qatar from the GCC when he sent their secretary general an ultimatum requesting a reversal of the sanctions against the country. The request included a three-day notice to “lift the siege” upon Qatar, and demanded compensation for the economic losses that the country had sustained in the last month. The primary financial index for the country fell nearly 8% in a day, and has struggled to recover.
Qatar itself has downplayed the impact and long-term significance of the diplomatic crisis. Their MoU with the United States indicates they intend to keep in Washington’s good graces, at least, as much as possible—which likely means avoiding direct intervention from Iran.
Qatar’s unwillingness to compromise so far may suggest one of two things. As has been the case in recent history with similar diplomatic crises, Qatar may believe that it is only a matter of waiting out the impasse with the GCC before declaring a superficial moral victory and resume relations with Qatar. Or, Qatar may seek to pivot away from its relations with a majority of the GCC countries and instead strengthen its relations externally, primarily with Iran, the United States, and Turkey.
The longer this crisis protracts, the greater the chance that the Gulf Cooperation Council is finished. On the other side of the Gulf, Iran is likely to fully capitalize on this opportunity to expand its regional power. Following the embargo, Iran was first to offer Qatar food shipments after a food shortage began in Qatar, who depends heavily on land imports through Saudi Arabia.
And while Qatar has always been the odd duck of the GCC, its departure from the organization would be a devastating blow to the union. Qatar has the highest per capita income in the world, and its shared naval bases and geographic position on the Persian Gulf is vital for shipping, security, and counterterrorism strikes in the Middle East. Without Qatar’s assistance, the Council will be strained by the ongoing crises already pushing the GCC to its limits, including the war in Yemen, war on terror, and perpetual tensions with Iran. Unless the situation is resolved, quickly and peacefully, the Gulf Cooperation Council may be witnessing its final stand.