I write to you from Qatar. Since June 2017, a group of states (including Saudi Arabia, Bahrain, the United Arab Emirates, and Egypt) severed diplomatic relations and imposed an economic blockade on Qatar. The imposition of the blockade led to a significant amount of uncertainty within Qatar—both economic and social uncertainty.
The imposition of the blockade (also called the GCC Crisis) has indeed, led to certain challenges within Qatar. The blockade, among other things, impacted air travel, shipping and trade routes, and the media industry. An airspace blockade resulted in the immediate suspension of airline services from Qatar to 18 destinations, significantly impacting personal and commercial travel in the region. Qatar, which previously relied on a significant amount of food imports, had to find alternative sources in order to avoid disaster.
Times were uncertain. But that said, the GCC crisis has led to some unintended positive consequences for Qatar. It has been a catalyst leading to positive, necessary change in the country.
So even though the blockade hasn’t been entirely positive for the Qatari citizens it may, in fact, be a blessing in disguise. For the reasons below, the entire world and the UK which is facing tariffs from the EU on a hard Brexit should be looking at the resilience of the Qatari economy.
Particularly, investors from the United States and the United Kingdom are starting to notice the increasing attractiveness of investments in Qatar.
For instance, Qatar has announced $29 billion in new, major projects that United States companies will compete for (and which will generate 100,000 new American jobs). Along with this, the 2022 FIFA World Cup is also presenting a massive opportunity for American investment. In fact, it is expected to generate up to $10 billion in business opportunities for American companies. According to the export.gov, which helps US companies export goods around the world, some of the most attractive opportunities for American companies include infrastructure, Information, Communications, and Technology (“ICT”), food products, energy, healthcare, aviation and defense. While these are not the only opportunities for US companies, they have presented unique options considering that the blockade is ongoing.
As for the United Kingdom, Secretary of State for International Trade Liam Fox recently called Qatar the UK’s “natural partner” for trade. The UK’s National Vision 2030, among other things, is calling for a commitment to support Qatar as part of the UK’s mission to diversify its economy. Currently, the biggest UK investor in Qatar is Royal Dutch Shell, which is also planning on investing even more capital into Qatar’s North Field. Along with its investment in its day-to-day operations, Shell is also investing in Qatar’s educational sector. The UK government and the British companies are also examining how to closely work with Hamad Port to leverage trading routes that Qatar has established.
While these are just several examples, it is clear that the UK sees significant value in investing in Qatar—notwithstanding the current blockade.
While the US and UK are juggernauts in terms of foreign investment, the Qatari government continues to welcome all forms of Foreign Direct Investment (FDI). The establishment of Free Zones and significant legal reforms have created a business-friendly environment, providing foreign investors with the security that they need to deploy their capital.
Both the government and citizens of Qatar have experienced quite dramatic changes within the last two years. The blockade certainly changed the way that business is done throughout the country. But having said that, the uncertainty and stress caused by the change has resulted in a significant number of unintended, yet positive consequences.
The blockade, in fact, is likely to make Qatar stronger.
Qatar’s embrace of FDI from British companies among other things, has led to an impressive economic growth for the country. With many exciting developments on the horizon (including the 2022 World Cup) Qatar is positioning itself nicely for the future—irrespective of geopolitical events.
Ultimately, the Qatar blockade may be a blessing in disguise. Outside investors—particularly those in the US and UK—should pay close attention.