Qatar Blockade: Two Years since Independence, Foreign Investments Flow in
When it comes to investments in the Middle East, due to the ongoing Qatar blockade, businessmen feel a bit reluctant to invest in the tiny oil rich country.
It is true that the economic and diplomatic boycott imposed by four of Qatar’s neighbouring countries on June 5, 2017, shook the country initially. But the effects didn’t last for long.
Following the Qatar blockade, the country had a long battle in front of it, not in terms of a physical war but a war to convince the world that Qatar doesn’t support any draconian activity and that the country is a thriving option for investments.
After not giving in to the demands of the boycott-imposed countries, such as shutting down the state media channel al-Jazeera and ending economic cooperation with Iran, Qatar has successfully been surviving post two years of the economic embargo.
Prior to the blockade, Qatar imported most of its food supply from its neighbouring countries. Post the blocking of the air, sea and land routes, the country acted quickly to find alternative supply routes via Iran and Turkey. Soon, the tiny Gulf nation boosted its domestic production by importing tens of thousands of cows for milk production.
Within three months of the Qatar blockade, the country opened its $7.4bn deep-water Hamad Port, which ensured the entry of larger cargo ships. After the country ensured uninterrupted food and consumer goods supplies to its citizens, it moved further to build relations with the Western powers, particularly the US.
State owned airlines Qatar Airways, which recently bagged the ‘Airline of the Year’ recognition by Skytrax, signed a multi-billion dollar of ordering Boeing passenger planes with the US post the blockade. The airline is set to receive unlimited access to the EU airspace following a recent deal between the EU and Qatar.
Qatar ramped up its defence sector by signing a $12 billion deal for the purchase of US-made F-15 fighter jets in 2017. The world’s largest exporter of liquefied natural gas also announced a $5.9 billion deal of seven warships from Italy in the same year.
Almost ten months after the Qatar blockade, the US announced to sell guided missiles to Qatar worth $300 million. In early 2019, 36 French-built Rafale fighter jets were delivered in the oil rich country.
To stimulate foreign investments in the country, the Qatari government recently announced economic reforms related to labour laws, privatisation, and higher foreign ownership limits, making it easier for individuals to invest in the country.
The country’s trade surplus reached $52 billion in 2018. According to the International Monetary Fund, Qatar’s economy grew by 1.6 percent in 2017 and is expected to rise up to 3.1 percent in 2019.
When the Qatar blockade started, Michael Stephens, Middle East research fellow at London’s Royal United Services Institute, said that Qatar would need to prove “that the economy was robust, that it was a good place to invest, and that the Qataris were creating conditions that will make it easier for foreign direct investment to thrive.” Well, it seems like the tiny Middle Eastern country has proved its worth to the world in less than two years of gaining independence from other dominating Gulf countries.
The crisis management strategy of the Qatari government is worth appreciating. It wouldn’t be wrong to say that despite the economic and diplomatic embargo, Qatar maintained the economic growth of not just its core industries, but also gave an open ground to education, tourism, sports and other sectors, making it a desirable location for investments in the Middle East.
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