Qatar: Conflict with regional neighbors heightens risks

6/22/2017 - Report
ic_blogtagQatarCountry Risk

Country Report

Under pressure from neighbors

On 5 June 2017, Saudi Arabia, the UAE, Bahrain and Egypt cut their diplomatic relations with Qatar, accus¬ing Doha of supporting Islamist groups and terrorism, a charge Qatar denies. In addition, the states announced the suspension of air, sea and land transport and travel with Qatar. And, with the exception of Egypt, Qatari citizens are required to return home within two weeks. These restrictions, especially the fact that Qatar's land border with Saudi Arabia – its only land crossing – will be suspended, are more severe than those during a previous eight-month dispute in 2014, when Saudi Arabia, the UAE and Bahrain withdrew their ambassadors from Doha over similar accusations. At that time, trade and travel links were maintained. 

In the near term, a military conflict appears unlikely, but a further escalation of economic measures, including actions against Qatari banks (reportedly Saudi and UAE banks have already delayed businesses with them), sanctions or a full-blown embargo, is possible if Qatar does not comply more earnestly with a 2014 agreement which requires it to act seriously against Islamist extremism. Also, Gulf media have aired rumors on a potential future coup against the head of state, Emir Sheikh Tamim bin Hamad Al Thani.

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