A 'CRISISFREE' QATAR REMAINS IMPERATIVE FOR INDIA'S ECONOMIC GROWTH

Spotlight By ASHOK SAJJANHAR

Qatar

Qatar is the largest supplier of Liquefi ed Natural Gas (LNG) to India, accounting for over 65 percent of India’s global import and 15 percent of Qatar’s export of LNG

Introduction

The Persian Gulf region was shaken by a massive political earthquake on June 5, 2017 when four Arab countries – Saudi Arabia, United Arab Emirates (UAE), Bahrain and Egypt – announced that they were severing all political, economic and diplomatic links with Qatar, a member of the Gulf Cooperation Council (GCC). The four countries were soon joined by Libya, Yemen and even the tiny Maldives. However, Kuwait and Oman, the remaining two members of the GCC, refused to follow the lead of Saudi Arabia in this regard.

Saudi Arabia said that it took the decision because of Qatar’s “embrace of various terrorist and sectarian groups including the Muslim Brotherhood, al-Qaeda, the Islamic State of Iraq and Syria (ISIS) and groups supported by Iran, aimed at destabilising the region.” Qatar has vehemently denied that it supported terrorist groups and maintains that the blockade was an attempt to undermine its sovereignty. It argued that it has assisted the United States in the War on Terror and in the ongoing military intervention against ISIS.

Tensions between Qatar and its Arab neighbours had been brewing for some time and have grown in recent years as part of a tussle for regional leadership. Qatar, buoyed by its huge earnings from the production and export of gas, has been trying to carve out a comparatively independent foreign policy that is at variance with the approach of Saudi Arabia and other major Arab nations. Qatar's infl uential television channel Al Jazeera, which is extensively viewed in the region and beyond, often adopts positions that are critical of Saudi Arabia. In April 2017, Qatar was involved in a deal with militants in Iraq and Syria to secure the return of 26 Qatari hostages, including royals. What apparently outraged Saudi Arabia and UAE was the large amount of about $1billion paid by Qatar to secure the deal. Subsequently on May 27, Qatar’s Emir called up Iranian President Hassan Rouhani to congratulate him on his re-election. The call was seen as a clear, public defi ance of Saudi Arabia’s efforts to create a united front against Iran, which it perceives as an implacable foe.

Russia, Turkey, Iran, France and Germany supported an early and peaceful resolution of the dispute. The US position appeared to be confused and somewhat unhelpful. It appeared quite plausible that King Salman of Saudi Arabia was emboldened to take this step by virtue of the strong support he received from US President Donald Trump during the latter's visit to Riyadh on May 20, 2017.

As expected, Qatar refused to make its regional and international policies subservient to those of Saudi Arabia and other Gulf countries. The move by Saudi Arabia and its collaborators proved to be counter-productive and contributed to increasing the clout of Iran and Turkey in the region. The United States tried to get pro-actively engaged to seek early closure on the issue. It is in US’s interest to ensure that the confrontation does not get further exacerbated and ends quickly as Qatar hosts the Al Udeid air base, the largest US base in the Middle East, which accommodates 100 aircraft and 10,000 military personnel belonging to the US Central Command.

Qatar is dependent on imports by land and sea for basic needs of its population of 2.7 million. About 40 percent of its food came in through the land border with Saudi Arabia. Initially, supermarket shelves in Doha were emptied of basic supplies as residents rushed to stock up but the hoarding quickly ended after Turkey and Iran began sending food by air and sea. The Doha International Airport has been far quieter than usual. Qatar Airways, the national carrier, had to cancel fl ights to 18 regional cities and reroute those to other destinations because of airspace restrictions. Qatar's stock market lost about 10 percent or about $15bn in market value over the fi rst four weeks of the crisis. However, the stock market subsequently recovered 6 percent of its precrisis value. Exports of liquefi ed natural gas have also not been affected.

On 22 June 2017, a list of 13 wide-ranging demands were made on Qatar insisting that Doha must cut back on its relations with Iran; end its ties with the Muslim Brotherhood and shut down a number of news sites. Qatar was told that it must accept the demands within ten days for the blockade to be lifted. Qatar termed the demands as ‘not realistic and unacceptable’.

Doha said it would not negotiate with its neighbours to resolve the Gulf dispute unless they fi rst lifted the trade and travel boycott. It has also declared that there are a number of demands it would never meet, including shutting down Al Jazeera. Subsequently on 18 July 2017, the 13 demands were whittled down to six basic principles. Qatar would need to agree to these for negotiations to end the impasse. These include stopping all support to terrorism; prohibiting all acts to incite hatred and violence; refraining from interfering in internal affairs of the States; confronting all forms of extremism and terrorism etc.

The Qatar Crisis and India

These developments are likely to have significant implications for India, given that its citizens make up the largest expatriate group in the region. Prime Minister Narendra Modi's government has strengthened India’s ties with Saudi Arabia, Iran, UAE, Qatar, Israel and other countries in West Asia.

There are around seven million people of Indian origin working in the Middle East. Security and stability in the region is hence of paramount importance for India. Further, the Indian Diaspora in the region remits around $40 billion a year. These funds help India manage its current account defi cit. Energy is another critical area of engagement. A fi fth of India’s oil, and about 65 percent of gas imports, come from countries of the Middle East including Iran, Qatar, Iraq, Saudi Arabia and others.

External Affairs Minister Sushma Swaraj, speaking on 5 June 2017 even as developments in the Gulf were unfolding, asserted that this is an intra-GCC affair and will not have a signifi cant impact on India or on Indians resident in that country or in the region. This appears to be a somewhat simplistic reading of the situation. Or possibly, the full dimensions of the issue were not clear at the beginning of the crisis.

Travel for Indians to Qatar was not affected as fl ights from India take the Persian Gulf route to Doha. Diffi culties are, however, being experienced by Indian residents in Qatar and wishing to travel to other Gulf countries or those residents in other Gulf nations wanting to visit Qatar.

Qatar is the largest supplier of Liquefi ed Natural Gas (LNG) to India, accounting for over 65 percent of India’s global import and 15 percent of Qatar’s export of LNG. Petronet LNG had declared that it did not expect any impact on gas supplies from Qatar. Petronet is India's biggest gas importer and buys 8.5 million tonnes of LNG from Qatar a year under a long-term contract. It also buys additional volumes from Qatar under spot deals. If tensions were to rise in the Persian Gulf, shipments of LNG could become risky. And in case the crisis gets prolonged, prices of food items and essential commodities in Qatar could increase and affect the lives of around 700,000 Indians. This could also affect remittances. A prolonged crisis could result in increased insecurity, reduced economic activity and stress on the 50 percent or so of the total inward remittances that India receives from the Gulf.

Any confrontation, uncertainty or tension in Qatar or the wider Gulf region can have serious adverse implications for India. Beyond a point, India cannot stay aloof. Given the range, expanse and depth of India’s interests and its rapidly expanding political, economic and strategic profi le, sooner or later India will have to get more vigorously engaged in dealing with developments in this crucial region. It will be mutually benefi cial for the region as well as for India if it were to adopt a more hands-on policy in any security crisis or economic upheaval that may strike the region because its own security, economic well-being, and energy needs are closely interlinked. India enjoys good relations with all countries of the region. That should facilitate India playing a pro-active and signifi cant role in the foresaid countries.

Conclusion

A stalemate has ensued over the last seven months since the crisis erupted. For the time being, the four Arab countries appear to have failed to cow down Doha in spite of the massive attack on all fronts. This has become one more of the several already existing trouble spots in the region including Syria, Yemen, Lebanon, Palestine, Iran, Iraq and others. Increased instability and uncertainty is not good for either the region or the world or India. Resolution of this standoff however appears nowhere in sight.

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Diplomatist Magazine was launched in October of 1996 as the signature magazine of L.B. Associates (Pvt) Ltd, a contract publishing house based in Noida, a satellite town of New Delhi, India, the National Capital.

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