Gulf crisis: 7 countries cut off ties with Qatar, 7 lakh Indians could be hit

HT Correspondent, Hindustan Times, Dubai | By
Jun 06, 2017 04:26 PM IST

The Arab world’s strongest powers cut ties with Qatar over alleged support for Islamists, re-opening a wound two weeks after US President Donald Trump’s demand for Muslim states to fight terror.

Seven countries, led by Saudi Arabia and Bahrain, on Monday severed ties with Qatars, accusing it of backing terrorism and opening up a rift among some of the most powerful Arab states that could have repercussions for the Indian economy and expatriates.

A man walks past Qatar Airways office in Manama, Bahrain, on June 5.(REUTERS)
A man walks past Qatar Airways office in Manama, Bahrain, on June 5.(REUTERS)

Bahrain was the first to snap ties, followed by Saudi Arabia, the United Arab Emirates, Egypt, Yemen, Libya and the Maldives. They accused Qatar of backing groups such as al-Qaeda, Islamic State and the Muslim Brotherhood and pushing policies that were destabilising the region.

Qatar denied the accusations and expressed “regret and utter surprise” at the coordinated move by the countries that are key players in OPEC and the Gulf Cooperation Council (GCC). The foreign ministry criticised the “unjustified measures” and said there was a “smear campaign” to harm Qatar.

As Saudi Arabia closed its borders and snapped land, air and sea links, residents rushed to supermarkets to stock up on food, Doha News reported. People stocked up on water, milk, meat and rice and photographs of empty shelves in stores circulated on social media, though Qatar’s foreign ministry said the border closing would not affect normal life.

Qatar is home to an estimated 700,000 Indians – whose remittances in 2015 were worth $3.98 billion – and sources said there was “no panic” in the expatriate community. “People are stocking up but there’s nothing to worry about,” a source said.

Indian authorities were keeping a close watch on food supplies and flights in and out Doha against the backdrop of increasing enquiries from Indian nationals about the situation. The sources said they did not expect the spat to last long as such a situation would not benefit Qatar.

“A similar spat in 2014 was settled in nine months but at that time, only diplomats were withdrawn and borders were not sealed. Qatar gets most of its supplies from Saudi Arabia and it wouldn’t make sense to prolong this row,” a source said.

Map of the Middle East showing countries which have severed diplomatic relations with Qatar. (AFP)
Map of the Middle East showing countries which have severed diplomatic relations with Qatar. (AFP)

However, other sources acknowledged a prolonged crisis could have an impact as Qatar is completely dependent on Saudi Arabia and the UAE for food and other essential supplies.

In New Delhi, external affairs minister Sushma Swaraj said the government was ascertaining the impact of the spat on Indians. “There is no challenge arising out of this for us. This is an internal matter of GCC. Our only concern is about Indians there. We are trying to find out if any Indians are stuck there,” she told reporters.

The spat threatens the prestige of Qatar, which hosts a large US military base and is set to host the 2022 World Cup. Several countries gave Qatari diplomats and nationals between 48 hours and two weeks to leave their soil. Qatar’s envoy to Egypt was also told to leave in two days.

Several airlines, including Etihad Airways, Emirates and Flydubai, said they would cancel flights to and from Doha from Tuesday. The Arab states also closed their airspace to Qatar Airways, which suspended all its flights to Saudi Arabia. The Saudi-led coalition fighting Yemen’s Houthi rebels also expelled Qatar.

Qatar is important to India. Here’s why
$18bn Size of annual bilateral trade between two countries
700,000 The approximate number of Indians in Qatar
  • Qatar is the largest supplier of LNG to India: It exports 15% of its output, which constitutes 65% of India’s global LNG imports
  • India also imports ethylene, propylene, ammonia, urea and polyethylene from Qatar.
  • India is the third largest export destination for Qatar (behind Japan and South Korea)
  • On Qatar’s imports list, India ranks 10th
Indian companies in Qatar: L&T; Punj Lloyd; Shapoorji Palonji; Voltas; Simplex; TCS; Wipro; MahindraTech; HCL
Indian banks in Qatar: SBI, ICICI among others
14 Number of CBSE schools in Qatar with 30,000 students

Qatar’s stock market index sank 7.5% with some its top blue chips hardest hit. Oil prices rose after the moves against Qatar, the largest supplier of liquefied natural gas (LNG) and a major seller of condensate, a low-density liquid fuel and refining product derived from natural gas.

Reza Nourani, chairman of Iran’s union of exporters of agricultural products, said food can be exported by sea to Qatar, which relies on food trucked in from Saudi Arabia across its sole land border crossing. He said food shipments from Iran could reach Qatar in 12 hours.

The current spat had its genesis in reports by Qatar’s official news agency in late May that purportedly said the Emir, Tamim bin Hamad al-Thani, had criticised the US, offered backing for Iran, reaffirmed support for Hamas and the Muslim Brotherhood and described Qatar-Israel relations as “good”. Tweets from the news agency’s official handle also said Qatar was withdrawing its ambassadors from Saudi Arabia, Bahrain, Egypt and the UAE.

Qatari officials later denied these reports and said the news agency’s website and Twitter account had been hacked.

On Monday, Saudi Arabia said in a statement through its SPA state news agency that Qatar “embraces multiple terrorist and sectarian groups aimed at disturbing stability in the region, including the Muslim Brotherhood, ISIS (Islamic State) and al-Qaeda”.

The statement added, “Qatar has also supported the activities of the Iranian-backed terrorist groups in the Qatif province of Saudi Arabia and in neighboring Kingdom of Bahrain. It has also financed, adopted and is harboring extremists who seek to destabilise unity at home and abroad.”

Iran, long at odds with Saudi Arabia, blamed US President Donald Trump for setting the stage during his recent trip to Riyadh. Foreign minister Mohammad Javad Zarif urged Qatar and its neighbours to engage in dialogue to resolve their dispute.

This April 2014 file photo shows the empty main terminal building of the Hamad International Airport (HIA) in Doha, Qatar. (AP)
This April 2014 file photo shows the empty main terminal building of the Hamad International Airport (HIA) in Doha, Qatar. (AP)

“Neighbours are permanent; geography can’t be changed. Coercion is never the solution. Dialogue is imperative, especially during blessed Ramadan,” Zarif tweeted. He and his Turkish counterpart, Mevlut Cavusoglu, discussed the developments in a phone conversation.

US secretary of state Rex Tillerson told reporters in Sydney that the spat would not affect the fight against Islamist militants and that Washington has encouraged its Gulf allies to resolve their differences.

Turkey called for dialogue and said it was ready to help defuse the row. “There could be problems between the countries but dialogue must prevail in all circumstances,” said Cavusoglu.

The diplomatic rift might cost Qatar and its neighbours billions of dollars by slowing trade and investment and making it more expensive for the region to borrow money as it grapples with low oil prices.

However, with an estimated $335 billion of assets in its sovereign wealth fund, Qatar looks able to avoid an economic crisis over the decision by Saudi Arabia, Egypt, the United Arab Emirates and Bahrain to cut air, sea and land transport links.

The tiny state’s newly expanded port facilities mean it can continue LNG exports that earned it a trade surplus of $2.7 billion in April, and import by sea goods that used to come over its land border.

(with agency inputs)

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