From property to politics, Qatar is a global power

Ten years ago, it was a largely overlooked Gulf state, but now all eyes are on Qatar

By Jane Kinninmont  /  The Guardian

Sat, Feb 09, 2013 - Page 9

Sometimes, it seems that all stories now connect to Qatar. Last week, it was British soccer player David Beckham signing for the super-rich club Paris Saint-Germain, owned by the Qatar Investment Authority. Earlier last month, it was revealed that al-Jazeera, the hugely powerful Qatari broadcaster, was launching in the US, where it was once known as “terror TV.” Why has this tiny Persian Gulf state — the richest country in the world per capita, largely thanks to natural gas — become so active, so attention-grabbing?

Of course, there is an element of the state doing what any person would do who suddenly came into fabulous wealth — shopping on a major scale. Some people go to Harrods; the Qataris buy the shop.

However, there are also clear strategies behind Qatar’s high-profile investments and its broader foreign-policy activism, which has made it a key player in the Arab Spring and beyond. The priority is to secure the country — and the continuation of the monarchy — from potential threats. Second, as its confidence grows, the royal elite is seeking to play a bigger role on the regional stage. It wants to write itself into the history of the Middle East at a time of huge historical importance.

The most straightforward reason for these overseas investments is to diversify the economy. More than half of GDP, and 70 percent of the government’s revenue, comes from gas exports. These should last a long time: Qatar’s reserves are the third-largest in the world, after Iran and Russia, and its population is far tinier. (Wealth is heavily concentrated among the estimated 250,000 citizens; about four times as many immigrants do much of the mundane work.)

However, there are still risks. Even before the gas runs out, the US’ shale gas revolution and Australia’s growing gas exports could bring down prices, and technological innovations could post further unforeseen risks. Qatar has also learned from the experiences of other Gulf countries, which have seen growth slump — and dissent rise — when oil prices have fallen. Smartly, Qatar is investing a good deal of its money in human capital — education, scientific research, training, art, films.

While some of their investments are about straightforward economic returns, others are about country-branding. In London, the Shard skyscraper, mostly Qatari-owned, brings dramatic visibility. In Paris, by contrast, millions of euros go into economic regeneration in the banlieux, likely to earn the gratitude of many unemployed youth, often from Arab Muslim countries of North Africa where Qatar has a growing influence.

What is more, by making themselves useful sources of capital at a time of low growth in the West, the Qataris are also taking out insurance policies with powerful allies who regard them as important for the stability not only of the Middle East, but of Western economies. If the ruling Al Thani dynasty were ever to face the kind of threats that Kuwait faced in 1990, larger global players would have a major stake in their survival.

Qatar has been the last of the six Gulf monarchies to come into such wealth. Just over a decade ago, it was seen as a backwater. Bankers recall the difficulty Qatar’s state companies faced in getting anyone to lend them money. Expatriates who went there were seen as rather eccentric. However, between 1998 and 2008, world gas prices tripled and the new Qatar was born.

Its use of wealth is a case study in soft power and the acquisition of influence. Al-Jazeera now wins global accolades for its cutting-edge coverage of the Arab Spring. It has been the only Arab broadcaster to make serious inroads with Western audiences, challenging the stereotype that globalization must mean Westernization. The shirts of Barcelona FC, a team that for years accepted no sponsorship, now boast the logo of Qatar Foundation, an organization headed by the emir’s wife, Sheikha Mozah.

This branding helps the country attract talented people to develop its economy and train its nationals; Qatar Foundation has brought top US universities, such as Georgetown, plus the UK’s University College London, to establish local campuses.

It is also a matter of investing in patriotism. The country is just 42 years old and only finalized its borders in 2001. On the country’s annual National Day, Qataris emblazon their SUVs with pictures of the king, prime minister, crown prince and Sheikha Mozah.

Since politics is highly personalized and power heavily concentrated, Qatar’s Western allies are also heavily invested in the continuation of these specific powerholders. Western allies are confident that Qatar will not face Arab Spring-style protests, the natives having become so wealthy under the current emir. There are dissidents and the country’s effort to position itself as a backer of the Arab Spring and a haven for free speech has taken a knock with the recent life imprisonment of a poet who criticized the emir. However, mass street protests are unlikely.

The UK is particularly close to Qatar, which now supplies around half of the natural gas it uses. This means the UK has a huge stake in Qatar’s political stability, and its main security backer is the US, which has a large air base in Qatar. While Kuwait has historically been wary of Iraq, and Bahrain of Iran, Qatar has looked nervously toward its vast neighbor, Saudi Arabia. The two countries have largely repaired relations, but questions still remain. Qatar also keeps a wary eye on Iran, with which it shares the world’s largest gas field.

However, while Qatar’s behavior is still shaped by the traditional politics of protection, it is now playing more and more of a role outside its borders. Where it was once focused on soft power, mediation and bet-hedging, it is focusing more and more on hard power, interventionism and taking sides.

Its strong backing for the Arab uprisings has gradually turned into an apparent alignment with particular Islamist factions. In Egypt and Tunisia, it has provided economic support for the newly elected governments. It has provided aid and Qatar would argue it is backing popular, legitimate forces. However, opposition groups, particularly liberals and secularists, worry that Gulf money is tipping the delicate political balance in these nascent democracies against them. In Libya, where it sent planes, Qatar’s backing for Islamists has proven particularly unpopular.

Qatar previously demonstrated a great ability to be friends with all sides in the region; while Doha, the capital, was almost a second home for Hamas leader Khaled Meshaal, it also hosted a visit by Israeli President Shimon Peres, despite officially not recognizing Israel. A few years ago, Qatari mediation ended a political crisis between Hezbollah and its opponents in Lebanon, helped by the links it had built up with Syrian President Bashar al-Assad. Today, Qatar is the leading advocate of military intervention against Assad’s regime and is at the forefront of supporting the opposition, whose new coalition was formed in Doha in November last year, confirming that this increasingly confident tiny country is not yet afraid of over-reaching itself.