The longer the Gulf crisis lasts, the higher the stakes get

A Qatari LNG vessel / Source: Nakhilat

By James M. Dorsey

Saudi Arabia and the UAE appear to be contemplating engineering a military coup in Qatar with the stakes in the Gulf crisis so high that a negotiated solution may prove difficult, if not impossible.

Neither side in the Gulf divide can afford to back down or be seen to have failed in achieving its objectives.

Caving in to Saudi and UAE demands that it break its ties to Islamists and militants and curb, if not shutter, Qatar-funded media like Al Jazeera, would amount to Qatar surrendering its ability to chart its own course, and like Bahrain becoming a Saudi vassal.

Bahrain has been walking in step with the kingdom since Saudi Arabia and the UAE with Qatari support helped its minority Sunni Muslim ruling family brutally squash a popular uprising in 2011.

Similarly, neither Saudi Arabia nor the UAE can tolerate a repeat of 2014 when Qatar appeared to put on public display the limits of their power by refusing to bow to the two states’ demands after they and Bahrain withdrew their ambassadors from Doha.

Saudi Arabia and the UAE have this time raised the stakes by not only breaking off diplomatic relations but also declaring an economic embargo. The longer tiny Qatar with a citizenry of only 300,000 people resists Saudi and UAE pressure, the more embarrassing it is for the two Gulf states.

Amid indications that Qatar may have the political will and economic backbone despite the economic obstacles and commercial losses to hold out for some time to come, Saudi Arabia and the UAE will likely look for ways to increase pressure on the recalcitrant Gulf state.

Increased economic pressure could involve the withdrawal of Gulf deposits from Qatari banks, the closure of a partly UAE-owned pipeline that pumps Qatari gas to the UAE and Oman, and pressure on other Muslim states like Malaysia, Indonesia and Pakistan to join them in taking punitive economic measures.

The majority of Muslim and non-Muslim nations, except for the economically dependent six nations, including Bahrain, Egypt, the Maldives and Mauritania, who joined Saudi Arabia and the UAE in acting against Qatar have sought to remain on the side lines of the dispute. States like Pakistan and Bangladesh are, however, vulnerable because they rely to a significant extent on migrant workers’ remittances in the Gulf for their foreign currency reserves.

US President Donald J. Trump has come closest among outside powers to endorsing the Saudi-UAE-led action, but even he has so far refrained from turning words into deeds that would exert real pressure on Qatar.

Turkey and Iran are helping Qatar meet its food and water needs after Saudi Arabia closed the two countries’ land border, preventing one third of the Gulf state’s food and water imports from reaching it. Turkey, moreover, is sending troops to Qatar, which is home to the largest US military base in the Middle East, a possible reason why the US has not gone beyond words in its support for the Saudi-UAE campaign.

Prime Minister Haider al-Abadi of predominantly Shiite Iraq appeared to also come to Qatar’s defense by countering some of the allegations that the Gulf state had funded militants. Mr. Al-Abadi told Shiite militias, according to Al Jazeera and other Qatar-controlled media, that a ransom paid by Qatar for the release of 26 members of its ruling family who were kidnapped in December 2015 while hunting in Iraq remained in Iraq’s central bank. News reports suggested that the ransom had been paid to Syrian militants and Iraqi security officials and was one straw that broke the Saudi and UAE camel’s back.

Oman, one of two Gulf states to have refrained from joining the Saudi-UAE campaign, has opened its ports to Qatari shipping that no longer can access key Saudi and UAE ports. Qatar maintains its access to international shipping lanes and can refuel its LNG vessels at alternative ports, including Singapore.

The UAE, with Qatar’s ability to retain its energy exports, its main source of revenue, undeterred would be damaging itself if it closed the partly Abu Dhabi pipeline from Qatar that supplies Dubai with 40 percent of its natural gas requirement.

International ratings agency Standard & Poor (S&P) reported that Qatari banks were strong enough to survive a withdrawal of all Gulf deposits plus a quarter of the remaining foreign funds the banks keep.

Deposits and other funding sources from Gulf countries represent about eight percent of total liabilities of Qatari lenders or $20 billion, S&P said. It said that in a worst-case scenario, only two lenders of Qatar’s 18 lenders would have to dip into their investment securities portfolio.

Failure to force Qatar on its knees any time soon would force Saudi Arabia and the UAE to look at other ways of forcing Qatar to comply, including regime change, either by invading the tiny Gulf state or engineering an internal coup.

UAE state minister for foreign affairs Anwar Gargash insisted last week that the Saudi-UAE campaign was “not about regime change -- this is about change of policy, change of approach."

Saudi and UAE media reports nonetheless suggest that the Gulf states may be gunning for a coup given that unlike in the case of Bahrain and the Saudi-led intervention in Yemen in 2015, the legitimate, internationally recognized government of Qatar is unlikely to seek their military assistance.

In the latest episode of the Gulf  media war, Saudi Arabia’s Jeddah-based Arab News, in the clearest sign yet that, the kingdom and the UAE were fishing in Qatari Emir Sheikh Tamim’s military backyard, this week published an interview with retired General Mahmoud Mansour, an Egyptian military officer whom Saudi and Egyptian media described as the father of Qatari intelligence.

General Mansour has long been on the war path against Sheikh Tamim, and his father, Hamad bin Khalifa Al Thani, who abdicated as emir in 2013. General Mansour asserted that Sheikh Hamad and his long-standing prime minister, Sheikh Hamad bin Jassim bin Jaber bin Mohammed bin Thani Al Thani, had attempted to foment unrest across the globe in the Gulf, the Middle East, Africa, Asia, and Russia.

Speaking separately to Al Arabiya, the Saudi tv network established to counter Al Jazeera, General Mansour accused Qatar of aiding and abetting Iranian efforts to penetrate the Arab world. “Iran needed to penetrate some Arab countries, needed an Arab force to introduce them more and more within the Arab fabric, so it addressed her intentions through the friend who lost their mind, Qatar,” General Mansour said.

UAE newspapers reported earlier that a little-known member of Qatar’s ruling family, Sheikh Saud bin Nasser Al-Thani, who lives in Europe was forming an opposition party in exile.

Despite criticism of the emir, Qataris largely appeared to be rallying around the government in rejection of the effort to force their country to surrender its ability to graft its own policies.

It was not clear whether General Mansour maintains close contacts within the Qatari military and intelligence community.

An effort to replace Sheikh Tamim with a member of the ruling family more amenable to Saudi policies would not be the first time the kingdom has tried to influence who rules Qatar. In a gesture to former Saudi King Abdullah, Sheikh Hamad pardoned in 2010 a group of Saudis for their involvement in an attempted coup to overthrow him in 1996.

Qatar by holding out against Saudi Arabia and the UAE and garnering international support for a negotiated solution to the crisis is raising the stakes in what increasingly amounts to a risky poker game. Both the kingdom and the emirates feel emboldened and believe they need to strike while the iron is hot.

Dr. James M. Dorsey is a senior fellow at the S. Rajaratnam School of International Studies, co-director of the University of Würzburg’s Institute for Fan Culture, and the author of The Turbulent World of Middle East Soccer blog, a book with the same title, Comparative Political Transitions between Southeast Asia and the Middle East and North Africa, co-authored with Dr. Teresita Cruz-Del Rosario and three forthcoming books, Shifting Sands, Essays on Sports and Politics in the Middle East and North Africa as well as Creating Frankenstein: The Saudi Export of Ultra-conservatism and China and the Middle East: Venturing into the Maelstrom.