Gulf Crisis Creates Opportunity for Asian Nations (JMD on Pragati)
Gulf Crisis Creates Opportunity for Asian Nations
The
rift between the Gulf
countries
and Qatar has
created
a space for Asian
countries
to step in to
engage
with the small
peninsular
state.
There’s a silver lining for Asian countries in the
six-month old crisis in the Gulf that pits a UAE-
Saudi-led alliance against Qatar. That is as long
as Saudi Arabia and the United Arab Emirates
shy away from attempting to harness their
financial muscle to shore up lagging
international support for their diplomatic and
economic boycott of the idiosyncratic Gulf state.
Asian nations, including India, Pakistan, Sri
Lanka,
Bangladesh, Indonesia and the Philippines, whose
nationals populate the Gulf’s labour force, have
already reaped initial benefits with Qatar, eager
to
put its best foot forward, significantly
reforming its
Qatar recently became the first Gulf state to
introduce
a minimum wage, albeit criticized by human rights
groups for being at $200 below earning levels in
many of the labour-supplying states. It has also
sought to improve workers’ rights and committed to
improving their living conditions.
Qatar was under pressure to reform the kafala
system long before the Gulf crisis erupted, but the
dispute with its Gulf neighbours strengthened its
interest in being seen to be doing the right thing.
Its moves are over time likely to persuade other
Gulf states to follow suit.
The boycott as a result of its refusal to
accept
UAE-Saudi
demands that would curtail its
independence has forced Qatar to restructure
trade relationships, diversify sources for goods
and services, creative alternative port alliances,
and recalibrate the strategy of its national
carrier,
Qatar Airways.
The UAE, Saudi Arabia, and their allies insist that
Qatar unconditionally break its ties to various
political groups, including the Muslim Brotherhood,
adhere to Saudi and UAE foreign policy, reduce
relations with Iran, shutter the Al Jazeera
television
network, and accept monitoring of its compliance.
Qatar has rejected any infringement of its
sovereignty
and called for a negotiated solution.
The two countries have so far shown no willingness
to
compromise on their insistence on unconditional
Qatari
acceptance, but have also shied away from
escalating the
dispute, by among others pressuring third parties
to
choose sides.
The dispute has further divided the Arab world with
some
countries like Egypt and Bahrain siding with the
UAE and
Saudi Arabia, others like Jordan, Lebanon, Tunisia,
and
Algeria sitting on the side lines and calling for a
negotiated
solution, and finally nations like Oman and Algeria
who have
stepped in to help Qatar offset the impact of the
boycott.
The fracturing of the Arab world was on display
at a
meeting
in
Cairo in mid-November of Arab foreign ministers. Saudi
Arabia was able to wrest a statement condemning
Iran and its
Lebanese ally, Hezbollah, but failed to achieve a
consensus as
Lebanon teetered on the balance because of Saudi
pressure.
Without breaking the stalemate and the initiation
of
negotiations that at best would achieve a face
saving formula
that falls short of a fundamental resolution, the
dispute is likely
to settle in as a fact of life and further
undermine the Gulf
Cooperation Council (GCC) that groups the six Gulf
states. Saudi
Arabia and its allies have said they were not
contemplating
military intervention even if they have sought to
foster tribal
opposition to Qatari emir Sheikh Tamim bin Hamad Al
Thani
led by lesser known members of the ruling family.
suggested in June that “there are certain economic
sanctions that
we can take which are being considered right now.
One possibility
would be to impose conditions on our own trading
partners and
say you want to work with us then you have got to
make a
commercial choice.”
Six months later, the UAE and Saudi Arabia have yet
to act on their
threat, creating business opportunities as Qatar
settles in for the
long haul and structurally ensures that it will no
longer depend
primarily on its Gulf neighbours.
Food is one key area, making food security a Qatari
priority.
Turkey and Iran were quick to step in to
fill the gap created by the
Saudi ban on export to Qatar of dairy and other
products. With the
import of some 4,000 cows, Qatar has sought to achieve a degree
of
self-sufficiency with domestic production within a
matter of months
accounting for approximately 30 percent of
consumption. Nonetheless,
with a minimal food processing industry, Qatar will
seek to diversify
its sources, creating opportunity for Asian
producers.
With the loss of some 20 Gulf destinations as a
result of the boycott,
state-owned Qatar Airways, the region’s second
largest airline, may
be the Qatari entity most affected by the crisis.
Against the backdrop
of a likely annual loss, Qatar Airways is looking
to expand its route
network elsewhere and weighing stakes in other
airlines.
Asia is an obvious target. Qatar is scheduled to
initiate flights to
Canberra in Australia, Chiang Mai and Utapao in
Thailand, and
Chittagong in Bangladesh in the next year. The
airline has rejected
proposals that it bid for Air India, but plans to move ahead with plans
for the launch of a domestic Indian airline.
Elsewhere, Qatar Airways
acquired a 9.61 percent stake in troubled Hong
Kong-based
Cathay Pacific for $662 million.
Similarly, Qatar has had to compensate for its loss
of port facilities,
primarily in the UAE by diverting to Salalah in
Oman and Singapore.
While that solved the Gulf state’s immediate
bottlenecks, it is probable
that Qatar will take an interest in other Asian
ports in competition with
Saudi Arabia and the UAE.
Given Saudi interest in China-backed ventures such
as Pakistan’s
Gwadar and the Maldives, Qatar could well look at
Indian alternatives,
including the Indian-supported Iranian port of
Chabahar, a mere 75
kilometres further up the coat from Gwadar. Singapore
port has stepped
in with Qatar availing itself of shipping and
logistical services. Vietnam
and India see opportunities in the sale of food and
construction materials.
Perhaps most fundamentally, Asian countries like
India, in a bid to ensure
the security of their energy supplies, are looking
at diversifying their
sources and increasing the non-Middle Eastern
portion from producers like
the United States. Indian Oil minister Dharmendra Pradhan adopted
a tough
stand in recent talks with OPEC Secretary General
Sanusi Mohammad
Barkindo, advising him that India was looking at
alternative sourcing. India
recently cut crude oil imports from Iran because of
stalled negotiations over
the development of an offshore gas deposit in the
Gulf, forcing Iran to look
for alternative buyers in Europe.
The Gulf, irrespective of if and how the crisis may
be resolved, is unlikely to
return to the status quo ante. As a result, the
crisis is certain to influence
political, economic and commercial relationships
for decades to come. That
creates opportunity that Asian nations potentially
can capitalize on.
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