Shaking Down The Qataris

There are two key issues that lie at the heart of the recent attempt by the Saudis and the Emiratis to exert power over the State of Qatar. The principal one is at its heart about money and is nothing less than a shakedown. The secondary issue is about power and is tied up with the Qatari succession and the Saudis view of the independence of that state.

I am informed that the dispute started when the Emiratis complained to the Qataris about the level of the charges that the Qataris were levying for the transmission of natural gas from fields in Abu Dhabi to the LNG plant in Qatar. The Qataris refused to reduce the charges.

The larger aspect of this monetary issue is tied up with the current financial position of Saudi Arabia. Saudi Arabia is basically out of money. The new Crown Prince has presented his vision for the economic future of the Kingdom called Vision 2030. It is an extremely ambitious and costly plan and frankly the Kingdom can’t afford it. Their financial problems have been further exacerbated beyond the fall in oil prices by the fact that they are fighting a war or proxy wars against Iran and its allies on three fronts, in Syria, Iraq and the Yemen. The latter which was recklessly entered into by the new Crown Prince Muhammad bin Salman (MBS) has been particularly costly.

MBS and the King view Qatar as a source of money for the Kingdom and the realization of their Vision 2030. They want Qatar to stop spending money on stadiums, London real estate and other foreign investments and instead to invest their surpluses in the Kingdom of Saudi Arabia. Qatar is the richest country in the world per capita with only 330,000 citizens. Saudi Arabia by contrast has been breeding itself into penury. With something approximating 25 million citizens and a political system that is able to maintain stability only through massive state handouts the financial pressures on the ruling family are immense.

The second issue that has troubled the Saudis since 1995 is that of the rulership within the Al Thani family. The Amir Khalifa bin Hamad al Thani was, in the Saudi estimation, tame. He usually toed the Saudi line and Qatar was basically somnolent during his rule. I spent significant amounts of time in Qatar during the 1980s and 1990s and under Sheikh Khalifa very little of any political or economic significance was happening. He was content to pump the Emirate’s heavy crude and salt the money away in Switzerland. That all changed with the palace coup orchestrated by his son Hamad who transformed the country economically and began to steer a course, particularly in foreign policy independent of Saudi wishes. That has continued under his son Tamim who effectively ousted his father in 2013. There is speculation that Hamad still pulls the strings behind the veil but in the eyes of the Saudis the Al Thani Emirate is unstable due to ongoing rivalries in the family.

That Hamad has reason to distrust and hate the Saudis is well established as they worked with Sheikh Khalifa to mount a counter coup after his deposition. That is one reason for Qatar’s tilt towards Iran. In addition, the Qataris are compelled to maintain decent relations with Iran because of the two countries overlapping interest in the gas fields in the Gulf.

In the face of the Saudi, Emirati, Bahraini and Egyptian demands what course does Qatar have open to it both to counter them and to remain independent? Very little as it appears: they could try to turn even closer to Iran but that opens the door to an actual takeover of the country. High level sources of mine in Saudi Arabia have indicated that too far a tilt to Iran by Qatar will result in the same situation that exists in Bahrain. There will be an insertion of Saudi troops into the country and a more pliable member of the Al Thani family put in place. The Qataris should not look to the United States to save them from such a scenario. Al Udeid air base will continue to operate under a Saudi controlled satrapy and Qatar’s attempt to buy good will from the US by its recent announcement of a $12 billion arms purchase from Washington has already been ‘trumped’ by Saudi Arabia.

My contacts also tell me that during the visit that the US signaled to the Saudis that they would support such a course of action against Qatar if necessary. Of course, in his usual inimitable fashion President Trump has sent mixed and confusing signals which the Saudis have clearly interpreted as solid support. The US Senate has muddied the water further when Senator Corker of Tennessee, the Chairman of the Senate Foreign Relations Committee said that he would withhold approval for the arms sales until the dispute is settled.

Given all of these tangled issues the Saudis may well get their way in the end and the Qataris will be forced to cough up some money or at least some promises of investment in Vision 2030 projects in return for Saudi climbing down from some of their more ridiculous demands such as the shuttering of the Al Jazeera new network. But two things are certain, the Saudi denunciation of Qatari support for Islamic extremists in Syria is a risible example of the pot calling the kettle black and that the struggle for paramountcy within Islam and the region between Saudi Arabia and Iran will continue. I expect that this little side show in that struggle will resolve in the Saudis favor.