The economic crisis viewed from Qatar

Marc Lynch

Since Brian Katulis is posting here from the UAE and Kuwait on the impact of the global economic crisis on the Gulf, let me just throw in a few observations on the view from Qatar. It's not the main focus of my trip, but it's certainly something which people are talking about.

From what I picked up in my various conversations during a couple days there, the economic crisis doesn't seem to be hitting Qatar as hard as, say, Dubai. Keeping in mind the absolute lack of transparency about such matters, the general view seems to be that Qataris have been conservative investors and benefit from the relative stability of long-term natural gas contracts (as opposed to the volatility of the oil markets). More natural gas production coming on line means more money in official coffers. From what I could tell, they don't seem to be shutting down existing construction projects, and the traffic appears to be as bad as ever.

On the other hand, I heard whispers that Qatar was putting prospective projects on hold -- if something is on the drawing board, it will likely stay there for a while. And more concretely, al-Jazeera's budget is under pressure and its management looking to control costs -- something I never would have thought possible, frankly. Overall, the economic crisis seemed to be hitting Qatar but not really hurting it --"the forecast has gone from sunny to partly cloudy... but not rain and definitely not snow", as one person put it to me. Don't cry for Qatar... it's still pretty rich.

That said, there was a lot of interest among the Arab participants in the conference about the broader strategic effects of the economic crisis. They are all trying to figure out the implications for American power, and intrigued by the prospect of a shift in the global balance of power -- hence the invitation of speakers not only from Turkey and Iran, but also from China. On the other hand, I heard a lot less talk about China and Asian markets than I did when I was in Qatar last year. In private conversations, several expressed concerns that the Gulf might not be able or willing to contribute significant financial backing for the various diplomatic and peace initiatives that the Obama administration presumably wants to pursue. And beyond the Gulf, a number of participants from other Arab countries could only shake their heads at the economic devastation in their countries.

Source: Foreign Policy