Qatar’s coming of age as a regional powerbroker - Andrew White
Qatar is increasingly adopting a leadership role among Arab states, not just through its astonishing investment, but by bringing its influence and diplomacy to bear in Afghanistan, Libya, Sudan and Syria.
Scattered across a small thumb of land jutting into the Arabian Gulf, the population of Qatar is equivalent in size to that of the city of Coventry – though its 300,000 citizens enjoy a rather higher standard of living than their peers in England's Midlands. According to the CIA World Factbook, the per capita income in Qatar is the world's highest at $102,700, and the Gulf nation also boasts the world's lowest unemployment rate at 0.4 per cent. This wealth is generated almost entirely by Qatar's enormous hydrocarbon reserves, the proceeds from which are channelled through the Qatar Investment Authority (QIA), a sovereign wealth fund worth around $85bn according to recent estimates, and which has displayed a new-found aggression in recent years.
QIA's prime objective is to diversify Qatar's future revenue streams, minimising the risk of over- reliance on energy prices and intertwining the country's future with that of international markets. To that end, Qatar's acquisition of prime London real estate has been relentless since the city emerged as Europe's most active commercial property market at the start of the global financial crisis. It has helped, too, that the British pound has dropped more than 20 per cent since 2007, and in the last few years Qatar has seized the opportunity to pick up square miles of concrete, glass and steel: now on Qatar's books are iconic addresses including Harrods department store, the Shard of Glass building, Chelsea Barracks, the former US embassy in Grosvenor Square, and even a share in the city's Olympic Village. In January this year, QIA agreed to buy the Canary Wharf headquarters of Credit Suisse, Switzerland's second-biggest bank, for around $520m; QIA also holds a 27.7 per cent stake in Songbird, the majority owner of Canary Wharf Group. 'It was like someone had fired a starting gun,' recalls one London-based real estate broker with high-level Qatari clients, of the moment at which the shopping started. 'There were rumours of big deals being done with Middle East money, but to be frank nobody had really given the Qataris much thought up to that point. Then all of a sudden the [Qatari] Government was spending a fortune on big-ticket real estate. They have kept us busy ever since.'
Real estate isn't the only sector into which the Qatari Government has ploughed cash in recent years, and nor is London the only destination for big spenders from Doha. QIA holds significant stakes in Barclays Bank, the London Stock Exchange, and J Sainsbury, among other UK institutions; it also boasts shareholdings in Credit Suisse, Volkswagen, Porsche, Vinci SA, Veolia, and the German rail network, and in March this year upped its stake in French media-to-aerospace conglomerate Lagardère to 12.8 per cent, boosting its position as the largest shareholder in a company that has a market cap of around $4bn. And, of course, Qatar has made a splash in the sports world by winning the right to host the 2022 football World Cup, and buying French football club Paris Saint-Germain. '[The Qataris] are less defensive than the Saudis, and they don't come over with the arrogance of the old Dubai crowd,' says one London-based financier who declined to be named for fear of offending other sovereign clients. 'If they see an asset they want they will chase it, but they won't pay over the odds and they are very aware that it is a buyer's market right now. They are welcomed across Europe.'
About the one thing the Qataris will pay extra for, is discretion. Gulf sovereign spending has long been an opaque endeavour – benevolent dictatorships are not natural champions of transparency – and the brashness with which Dubai went about its business in the early part of the century, was even then considered distasteful by some of the emirate's Gulf neighbours. Gulf rulers don't need their peoples to know how much of the country's hydrocarbon wealth they are spending on overseas objets. Nor do they brag about any bargains they might pick up on their travels: taking advantage of another market's misfortune is one thing, but crowing about it afterwards is to risk poisoning both political and public sentiment abroad.
This sensitivity to how it is perceived by foreign powers also reflects the earnestness with which Qatar is carving a new role for itself on the international stage: the Gulf state is establishing itself as the golden boy of Middle East mediation. Once best known for founding and funding the Al-Jazeera satellite network, the Arab world's answer to CNN, Qatar's ruling family has emerged as a significant regional powerbroker during recent rounds of the internecine conflicts that dog the Middle East. Qatar is a close ally of the US, and is home to one of the largest American air bases in the Gulf. At the same time, it maintains close ties with groups including Hezbollah, Hamas and Fatah; the latter two organisations signed a ceasefire deal in Doha in early February this year. And, last year, a Doha peace forum concluded with the signing of the Darfur Peace Agreement, which brought to an end an eight-year conflict between the Sudanese Government and the rebel Liberation and Justice Movement.
'There are a lot of people who are very negative... This is not the end of the story, this is just the beginning'
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Qatar was the first Arab country to recognise the National Transitional Council as the legitimate Government of Libya, and supplied ground and air support to the international effort to displace Gaddafi, as well as corralling the Arab League into doing the same. The Gulf state flew at least 18 cargo planes packed with assault rifles, rocket-propelled grenade launchers and other small arms, as well as military uniforms and vehicles, into rebel strongholds between April 2011 and the fall of Tripoli; it is estimated that Qatar, in total, provided Libyan rebels with tens of millions of dollars in aid, military training, and more than 20,000 tonnes of weapons. Qatar has since persuaded the Arab League to suspend Syria from its membership, going further than its peers by calling for military intervention against Bashar Al-Assad. And Qatar is also home to the 'political office' of the Taliban, where talks between Afghanistan's past and present administrations have taken place under the watchful eye of the US, and prisoners being held at Guantánamo Bay have agreed to be transferred to Doha as part of a peace plan between America and the Islamist political group. Whether the talks will progress is uncertain – the Taliban in mid-March walked away from negotiations citing US intransigence – but whatever the outcome, Qatar looks set to play a vital long-term role not just in the boardrooms of global multinationals, but in the high-stakes world of Middle East diplomacy.
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Andrew White is a freelance writer and former editor of Arabian Business magazine. He is based in Dubai and can be contacted at mrblanc@gmail.com.