Economically speaking, Qatar’s wealth is primarily based on oil and natural gas: this natural richness has boosted Qatari financial power during these years, allowing the country to dare in huge investments all over the world. Its oil and gas reserves account for over the 60 percent of its GDP, and this is the main reason why the country stands for the 48th position in terms of GDP per capita (PPP) worldwide (World Bank, 2015).
According to UNDP’s data, Qatar holds reserves of up to 15 billion barrels of oil and is the world’s third largest holder of natural gas reserves. Regarding exports, Qatar is now the largest natural gas exporter in the world and it has been estimated that Qatar is available to make annually investments for an amount of $30-40 billion.
The country’s economical decisions are regulated by the Qatar Investment Authority (QIA), according with the latest ranking of SWF Institute (2015), the 14th largest sovereign wealth fund worldwide. In the last eight years Qatar has put its priority on business and investments in the Eurozone following two main objectives: on one hand it aimed to safeguard its economy with the gathering of consistent quotas of strategic companies like in the oil and airline field in order to have long term earnings. On the other hand, Doha is also interested in building up a particular status, which is being achieved by acquiring fashion firms and worldwide famous football clubs, such as Paris Saint-Germain FC. Qatari interest for Europe is also motivated by its role in non-traditional areas of socio-economic cooperation, such as technology transfer, sustainable diversification, human capital development and investments.
Qatari economic decisions appear to be deeply linked with its foreign policy, since the Arab State is not only looking for long term assets for its own development, but it is also interested in gaining political influence in some areas, especially the Middle East and North Africa. The financial decisions are taken at élite level by QIA and, from 2013, these are in the hands of the former Emir of Qatar, Sheikh Hamad bin Khalifa Al Thani, who strategically changed the direction of the QIA’s policy with the ultimate aim of playing a key leader role in the stability of the Middle East. During the power vacuum in the area between 2011 and 2013, caused by the Arab Spring, the situation allowed Qatar to build a wide network of relationships with different non-State actors and opponent’s parties, fighting each other at that time. In this way Qatari diplomacy shifted from traditional model to diplomacy of influence, facilitated also by the decline of the State actors, like Egypt and Saudi Arabia.
Qatar welcomed and supported the overthrow of authoritarian regimes, becoming the regional hub for diplomatic and logistic support of the revolutionary forces in Egypt, Libya, Syria and Yemen. Indeed, Qatar orchestrated the Arab League efforts, moving for the United Nations to intervene in Libya; however, its support to opposition groups in Libya, Syria and to the Muslim Brotherhood in Egypt countered directly the soft power advanced by Iran and Hezbollah in the region.
Qatar has a definitely come up with a strong activist foreign policy, which became even stronger and defined since Al Thani presence. Indeed, the Qatari participation in the military intervention in Libya was a clear sign of support of the U.S. alliance and was meant to provide legitimacy also to Europe, in return for guarantees around security, as well as political and economic benefits.
Left aside the interest to the Middle East and North Africa region, Qatar is also increasingly committed to developing bilateral relations with individual EU member States. This is evident in its cooperation with two main countries: France and the United Kingdom, where the major benefits come in the field of security and defense, particularly in the area of arms purchasing.
One feature in the Qatari behavior overall is worth mentioning: Qatari policymakers measure the importance of individual European nations not in terms of membership or nonmembership in the European Union but, differently, on how the partners can contribute to Qatar’s interests in the areas of security, defense and socio-economic development. This perspective is important in order to the Qatar’s evolving relationship with the Eastern Europe countries. Even though currently the majority of members of this group (thirteen out of twenty-four) are not members of the EU, they are becoming essential in Qatari thinking on its engagement with Europe. An example is Russia, which is important because of its being a permanent member of the UN Security Council, one of the major players in the global gas sector and an influential actors in the geopolitics, especially on the Persian Gulf and the Middle East.
Despite the interest for Eastern partners, according to the former Qatari Minister of Foreign Affairs, Khalid bin Mohammad Al Attiyah, the European Union remains “a strategic trade partner” of the Gulf Cooperation Council, noting how the volume of bilateral trade between the two blocs had risen by €38 billion to €138 billion between 2010 and 2014. Qatar is also committed to mantling the fruitful GCC-EU relationships, also in the view of a further expansion of region-to-region cooperation in the field of energy security. Based on this data, Qatar continues to commit itself to support the long-time efforts of the Gulf Cooperation Council to sign a Free Trade Agreement with the European Union and is involved in informal talks with the European Union on this matter, given the suspension of negotiations by the Gulf Cooperation Council in 2008.
Despite the Eurozone financial crisis, the European Union and its member States are still important partners for Qatar, being key stakeholders in the Qatari efforts to achieve socio-economic development through economic diversification. In addition to that, the Eurozone financial crisis has allowed Qatar to become an important variable in regional stability even in Europe. For example, the Arab Spring provided a valid opportunity to re-negotiate the existing regional order in favor of Qatar and the United Arab Emirates.
The Qatar’s commitment to engage with all actors across the ideological spectrum may well be helping to build a new regional security concert, based on inclusiveness and power balance. As regards to investments in European countries, if the trend previously mentioned has been successful for both Europe and Qatar, nowadays the small Gulf country seems to have other priorities. One of them seems sure: Ahmad Al-Sayed, will have the duty to create a more fair and balanced strategy for investments, trying to look also towards the eastern side of the Asian continent, with a particular attention to India and Japan. This change of strategy, which surely has to deal with the sharp falling in the prices of oil and gas, will see a rise in the near future, when Europe will see the reduced commitment of Qatar in its territory. What the aftermath of such a choice will be, will only be revealed in the upcoming years, but Qatar and its holding will always behave like “investment sharks,” even in the Asia-Pacific region.
Federica Mastroforti
Posgraduate Master in Cooperation and Development
References
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