Qatar’s flowering relationship with Paris 31, October 2012
Posted by thegulfblog.com in Qatar.Tags: Qatar, Qatar Banlieue investments, Qatar France, Qatar France investments, Qatar investment stratagy, QIA
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The following article appeared in the Financial Times on the 1st November 2012.
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When plans for Qatar to create a €50m euro fund to invest in some of Paris’s poorest suburbs emerged last month, the French political right and left united in disapproval. Marine Le Pen, leader of the far-right National Front, denounced the move as a plot to stoke Islamism in Paris’s Muslim-dominated districts, while the left-leaning Libération railed against the French government allegedly subcontracting its sovereign duties to a Middle Eastern state whose motives were suspect.
Yet the reaction shows a fundamental misunderstanding of the way Qatar operates globally and what it is trying to achieve. The pattern of its international relations shows its investments are geared primarily to three things: profit, security and building a brand that appeals to its western allies despite not being a democracy. The investment in the banlieue – long a scar on France’s social conscience – looks no different.
Part of the suspicion of French commentators stems from the difficulty of evaluating what kind of financial return Qatar could make from such a venture. Simultaneously, Qatar’s well-known support of Islamists in the Arab Spring has spawned far-fetched reports in the French press, quoting military intelligence sources who accuse Doha of supporting pro-Sharia armed militants in Mali.
Yet all this ignores a long record of examples that suggest financial gain is typically foremost in any Doha-backed investment. Such strategy is driven by a desire to bolster the country’s balance sheet and diversify earnings away from oil and gas.
The Qatar Investment Authority, the state’s main international investment vehicle, was established in 2005 to bolster and secure the longer term health of the economy through diversification. Subsequently, it has earned a reputation as a successful, thirsty investor with a particular eye for bargains and blue-chip companies.
Image in the west is also an important element of Qatari ventures overseas, whether backing Libyan rebels or building the Shard, London and Europe’s tallest building.
Since the mid-1990s, Qatar has been trying to present itself as a business-savvy, culturally-sophisticated and forward-thinking country, differentiating itself from other Gulf city-states such as Abu Dhabi, Dubai and Manama. Doha’s heavy investment in international art and education facilities, conferences and big sporting events such as the World Cup are all part of building the brand of Qatar™.
A third strand in Qatar’s financial strategy is linked to its core security concerns. It has seen Kuwait invaded in 1990, a deepening crisis over Iran and often acrimonious relations with Saudi Arabia – all of which mean it needs its western allies.
While Doha already has the US security umbrella and various agreements with France and the UK, it has been steadily building these relationships, particularly with London, over the past few years. Tens of billions of pounds of investment in London, not to mention supplying a vast proportion of the UK’s gas requirement, guarantees Qatar an appointment at Downing Street whenever it wishes. Doha has also made a series of important acquisitions in France and buys up to 80 per cent of its military material from the republic.
Although there is no document setting out Qatar’s strategy, it is apparent from – and only possible because of – the concentration of power in the hands of a tiny number of decision-makers who are related and share a vision of country’s future. While Hamad Bin Khalifah Al Thani, the emir, remains in broad strategic control, Tamim Bin Hamad Al Thani, the crown prince, is increasingly active and is behind several recent sporting ventures, including the acquisition of Paris St Germain football club. Hamad Bin Jassem Al Thani, prime minister and foreign minister, is the key player in the Qatar Investment Authority, while Sheikha Moza, the emir’s second wife, is the guiding force behind the social and educationally-focused Qatar Foundation. Sheikha Mayassa, the emir and Moza’s daughter, is in charge of museums and art projects.
The Paris banlieue project contains elements of all the imperatives that have driven Qatar’s international investment spree so far. The fund may prove to be a successful micro-lending facility from which Doha will gain financially in the longer term. Its charitable and social focus also help Qatar look good and while the plan has its roots in the Sarkozy presidency, that it continues under President Hollande reinforces the flowering bilateral relationship between Paris and Doha.
Fear of Qatari motives seems unwarranted in this case. Doha’s slowly liberalising rulers prize their key western allies above all else. They would be loathe to see what – for them – is a tiny deal financially jeopardise goals that they have been aiming at for many years now.
On Kuwait on Chinese radio 29, October 2012
Posted by thegulfblog.com in Kuwait.Tags: Kuwait, Kuwait discussion, Kuwait election, Kuwait election discussion
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If you have a spare hour and are so inclined here is a link to some interesting discussions on Kuwait with myself, Kristian Coates Ulrichsen – @Dr_Ulrichsen – and James Rae.
On Qatar and Hamas in Gaza 26, October 2012
Posted by thegulfblog.com in Iran, Israeli-Palestinian Conflict, Qatar.Tags: Arab Spring Qatar Iran, Brotherhood banana, Gaza, Hamas, Iran Qatar, Iranian influence, Qatar, Qatar Hamas
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The following article appeared on ForeignPolicy.com
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A deeply contrarian streak has taken hold in Qatar these days. Insulated by U.S. security guarantees, eager to use its burgeoning fiscal reserves, and propelled by its elites’ reformist zeal, Doha continues to exert a disproportionate influence on regional politics. Emir Hamad bin Khalifah Al Thani’s latest move was a dramatic visit to the Gaza Strip, becoming the first head of state to visit the Palestinian territory since Hamas wrested control of it in 2007.
Unlike some of its less imaginative Arab rivals, Qatar saw Hamas’s regional isolation as an opportunity rather than a problem. Despite its alliance with the United States, Doha has been nurturing its ties with the Palestinian Islamist group for some time: Its worst kept secret is that Khaled Meshal, Hamas’s leader, has had a house there for many years and has been increasingly seen in Doha since Hamas was forced to leave Syria in early 2012. Doha has also opened its pocketbook to Hamas, pledging $250 million in February — a gift that was increased to $400 million upon the emir’s visit.
The injection of funds, however, is not the most important aspect of Sheikh Hamad’s trip. By breaking Hamas’s regional isolation and explicitly recognizing its rule over Gaza, Doha has strengthened the militant group’s hand against its Palestinian rivals. An official from the Palestinian Authority, which is in charge of the West Bank, begrudgingly welcomed the visit while noting that “no one should deal with Gaza as a separate entity from the Palestinian territories and from the Palestinian Authority.”
Unlike the Palestinian Authority, Israel felt no need to soften its criticism. An Israeli spokesman carped bitterly about the emir’s trip, saying that the emir was “throwing peace under a bus.”
The visit further highlights Israel’s loss of influence with Qatar. Relations between the two countries warmed with the opening of an Israeli trade office in Doha in 1996 (reputedly close to Meshal’s house) as the two sides looked to ship Qatari gas to Israel, with Enron acting as the intermediary. The deal failed, however, and relations ebbed and flowed until December 2008, when Qatar cut ties in protest of Israel’s offensive against Hamas in the Gaza Strip. Rumors that Doha was attempting to restart relations were finally put to rest with a leaked memo from Israel’s Foreign Ministry labelling Qatar as a “leading activist” against Israel, decisively cutting whatever informal relations remained.
The Iranian angle
Iran, with whom Qatar maintains cordial official relations, joins Israel and the Palestinian Authority in an unlikely triumvirate watching proceedings in Gaza with glum resignation. Tehran officials are doubtlessly looking back nostalgically to happier times only a few years back, when their proxy Hezbollah all but defeated the Zionist Entity — winning Iran no small degree of Arab support for its material support to the Lebanese militant organization.Back then, Hamas was also still ensconced in Iran’s camp, and Syria was a stable ally that appeared to be gradually increasing its influence in the Middle East.
Indeed, while Israel and the Palestinian Authority may view Qatar’s embrace of Hamas with chagrin, it is Iran that is the central loser in this drama. The emir’s visit is part of a larger Qatari policy to unseat and reorient crucial Iranian allies around the Middle East — and by extension, amputate a long-used, effective limb of Iranian foreign policy. This is a remarkably forthright policy, for Iran will not — and cannot — take it lying down.
This new policy is most evident in Syria, where Qatar is explicitly and unashamedly supporting the 19-month insurgency with money, equipment, and at the very least light weaponry — little less than a declaration of war against President Bashar al-Assad, Iran’s core ally.
But Qatar’s new activism is also apparent in Gaza, where Doha has likely decided to take action precisely because of Hamas’s break from Iran. When Tehran stopped sending money to Hamas after the group failed to publically support Iran’s embattled ally in Syria, Qatar saw an opportunity to split the Palestinian group from its long-time sponsor. While its $400 million donation is earmarked for humanitarian development, not only is such support fungible, but there are doubtless other financial arrangements being made between Qatar and Hamas on this trip — further strengthening the ties between the Palestinian Islamist movement and Doha.
This move will, of course, catalyze another round of speculation that Qatar is supporting the rise of the Muslim Brotherhood across the Arab world. That Qatar’s supports the Brotherhood is not in doubt — indeed, it hardly tries to conceal its efforts at engaging with the Islamist movement in Egypt, Tunisia, Libya, Syria and now with Hamas, another Brotherhood offshoot. Yet Qatar is not nefariously trying to replace the Shia Crescent with a Brotherhood Banana, curving from Syria through Gaza, Egypt, and on to Libya and Tunisia. Doha is much more pragmatic and less Machiavellian than that: It is leveraging its relations where they exist, and looking to bolster popular, effective, moderate Muslim parties with whom it has relations.
Qatar’s vanguard role in weakening a key plank of Iranian foreign policy indicates that Doha must feel deeply secure with its relationship with Tehran, for it would hardly undertake such aggressive moves if it felt imminently threatened. Indeed, there is an obvious flashpoint between the two regional powers: Qatar and Iran share the world’s largest gas field, which has been responsible forQatar’s recent spike in wealth. Traditionally, this has meant that Qatar treated Iran with a great deal of respect. Relations were carefully improved in the 1990s as the field was being developed, as Doha sought to avoid an escalation after numerous instances of Iran attacking and stealing equipment from unmanned Qatari gas rigs.
Today, Qatar’s relations with Iran are as pleasant as ever on the surface. However, the fact that Qatar is overturning one of the key tenets of its foreign policy by antagonizing Iran is a surprising and forthright move by the Qatari elite, which clearly does not accept conventional limits on what is and what is not possible in the Middle East.
Kuwait enters an uncertain and more violent era 25, October 2012
Posted by thegulfblog.com in Kuwait.Tags: Kuwait, Kuwait corruption, Kuwait opposition, Kuwait parliament, Kuwait protests, Kuwait violence
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The following article appeared on RUSI.org
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Kuwait is heading for a period of unprecedented turbulence; distinct even in Kuwait’s recent history which has seen Parliament dissolved six times in six years and escalating clashes between protestors and police.
A protest held on Sunday 21 October is thought to have been one of the largest ever held in the Gulf State. The opposition claim that over 100,000 people attended, though independent sources note that 40-60,000 is more realistic. Either way, it was a substantial protest. Though parts of the protest were peaceful; there were also clashes with the State’s Special Forces and Police who used tear gas and rubber bullets to disperse the crowds.
A Disputed Election
Tensions between the government and the opposition have been growing for years with increasing acrimony displayed on both sides. February 2012 saw the election of a heavily pro-opposition Parliament. Despite taking 34 of the 50 seats in Parliament the loosely defined opposition demanded nine out of sixteen Cabinet seats. They were offered three and accepted none. Consequently this Parliament argued more and got even less done than its predecessors, who had already set a low bar for accomplishment in the past decade.
Amid the usual acrimony and intransigence, two remarkable decisions in June changed the status quo. First, the Emir constitutionally suspended Parliament for one month, the first time that this had occurred in Kuwait’s history. Then, only two days later, the Constitutional Court annulled the February Parliament on a point of procedure and reinstalled the previous more pro-Government Parliament. This was vociferously denounced by the opposition and they refused to sit in the reconvened 2009 Parliament.
Parliament was dissolved on 7 October and elections called for 1 December. However, Kuwait’s constitution allows the Emir to amend laws when Parliament is not in session. Having threatened of the need to ‘correct mistakes’, on this occasion the Emir asked his Cabinet to adopt three laws including one that changed the voting system to one-man-one vote.
This move enraged the opposition who preferred the previous system where each voter could cast four votes. Though the permutations of this change are yet to be worked through, it is most likely that the opposition groups would lose out and they subsequently announced that they would boycott the elections.
This kind of strategy involves a huge amount of jeopardy. With no opposition running, the Parliament will be pro-Government. The Emiri decree, which needs to be ratified by a sitting Parliament, will likely be strongly upheld. This will institutionalise and legalise the system which the opposition fear will, to a greater degree, disenfranchise them.
Competition for Domestic Support
While there is widespread support for the opposition it is by no means universal. Wavering supporters may well be brought over to the Government’s side if it decides to use a portion of its budget surplus, currently running at nearly $50bn. to increase support through government largess. Debt forgiveness, wage rises, and increased subsidies are a common tactic in Kuwaiti politics and will likely be used again at some stage. Indeed, without the permanent intransigence of the opposition, if the December 2012 Parliament can actually get laws and investment packages passed, then this too will diminish the popular support for the opposition.
Crucially, the fear for Kuwaiti politics as a whole is that the opposition will be left with no tactic or strategy other than confrontation. It is now in the opposition’s best interests to force the Government into as much of an overreaction as possible to maintain support and sympathy. The Government have indicated that they will meet any illegal confrontation head-on, as Sunday’s protests indicate. Additionally, the Government announced a ban on protests of more than twenty people, a move that will strike at long-held principles among many Kuwaitis.
Far from cowed, in response the opposition announced another protest on 11 November and a ‘grand march’ on 1 December; an attempt to undercut the legitimacy of the vote and the Parliament.
Already the political divisions reflect deepening social divisions and these recent events will only worsen the divide. The pro-Government forces see the opposition as deeply obstructionist and resolutely focused on wresting power from their grasp. Both points are true to some degree but the opposition would note that it is only fair that power is shared more equitably given their majority-status and the fact that they have been relatively disenfranchised economically and politically for so long.
Part of this dynamic stems from deep-seated concerns about corruption in the elite, which is seen by the opposition in particular as yet another way that the entrenched elite secretes away more of Kuwait’s money. Aware of this concern, one of the other laws that the Emir asked the Cabinet to adopt referred to the creation of an anti-corruption authority with wide-ranging powers to request financial information from all public employees including Cabinet members, Parliamentarians, and even the Prime Minister. If the Government can establish this institution and instil public confidence in it by making it independent and endowing it with the necessary power and resources, then this could undermine popular support for the opposition.
The Taboo Breaks
Aside from the immediate concerns as to the upcoming political, rhetorical, and literal skirmishes between the opposition and government supporters, the escalation of the opposition in reaction to the Government’s policies has had more profound effects. Previously the Emir was an almost politically untouchable figure. However, this taboo, which had been under pressure for some months if not years, has been thoroughly broken with speeches and marches explicitly criticising his decision to change the electoral law. Any notion that the Emir could remain above the fray is finished. While monarchy as a concept is still resolutely the preferred system, Kuwait is entering a new era. Exactly what this new era will construe is difficult to predict, but it is certain to be more violent as the Kuwaiti elite faces its most significant challenge since the 1990 invasion.
On France and Qatar 24, October 2012
Posted by thegulfblog.com in French IR, Qatar.Tags: Qatar France investments, Qatar investments, Qatar Paris investments
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I spoke on France 24 last night about Qatar’s Gaza trip but I can’t find that so here are a couple of links to me waffling away about Qatar’s not so perfidious investments in France.
The Gulf blog 