The Gulf blog

“Qatar’s increasing international profile” 20, July 2009

This article appeared in the Kuwait Times on 17/07/09

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Qatar’s increasing international profile

David B Roberts

Qatar’s $10bn bid for a stake in German luxury car manufacturer Porsche is but the latest in a series of high-profile purchases and policies undertaken by the small Gulf state. These range from the acquisition of blue-chip Western companies, multinational mediation, promotion of sporting events to the creation of Al Jazeera.

Firstly, Qatar are spending money to make money. Taking advantage of their cash-rich economy at a time of global downturn means that there are bargains to be had. For sure, Porsche is in a highly competitive industry but it has one of the strongest luxury brands in the business and it already owns around 70% of Volkswagen so, in some ways, Qatar would be getting two icons of European motoring for the price of one.

Yet, Qatar is also attracted to such deals because it further increases their profile on the international map.

Since the mid-1990s, Qatar has engaged in wide-ranging mediation efforts throughout the Middle East and beyond in, for example, Yemen, Western Sahara and Darfur. Additionally, Qatar has been deeply involved in negotiations with Hamas, Fatah, Hezbollah, and the Lebanese and Palestinian Authorities. Indeed, it received much acclaim for its role in settling the simmering conflict between the Lebanese factions in 2008.

Such actions are important in two particular ways. First, they act as advertising for Qatar as a whole, increasing its exposure throughout the region. The more interaction that Qatar can foster between its officials and officials of other states, according to theories of commerce, the better the chances of future interaction, be this in terms of investment, tendering contracts or seeking other services. Secondly, it is beneficial for Qatar if it can present itself as a state which consistently seeks to promote and find peace. Not only may such a state appeal more to, say, an investment banker considering moving to the Middle East, but it may well aid Qatar’s security, for it is surely more difficult to attack a state that is primarily known for fostering peace.

In terms of investments, Qatar’s $60bn sovereign wealth fund has bought stakes in Barclays Bank, Credit Suisse, the London Stock Exchange as well as high-end property developments in London such as the $970 million Chelsea Barracks and buying 80% of what will be London’s tallest and newest skyscraper, the $3.2bn Shard of Glass. Such dealings diversify Qatar’s vulnerabilities in international gas markets, its main source of international currency, and can act as shrewd investments. Also, by seeking to invest in some of the bluest of blue-chip businesses, Qatar is seeking to promote its name as a highly professional business partner capable of dealing at the top table of international finance.

It is, however, in sporting events and the world of media that Qatar’s name is being publicized the most. The 2006 Asian Games was the first big sporting event held in Qatar. Today, Doha hosts various top level tennis, golf and motor-racing events, will host the 2011 Indoor Olympics and has made bids to host the 2016 Olympics and the 2022 Football World Cup. Such events increase Qatar’s international profile and, along with, for example, Qatar Airways, spread Qatar’s brand further afield.

The creation of Al Jazeera in the early 1990s is, in many ways, representative of Qatar as a whole. The first goal of any TV station is to increase people’s awareness of it and to build up a following. This is essentially what Qatar as a country is trying to do. Al Jazeera was also groundbreaking in Middle Eastern media. Its progressive platform, where people would debate previously unheard of topics on TV, became something of a sensation. So too is Qatar erring on the side of progression and modernization. Women have the vote and can stand for office, levels of education are high at unfettered Western institutions, there have been mixed attempts to establish free media watchdogs and Qatar has sought – again with mixed results – to unilaterally reinstate contacts with Israel, much to the anger of its regional neighbors.

Indeed, Qatar’s Israel policy and particularly Al Jazeera’s critical stance towards other Arab countries has fermented countless international issues for Qatar. Formal complaints have been lodged on numerous occasions and Ambassadors have been withdrawn by virtually all Arab countries at what they see as Al Jazeera’s harsh coverage of all issues except domestic Qatari ones. Yet, whilst Qatar has sought to mend broken fences in recent years, it is not primarily aiming at promoting itself towards Arab countries.

It must not be forgotten that Qatar is a small country with a tiny indigenous population sandwiched between vastly larger and more powerful historical enemies. Therefore, it encouraged the US military to base itself in Doha to act as a tacit deterrent. However, in Qatar’s not so distant past, various allies – superpowers at the time – came and went, leaving Qatar scrambling for a new alliance. Qatar, therefore, through its modernization and its relatively free media, is angling itself Westward as a hedge against future concerns. Furthermore, by selling large amounts of Liquefied Natural Gas to the UK and to Spain, not to mention Japan, South Korea and India, it is further increasing its powerful allies further afield.

Furthermore, in the ever more competitive and globalised world every country is searching for foreign investment and skilled professionals. Indeed, Dubai, Bahrain and Abu Dhabi are in just such a battle. Therefore, whatever Qatar can do to increase its chances at getting that extra dollar or extra engineer, it must. Be this by making itself attractive to a would-be employer by promoting contacts or having a moderate, modernizing outlook, or by making itself attractive for would-be investors by proving its business-savvy credentials.

Crucially, Qatar, like every country, is seeking to secure itself from any threats. Whether these threats stem from real security-related issues or from economic worries, Qatar is seeking to answer these concerns by – at the most basic level – seeking to make friends and influence them.