The Qatar crisis, economic impact and Turkey's stance

The Qatar crisis, its economic impact and Turkey's stance

The Qatar crisis, which is of particular concern to Turkey, has been occupying the agenda in the past days.

The crisis started with Egypt, the UAE and Bahrain, headed by Saudi Arabia, cutting off diplomatic relations with Qatar.

The announcement by Saudi authorities soon after Donald Trump's visit and the disclosure of the $110 billion arms purchase agreement to the public reveal the picture behind the outbreak of the artificial crisis.

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They accuse Qatar of supporting terrorist organizations and coming closer to Iran’s political line.

However, this is a poor justification. This is because, while the Iranian administration fully supports Bashar al-Assad on the Syria issue, Qatar puts it plainly that it supports the opposition.

While Iran sets its policy on Yemen, Iraq and Syria by highlighting sectarianism, Qatar objects to sectarianism by following a policy like that of Turkey's. Unlike Saudi Arabia, it does not pursue a policy that completely sides against Iran. And it cannot do this, as natural gas reserves, the most important source of its income and wealth, are located on the same basin as Iran. So, it has to be on good terms with Iran one way or another.

In fact, actions made to create a front against Qatar resemble efforts to isolate Turkey from the international community and subdue the country by putting forth the lie that it aids Daesh.

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Qatar is a country with a population of 2 million and is located on a small piece of land, but its economic strength makes it a global player.

It is the richest country in the world with its per capita income (in proportion to purchasing power parity) of $140,000.

It manages a $335 billion sovereign welfare fund, the Qatar Investment Authority (QIA).

It has the third-largest natural gas reserves in the world. As much as 60 percent of its income depends on oil revenues (and 40 percent depends on natural gas).

It has great investments in the U.S., U.K., Germany, Russia and many other countries in a wide range of fields, from finance to advertising, and from real estate to football teams. These investments are behind Germany’s overt support for Qatar in the crisis, following Turkey and Iran.

The Qatari state sponsors Barcelona and owns the Paris Saint-Germain football team.

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Its investments in Turkey are about $18 billion and are rapidly increasing. Relations have especially developed after 2015.

Its annual foreign trade volume is $710 million and it signed a cooperation protocol in Trabzon in December 2016 which was aimed at increasing this figure to $1.5 billion in a short time.

It bought some stakes of Finansbank, ABank, Digiturk, Banvit and Boyner and some real estate properties in various places.

The value of Turkish contractors' construction projects in Qatar reached $14.2 billion. The 2022 FIFA World Cup will be held in Qatar and the Qatari state plans to allocate a budget of $170 billion for the event. Turkish contractors aim to have a share of $15 billion of this.

Also, Gulf countries (mainly Qatari investors) make a significant contribution to closing Turkey’s balance of international payments (around $10 billion) every year.

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In short, the Qatar crisis is of particular concern to Turkish politics and economy.

Providing active support to the Qatari administration, for which efforts are made to exclude, is an appropriate policy option for both our humane and historical mission.

In terms of economy, there is no risk for our country and the reaction of the markets reveals this clearly.

The Republic of Turkey is a part of the Islamic world and it should keep its relations with the parties involved in the Qatar crisis at the highest level – which require it to actively pursue the diplomacy of mediation that it has maintained in good faith.