2017 Qatar Diplomatic Crisis
Dariya Alton – Article Contributor and Analyst following Qatar
Micah Allison - Article Contributor and Analyst following Qatar
Sydney Scott - Article Contributor, Editor and Team Leader following Qatar
On June 5th, Saudi Arabia, the UAE, Bahrain, and Egypt announced an economic and diplomatic blockade on Qatar. The blockade has resulted in the cessation of all imports and exports between the countries and Qatar, as well as the removal of all Qatari citizens from their land.
The blockade is a result of accusations that the kingdom was supporting terrorism, specifically through its admitted funding of the Muslim
While Qatar argues that the blockade has served as an excellent opportunity to open up trade relations with other countries, financial reports suggest otherwise. Since the blockade was announced, Qatar has reportedly spent 38.5 billion US dollars investing
Potential Business Risks
The economic blockade presents risks to both existing and prospective construction projects in Qatar. The primary risks to the construction sector are materials shortages and transportation costs.
Historically, Qatar has relied almost exclusively on Saudi Arabia and the UAE for
There is an added complication of increased travel costs paired with less frequent flights both in and out of Qatar. Qatari flights are not permitted to fly over Saudi Arabia, and the necessary detour is increasing
Yet, the blockade presents an opportunity for international material companies to increase profit margins. The Qatari demand for materials is high and the supply is low, therefore increasing material prices comes with low risk. This is an opportunity for unlikely partners with Qatar to begin a working relationship.
The diplomatic crisis will continue to contribute to an unstable business environment in Qatar. While the crisis is not expected to escalate to military conflict, businesses should keep the political climate in mind and have a contingency plan to protect investments should the situation escalate. For the time being, businesses will have to seek new trading partners, and absorb the costs of project delays and transportation.