After two months of isolation from the UAE, Saudi Arabia, Bahrain and Egypt over its continued support for those who support extremism and terror, Qatar has failed to see reason. The four brotherly Arab nations have asked Qatar to follow through on its international commitments and undertakings to join the fight against terrorism, and to cease and desist its policies of aiding those who spread sedition across the region. To this end, Qatar has been asked to abide by 13 requests formulated by the anti-terror quartet.
Up to now, Qatar has failed to undertake any real change, and has ignored the consequences of the measures introduced by the quartet when it exercised sovereign rights and closed air and maritime spaces to aircraft and vessels of Qatar. But now, the reality of the consequences of its inactions is evident, and if Doha continues to ignore the quartet’s request for change, there will be irrevocable and long-term, self-inflicted damage to its economy.
Credit rating agency Moody’s Investor Service has changed the outlook across Qatar’s banking system from ‘stable’ to ‘negative’ — reflecting the deteriorating creditworthiness of financial institutions in the country, in view of Doha’s self-imposed isolation. Significantly, the Moody’s downgrade reflects its belief that it will take at least a year for the banks to recover from the effects of these past two months.
But it’s not just the banking sector that’s feeling the heat. Moody’s expects Qatar’s gross domestic product to come in at just 2.4 per cent in 2017 — a significant decline from the rates of 13.3 per cent between 2006 and 2014. Its domestic credit growth is also impacted. Altogether, the net effect is that the intransigence of the government of Qatar and its support for those who spread extremism and terror is hurting all Qataris, who now have less money in their pockets, have less access to loans to build or fund projects, and even when they can access loans, those will be at higher interest rates.
This episode can end any time, but that timing rests solely with Qatar. To do so, it must cease and desist its support for extremists, give concrete assurances and show through its verifiable actions that it has ended its folly, fascination and funding for the voices of extremism. The offices of Kuwait are now working to open a dialogue with Doha for the quartet. Unless Qatar wants to remain in isolation and see its economy continue to self-destruct, it knows what it needs to do.
