In 2004, American magazine The Weekly Standard ran an op-ed on Qatar entitled “A Country With No Politics.” A tongue in cheek title (what country has no politics?) it is nevertheless indicative of how far Qatar has come in just seven years.
Back then, Qatar’s politics were most on display in the frequently ire-raising broadcasts of its most famous asset, the state-owned Al Jazeera news network, which managed to antagonize nearly every Middle Eastern government as well as that of the United States. Since then, Qatar has molded itself into a major economic and political player.
First came the mediator role, which helped Doha to usurp the region’s traditional go-between, Saudi Arabia, by attempting to broker a peace deal in Darfur, resolve the border dispute between Eritrea and Djibouti, and the (now failed) Doha Accord in 2008 that brought together the rival Lebanese political camps. A bevy of cash — rumors abound of the millions of dollars Lebanese political leaders were paid to sit down together — and supposed neutrality enabled the Qataris to play the middleman.
If Qatar is seen as neutral — like a Switzerland or Sweden of the Middle East — it is due to the kingdom’s efforts to befriend virtually everyone. Qatar’s foreign policy has been called paradoxical as a result. It hosts a United States air force base, which Doha financed in part, which was instrumental in the US-led invasion of Iraq in 2003; yet then-President of the United States George W. Bush threatened to bomb Al Jazeera’s headquarters in 2004, and earlier this year leaked US embassy cables leaked by Wikileaks revealed that US Secretary of State Hillary Clinton criticized Qatar’s efforts to tackle terrorist financing for militant Sunni groups. On top of this, Qatar inked a defense pact with America’s nemesis, Iran, in 2010.
Doha was involved in conflict mediation in the Horn of Africa, yet Ethiopia broke off diplomatic ties with Qatar in 2008, alleging the Qataris were funding Islamic militant groups in Somalia — including US-designated terrorist organization Al Shebab — that were attacking Ethiopian troops following Addis Ababa’s invasion of the beleaguered East African state in 2006. Qatar said it was “surprised” by Addis Ababa’s decision. And, while having links to Hamas and to Hezbollah, Doha also has diplomatic and economic ties with Israel, having hosted an Israeli consulate until Qatar broke off relations in 2009 during the war on Gaza. Doha tried twice in 2010 to restore diplomatic ties and was rebuffed by Tel Aviv, but the economic ties remain — if perhaps more symbolic than of consequence — with exports to Qatar totaling some $1 million [AED 3.67 million] and imports $1.9 million [AED 6.98 million] in 2010, according to the Manufacturers Association of Israel.
Cultural normalization with the Jewish state is equally apparent, with Israeli conductor Daniel Barenboim’s orchestra giving a private concert for the Qatari elite during the Arab Cultural Capital events in Doha last year (local press coyly referred to the orchestra as “Western musicians”).
Mehran Kamrava, director of the Center for International and Regional Studies at Georgetown University-Qatar, sees Qatari policy, even in its contradictions, as being a product of its size and location: “Qatar’s foreign policy is typical of small states in the sense that it is driven by a survival strategy. It is a small country in a very rough neighborhood; tensions between Iran and the US, and with Saudi Arabia, with whom relations have not been the most friendly, are on the doorstep .”
“I wouldn’t call [Qatar’s] foreign policy paradoxical — creative it might be, but certainly strategically informed,” he added.
Behind this policy is the al-Thani ruling family. “An elite couple of people make the policy and what they say goes,” said David Roberts, deputy director of Britain’s Royal United Services Institute, a defense think tank in Doha. “The emir can pick up the phone and make foreign policy if he wants.”
Qatar shows its colors
Over the past six months Qatar has substantially flexed clout internationally, including beating global competition to win the bid to host the 2022 World Cup, and in March made arguably its boldest foreign policy moves. On March 18, Qatar sent troops to join the Gulf Cooperation Council’s efforts to “restore law and order” in Bahrain following an uprising that started against the ruling family in mid-February. Just 10 days later, Qatar became the first Arab country to recognize the legitimacy of the Libyan rebel movement when it inked an agreement to market and distribute oil from Eastern Libya. The next day Qatar signed up to be part of the air strikes against Muammar al-Qadhafi’s regime.
As a result, Qatar threw to the wind a $2 billion [AED 7.35 billion] joint investment fund launched in 2007 between the Libyan Investment Authority and the Qatar Investment Authority (QIA), along with further investments of $8 billion in Libya announced in 2008 and 2009. “This is a leadership that is not risk averse,” said Kamrava. “They took a risk by entering an agreement with the Libyan rebels, and it remains to be seen how the events in Libya turn out. It could be a very popular thing, siding with people’s aspirations in the Middle East and North Africa (MENA) and a popular position to take.” If there is a paradox in Qatar’s foreign policy it is most evident in its response to revolts in the Middle East — helping to fight an authoritarian regime in Libya and having stoked support for other Arab uprisings through Al Jazeera on one hand, while propping up another regime in Bahrain on the other.
“Qatar hasn’t directly participated in (military) actions in Bahrain, but as a part of the GCC and done in [the Council’s] name, it undermines Qatar’s support for Libya. It is leading the international campaign while hoping no one will ask questions about tacit support for intervention against democracy in Bahrain and such contradictions,” said Kristian Coates Ulrichsen, a research fellow specializing in the GCC at the London School of Economics (LSE) global governance program. “The perception in other (Arab) countries is that Al Jazeera is controlled by the al-Thani family. Even if not true [the sentiment] is there and could come back to bite Qatar if there is any blowback.”
He added that: “Qatar has made many enemies by covering revolutions and fanning revolutionary fervor, in Libya and Egypt, and works on the premise not to cover Qatar, yet what if something happened there? Would Al Jazeera cover it? I doubt it. If something were to happen I suspect Qatar would have very few friends that would come to its defense, over the perception Al Jazeera has been playing a role in messing with the affairs [of other regimes].”
Yet, while Al Jazeera may be an asset that has made Qatar enemies, the country’s colossal gas and oil reserves play an important role in ensuring its security.
LNG masters of the universe
Despite having the world’s third largest gas reserves, Qatar came later to the hydrocarbons game than any of its regional competitors, due to the fact that the technology needed to extract gas from the depths of the North Field only became commercially viable in the 1990s.
The country has since put an estimated $137 billion [AED 503.23 billion] into developing the North Field and associated projects, increased natural gas output more than five times over since 1995, and reached a new benchmark last year of 77 million tons a year of liquefied natural gas (LNG) once a total of 14 LNG ‘mega train’ production facilities became operational. Coming later to the game has had advantages for Qatar in developing an energy policy that has been to its benefit rather than weighted in favor of international oil companies (IOCs), as was the case in the early years of oil development in Saudi Arabia, Nigeria, Iran and elsewhere.
Qatar took inspiration from Saudi Arabia’s state-owned mega oil company Aramco, which, once nationalized in 1980, developed oil terminals and established a shipping subsidiary with 27 oil tankers. Qatar has gone further than Riyadh, however, by creating an integrated LNG value chain in conjunction with IOCs, which has made it the world’s largest exporter and trans-shipper of LNG, supplying 23 countries.
It has stakes through state-owned Qatargas and Rasgas in gas production, liquefaction through the gas trains developed at Ras Laffan, transportation through its 70 LNG ships, and has jointly financed LNG receiving and re-gasification terminals in consumer countries. In 2009, the South Hook LNG terminal opened in Wales, which provides 15 percent of Britain’s gas, and soon after the Adriatic LNG terminal started providing 10 percent of Italy’s natural gas needs. In April, the Golden Pass LNG terminal opened in Texas and is slated to provide gas to 10 million American homes each year. A fourth international terminal is to be developed, with Qatar inking an agreement with Argentina this year.
The development of such terminals have tied countries into long-term agreements — ranging from three to 25 years — with Qatar for LNG, a policy it has adopted with Asia, which accounted for 57 percent of LNG exports in 2009, with South Korea the top importer, followed by India, China and Japan. Conversely, European markets, including Belgium, Britain and Spain, imported 33 percent of Qatari LNG in 2009, according to the US Energy Information Administration (EIA). Such moves ensure profitability throughout the length of the value chain while causing others to be energy dependent on Qatar. “Locking countries into long term agreements is one of cleverest things they’ve done and a good way to ensure long term security and to have strong leverage,” said Ulrichsen.
Britain, the former colonial power until 1971, is particularly tied to Doha. The relationship will only grow stronger, as by 2025 Qatar is slated to provide 50 percent of Britain’s LNG. Furthermore, the British-Dutch oil major Shell has sunk an estimated $21 billion [AED 77.14 billion] into Qatar, its biggest investment in one single country; America’s ExxonMobil has invested $16 billion [AED 58.77 billion].
“If you look at Qatar supplying Britain with 15 percent, if not more, of its gas needs, then that ties Britain to Qatar,” said Roberts. “If something catastrophic happened to Qatar, it would certainly get Britain’s attention. There are definitely geo-political considerations in addition to the investment.”
Qatar has also made a firm friend in Japan, exporting 7.63 million tons in 2010, and following the earthquake that ravaged the country earlier this year bolstered LNG exports by 4 million tons to become Japan’s fourth largest gas supplier. Although Japan does not have the military reach to protect Qatar, it would bring diplomatic clout and financial assistance in the event of conflict, as happened during the 1991 Gulf War, with Tokyo contributing $12 billion [AED 44.1 billion] to finance the war, the third largest supplier of funds after Saudi Arabia and Kuwait, in order to ensure energy supplies kept flowing from the Gulf.
“When your foreign policy is guided wholly or in part by commercial or economic relations, you cannot rule out Asia. But if there is a tilt towards East Asia it would not be at the expense of the West,” said Kamrava, noting that security interests maintain the Western outlook of the kingdom.
The balance of gas
This position is reflected in Qatar’s locking up of export destinations to ensure that it has friends in the right places. For instance, the price of LNG in the US is $4.41 [AED 16.2] per million metric British thermal unit (mmbtu), whereas in Europe it is $9.55/mmbtu and in Asia $13/mmbtu as of Executive going to print. In essence, Qatar is paying for its security by shipping lower priced LNG to Europe and the US while extracting its most profitable sales in Asian markets — a somewhat similar “deal” Saudi Arabia has with the US in exporting oil at lower transportation costs and with strategic tax breaks in the US.
“The East can never replace the West’s commitment to Qatari security,” noted Ulrichsen. Getting the export balancing act right has been critical to Qatar; when Doha agreed to ship over the next 12 months an extra 60 cargo loads of LNG to Japan, concerns were initially raised in the markets that LNG would be diverted away from Europe.
Qatar now has the extra capacity to meet demand, however, which has effectively turned the country into a swing supplier of LNG in much the way Saudi Arabia is for oil; a strong global position to hold as LNG demand grows in the coming decades. But while such energy agreements ensure Qatar’s is protected internationally, in the Gulf it is a policy that could have rather different ramifications, with a unified natural gas pipeline in the GCC still not in place despite years of planning.
“Qatar has been prioritizing long term agreements at the expense of GCC states as they all have gas shortages, and this could be a bone of contention,” said Ulrichsen.
Furthermore, Qatar’s North Field borders Iran’s South Pars field, which Tehran has not been able to profit from to the same degree as Qatar due to international sanctions on the technology needed for extraction. Iranian officials estimate that more than $200 billion [AED 734.65] is needed to bring development up-to-speed. Qatar’s aggressive development of its side of the field raises concerns for Iran of draining the reserves. To stave off a potential crisis, Qatar declared a moratorium on North Field development from 2005 until 2014 to assess the impact of increased production.
“As Qatar moves ahead and Iran doesn’t, this could generate a feeling of mistrust. Kuwait and Iran have never been able to agree on the maritime boundaries of their gas fields. Just because [Qatar and Iran have an] agreement doesn’t mean [that] it will always be the case,” said Ulrichsen.
Qatar’s bold foreign policy moves this year have ushered in a new era for the country on the world stage. How they will pay off in the medium-to-long run will depend on the success of its role in Libya, and how Doha plays its hand in the Gulf. LNG energy dependency will buy Qatar friends but Doha will also have to play an increasingly precarious balancing act keeping everyone happy — a task further complicated in a region undergoing profound political and social change.
How Qatar will steer through such choppy waters in the years to come is likely only to become more audacious, and perhaps paradoxical, as its rapidly expanding international clout powers its foreign policy strategy.