BGA Cable: Qatar update

The pressure intensifies 

The escalation of the conflict between Saudi Arabia, UAE, Bahrain and Egypt on one hand and the Gulf state of Qatar on the other, has been ratcheted up as the former submitted 13 demands to Qatar to be complied with within 10 days (by 2 July, 2017), which was then extended by 48 hours, following the meeting in Cairo of the Saudi coalition foreign ministers. This meeting, although is being held with the same anti-Qatar coalition hardline views, is very likely to be temepered, nonetheless by the intervention of the German Foreign Minister Sigmar Gabriel during his visit to the main protaganists over the last couple of days and by the reported telephone conversations that President Trump has had with King Salman of Saudi and Sheik Al Thani, the ruler of Qatar. In our view, this is unlikely to effect the overall outcome of the confrontation, but the diplomatic means, tools, and mechanisms with which the bulk of these demands will be introduced to preserve the main elements of Qatari sovereignty, a point that was specifically underlined by Minister Gabriel.

The deadline itself is of less significance than the demands. Whereas the date can be extended, the demands, in our view, represent the accumulation of a 20-year build up of resentments against Qatar’s regional policies, particularly regarding support for the Muslim Brotherhood, close relations with Iran, terrorism financing, and Al Jazeera TV’s coverage of the affairs of the Arab states. The Qataris have now submitted a draft written response to the main mediator, the Amir of Kuwait. It seems safe to assume that the main thrust of the response is to indirectly reject the demands by effectively requesting an almost identical set of measures to be applied to members of the Saudi coalition, for example, all Gulf States should downgrade their relationships with Iran if Qatar is to do the same. 

Contact BGA to read the full cable.

Our Associates are closely monitoring developments so we can keep you updated on the Middle East and their potential implications for financial markets.  Contact us to schedule a call with our experts to hear our more detailed views.  

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