Why Qatar boycott could be a boon for Asian countries
The Saudi-led quartet is not stopping third parties from doing business with Qatar, creating business opportunities – by land, sea and air – from India to Singapore
Asian nations, including India, Pakistan, Sri Lanka, Bangladesh, Indonesia and the Philippines, whose nationals populate the Gulf’s labour force, have already reaped initial benefits with Qatar, eager to put its best foot forward, significantly reforming its controversial kafala or labour sponsorship regime that required workers to receive permission from employers to change jobs or, in some cases, leave the country.
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Qatar recently became the first Gulf state to introduce a minimum wage, albeit criticised by human rights groups for being about US$200 (HK$1,560) a month – well below what labourers can earn in their home countries.
It has also sought to improve workers’ rights and committed to improving their living conditions.
Saudi Arabia and the UAE have so far shown no willingness to compromise on their insistence on unconditional Qatari acceptance, but have also shied away from escalating the dispute by pressuring third parties to choose sides.
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The UAE’s ambassador to Russia, Omar Ghobash, said in June that “there are certain economic sanctions that we can take which are being considered right now. One possibility would be to impose conditions on our own trading partners and say: ‘You want to work with us, then you have got to make a commercial choice’.”
Six months later, the UAE and Saudi Arabia have yet to act on their threat, creating business opportunities as Qatar settles in for the long haul and structurally ensures that it will no longer depend primarily on its neighbours.
With the loss of some 20 destinations as a result of the boycott, state-owned Qatar Airways, the region’s second largest airline, may be the Qatari entity most affected by the crisis. Against the backdrop of a likely annual loss, Qatar Airways is looking to expand its route network elsewhere and weighing stakes in other airlines.
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Similarly, Qatar has had to compensate for its loss of port facilities, primarily in the UAE by diverting to Salalah in Oman and Singapore. While that solved immediate bottlenecks, it is probable that Qatar will take an interest in other Asian ports in competition with Saudi Arabia and the UAE.
Given Saudi interest in China-backed ventures such as Pakistan’s Gwadar and the Maldives, Qatar could well look at Indian alternatives, including the Indian-supported Iranian port of Chabahar, a mere 75km up the coast from Gwadar.
James M. Dorsey is a senior fellow at the S. Rajaratnam School of International Studies and the author of The Turbulent World of Middle East Soccer blog