05 July 2017•Update: 06 July 2017
By and Ahmet Sait Akcay
ANKARA
Qatar has been able to find alternative solutions despite efforts to choke it by some Arab states, an economic expert told Anadolu Agency on Wednesday, who also warned the Gulf crisis must be resolved soon to avoid long-term “costly” impact.
On June 5, Saudi Arabia, Egypt, the United Arab Emirates and Bahrain abruptly cut diplomatic ties with Qatar, accusing Doha of interfering in their domestic affairs and supporting terrorist groups. They also imposed a land, sea and air blockade.
The Qatari government strongly rejected the accusations and termed the blockade as a violation of international law. The four states later presented Qatar with a list of 13 demands -- including the closure of pan-Arab news broadcaster Al Jazeera -- which they said must be met before the embargo is lifted. A 10-day deadline, which expired on Sunday, was given to comply with their list of demands.
The four states later agreed to extend the deadline by an additional 48-hours to midnight Tuesday, and according to Al Jazeera on Wednesday, “Saudi Arabia and its Arab allies said Qatar will receive a reply in due time".
Istanbul Aydin University economics Prof. Sedat Aybar told Anadolu Agency said it was likely that Qatar would be able to cope with the economic damages it suffered during the ongoing Gulf crisis.
“It is more likely that the economic blockade will be proven to be even less effective. Qatar will recover its initial loses while setting up new trade and financial channels to reach new economic balances,” Aybar said.
The professor pointed out that when Saudi Arabia and the U.A.E. closed their food supply routes to Qatar, leading to a food shortage panic in the small country, alternative routes were rapidly introduced; Turkey had an instrumental role in establishing this vital supply line.
“Qatar also secured alternative routes via Iran and other countries for its imports. The situation in Qatar has been stabilized and the expected destructive impact through the consumption channel faded away very quickly,” he added.
Aybar said Iran and Oman were now the new trade channels for Qatar, characterizing them as “new geopolitical alliances”.
He said Oman as an alternative shipment route for Qatar would help secure lower cost imports for the country.
“In the long term if the conflict continues then Qatar might seek to enhance its trade relations with Iran and beyond,” he said.
He also said Qatar found a way to get hold onto its foreign currencies, as it has a solid banking sector that expands beyond its borders.
He said the country also managed to ease the adverse impact of the embargo on inflowing foreign funds due to a large amount of foreign capital in reserves.
“At the outset of the crisis Qatar’s Stock Exchange dropped by 10 percentage points in value but stabilized after that,” he said.
Aybar warned the impact of the embargo in the long run in the region would be “costly” if it was not resolved amicably soon. “The long-term economic implications of the embargo might be very costly for the entire region. Economic balance in the Gulf might be more difficult to achieve if the crisis persists longer,” he said.
