By Annamaria Mazzoni, Ph.D. Candidate of the University of Turin
This contribution briefly analyses the economic and environmental impacts of the blockade imposed on Qatar in June 2017 and contributes to the debate on the effectiveness of economic sanctions as an instrument for foreign policy. In particular, the study highlights how the negative impacts on Qatar’s trade flows were concentrated mainly in the first months after the blockade (short-term), while already towards the end of 2017 new trade routes were opened and new trade relations developed. On the contrary, if we look at the “environmental” implications of the blockade, the numerous programs for increasing the local food production improving the national food security, decreasing the dependence from foreign imports to achieve higher self-sufficiency are potentially detrimental for the water resources of the country. In fact, while this can be seen as a strategic solution if the current situation will become the new status quo for the region, the scarcity of natural resources (land and water), represents a major constraint for the development of an efficient and sustainable agricultural system in the near future. Therefore, in order to study the feasibility of this autarkic response, I also explore the environmental effects of the blockade on the country’s natural resources.
Economic sanctions are common instruments in foreign policy and aim to force the target country to comply with a determinate behaviour. Still, their effectiveness is still debatable and depends on many factors, related to timing, duration, and to both sender and target countries’ financial capability. From my results, it emerges that the anticipated economic harm on Qatar was rapidly recovered by the country, while instead more attention is required in analysing the effects on the natural resources of Qatar, whose exploitation has increased since the blockade as the local food production has largely expanded.
Background on Qatar’s Blockade. On the 5th of June 2017, a coalition of states comprising Bahrain, Egypt, Saudi Arabia and United Arab Emirates (UAE), declared a blockade against Qatar, cutting their diplomatic ties, and closing their air-space, sea and land routes, physically isolating Qatar. The main allegations against Qatar include, among others, the accusation of financial support to terrorism and the close relationship with Iran. A few days after the retaliation, the Saudi-led coalition sent a list of 13 requests for Qatar to comply with in order to have the embargo lifted. Qatar rejected all the demands claiming the requests constitute an attack on the country’s sovereignty. The reasons behind the ongoing dispute can be traced back to the tension between Saudi Arabia and Qatar, as the latter is mainly responsible for following a foreign policy too independent from the Gulf Cooperation Council (GCC) countries' vision. Still, the embargo represents an unprecedented action against Qatar, and up to today the embargo became the status quo. Trade disruption, the creation of new trade routes and the increase of domestic food production were the main results of the blockade and shaped the current geopolitical condition.
Economic Effects of the Blockade. Qatar is a rentier state and its economy mainly relies on the revenues from the oil and natural gas, produced in the offshore North Field and shared with Iran, of which Qatar is also the first’s world exporter. In 2018 the hydrocarbon sectors accounted for around 46% of the GDP and until the blockade, the economic integration among GCC countries was fairly developed. In particular, for what concerns the food sector, Qatar was importing about 90% of its food, and in 2016, about 60% of the food entering into the country was coming through the Saudi border and through the Jebel Ali Port in UAE. After the blockade, all the trade with the boycotting countries was interrupted. My results show that the majority of trade disruption is concentrated on the imports rather than on the exports, as the latter is almost entirely linked to the trade of Liquefied Natural Gas (LNG), whose sales remained solid after the blockade as the majority of contracts include non-boycotting countries.
Conversely, the drop in the imports from boycotting countries ranges up to 90%, but it is counterbalanced by an increase in trade with new partners by 39%. The food categories most impacted by the blockade are dairy, vegetables and animal products. Further analysis also suggests that the import volumes were back to normal by the Q4 of 2017, thanks to alternative trade partners, confirming the fact that the blockade effects on trade were less harmful than expected as the country was able to create new supply chains pretty fast.
Environmental Effects of the Blockade. The impacts of the blockade on Qatar’s trade flow has also highlighted the food-insecurity that the country faces. Given the harsh environment, the lack of arable land and scarce water resources, the development of agricultural practices is quite challenging and the expansion of the food chain mainly relies on securing imports through different food markets. Nonetheless, in the aftermath of the blockade, the Ministry of Municipality and Environment (MME), started to elaborate a plan for Strategic Food Security, aimed at enhancing domestic food production to increase self-sufficiency and increase the ability to overcome future disruptions in the food supply chain. My study reveals, that given the high water requirements for producing food and the water constraints of Qatar, the food strategies of the MME will require to increase the water use for food production of almost three and half times by 2023 compared to 2016, with 9-14% increase to maintain the same strategies up to 2030.
In conclusion, the outcome of my research outline that while the economic effects of the blockade are substantial but concentrated in the short term and mainly on the imports and for some categories of products such dairy and livestock, from a food and water security perspective, the current food strategies put in place by the government are highly water-intensive. Therefore, more careful planning will be needed in planning what to produce (crop selection) and how to produce it (different water sources and more advanced agricultural technologies). Lastly, from a reputation and visibility perspective, it appears instead that the decisions taken by Qatar in terms of foreign and domestic policy during the embargo, helped the state to rule out the blockade and secure the needed support at regional and international level.
