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High Stakes Poker in the Gulf

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James M. Dorsey is a Senior Fellow at the S. Rajaratnam School of International Studies and Co-Director of the University of Würzburg’s Institute for Fan Culture.

 

The stakes in an unprecedented rift in the Arabian Peninsula could not be higher. They range from Qatar’s future ability to act independently and the uncertain fate of the six-nation Gulf Cooperation Council (GGC), to the fundament upon which international relations are built and the role of small states within that structure.

How the Gulf crisis is resolved will constitute a watershed that is likely to shape the balance of power in the Middle East and North Africa, as well as significantly impact the way states do business with one another.

The crisis in the Gulf also shines a spotlight on key issues that governments have long sought to keep in the dark, whilst complicating efforts to combat political violence, advance greater accountability and transparency, and ensure the protection of basic human rights. It makes it more difficult to perpetuate the tacit understanding to obscure the inability of the international community to agree on a definition of what constitutes terrorism and basic human rights; and it also lays bare the long-muddled distinction between national security and the survival of regimes—whether autocratic or democratically elected.

There can be little doubt that the diplomatic and economic boycott of Qatar imposed in early June 2017 by an alliance of financially and economically dependent states, led by Saudi Arabia and the United Arab Emirates, was intended to put the idio­syncratic Gulf state on a leash.

A list of 13 demands put forward by the Riyadh-led alliance—subsequently rejected by Qatar—aims to impose a vision of the Middle East and North Africa dominated by Saudi Arabia and the UAE.

In order to do so, the two states need to ensure the adherence of others to their definitions of national security and terrorism, which includes non-violent groups advocating alternative systems of government that they view as a threat to the survival of their regimes, as well as those calling for the respect of basic rights like freedom of the press and freedom of expression. That need is enhanced by the fact that longstanding American efforts to get GCC members to agree on a common threat perception in the Gulf have so far failed.

The Saudi-UAE effort was bolstered five weeks into the crisis with the leaking to CNN of the full text of secret agreements between Saudi Arabia, the UAE, Bahrain, and Kuwait, concluded in 2014, putting to an end an earlier diplomatic embargo of Qatar by Saudi Arabia, the UAE, and Bahrain. The leaked documents left little doubt that Qatar had violated them. Qatari actions at the time of the signing of the agreements, however, made clear even before the ink was dry that Doha had no intention of being bullied into accepting a policy dictate and would, at best, take minimal steps to implement the accord. Qatari implementation of the 2014 agreements, which cover the same ground as the Saudi-UAE-led alliance’s current demands, is one of its conditions for ending the ongoing crisis.

The irony of the power struggle in the Gulf is that it involves, in more than one way, the pot blaming the kettle. The battle pits autocracies against one another. None of the protagonists advocates a more liberal system of government for its own people. “Our neighbors see change—those advocating for it and those reporting on it—as a threat, and they are quick to label anyone who opposes their governments as a ‘terrorist’,” said Qatari Foreign Minister Sheikh Mohammed bin Abdulrahman Al Thani. Al Thani is not wrong, but he omitted a key detail: Qatar’s attitude towards its domestic critics and independent domestic reporting of the state’s affairs is no different from that of its Gulf detractors.

In fact, measuring with two yardsticks is a principle adopted by all parties to the dispute in the Gulf. The Saudi-UAE demands ignore the fact that some of Qatar’s attitudes towards political Islam, as well as more militant groups, were approaches adopted for decades by Saudi Arabia and its other detractors.

For instance, Saudi Arabia and the UAE have long supported the Muslim Brotherhood. Decades ago, when members of the group were forced into exile through a crackdown by then Egyptian President Gamal Abdel Nasser, they were welcomed in the Gulf due to a perception that Nasser’s Arab nationalism was a threat to absolute monarchical rule in the Gulf. Saudi Arabia, moreover, has over the years supported militant groups in countries like Pakistan and Bosnia and Herzegovina that served its geopolitical ambitions, as well as in Syria, together with Qatar.

Beyond the fact that the Muslim Brotherhood is only proscribed in Saudi Arabia, the UAE, and Egypt, and not by international, American, or EU law, it is also a legally active organization in some of some states that are amongst Qatar’s detractors, like Bahrain and Jordan. While there is little doubt that offshoots of the Brotherhood have employed political violence to achieve their goals, the group itself is perceived as a threat by Gulf autocrats, because it advocates an alternative, republican form of Islamic government.

Saudi Arabia and the UAE have not attempted to prove that the Brotherhood advocates violence. As a result, the targeting of the Brotherhood raises the question of whether demands for greater pluralism; more transparent, competitive politics; and freer public debate constitute a threat to national security defined as a threat to territorial integrity, or issues such as economic, energy, environmental, and military security.

Similarly, Saudi Arabia and the UAE have tinkered with their demands since the Gulf crisis erupted in early June, to suit their geopolitical designs. Hamas, a Muslim Brotherhood offshoot that controls the Gaza Strip, was taken off the two states’ list of terrorist organizations to accommodate the possible return to Palestine of a UAE-backed Palestinian politician and former security chief who aims to become Palestine’s next leader.

Ironically, Saudi Arabia was heavily criticized in 2002, less than a year after 9/11, for a tele-marathon on state-run television that raised millions of dollars for Palestinian groups, including Hamas.
Saudi Arabia, together with one of Jordan’s main financial institutions, the Arab Bank, at the time stood accused of funding terrorism. Saudi Arabia has since faced multiple allegations that its four-decade-long global funding of Sunni Muslim ultra-conservatism fostered environments that enable militancy.

The overall point is that differences in the Gulf are rooted in the histories of their independence, and different visions of how to ensure regime survival, concepts of national security that are defined by geography, and strategies to build soft power as part of foreign and defense policy. While the Saudi and Emirati regimes see their survival in the brutal repression of dissent and absolute control, at home as well as across the region, Qatar maintains a naïve belief that support for alternative, more liberal forms of government and political Islam will shield its ruling family from pressure to also embrace political change.

The bullying of small states by big states has long been a fixture of international relations. However, the Saudi-UAE effort takes the attempt to impose policies to new heights. The demands tabled by the Riyadh and Abu Dhabi-led alliance against Doha involve the kind of reshaping of policies and curtailing of sovereignty normally imposed by an occupying force. If successful, the diplomatic and economic vanquishing of Qatar would serve as a (useful) precedent for global powers like China and Russia, not to mention the Trump Administration. It would legitimize tendencies already displayed by Moscow, which, in effect, continues to adhere to the Soviet-era Brezhnev doctrine of “limited sovereignty” within its sphere of influence, as well as those displayed by Beijing in the maritime context of the South China Sea.

 

A Mixed Bag

The Saudi-UAE effort to whip Qatar into line is merely the latest episode in the two states’ successful rolling back of the achievements of the popular Arab revolts of 2011. Saudi Arabia viewed the exercise of popular will that toppled the leaders of Tunisia, Egypt, Libya, and Yemen, as well as threatened regimes in Bahrain and Syria, as a mortal threat to the survival of its own ruling family.

In the various battles to restore autocratic rule that had removed dictators who had been in power for decades, Saudi Arabia and the UAE found themselves at opposite ends from Qatar, which ultimately failed in its effort to support newly emerging political leaders and promote political Islam, the most organized force to arise from the revolts.

The Saudi-UAE bid nonetheless produced mixed results—with the advancement of democracy in Tunisia being the exception that proves the rule. Libya and Yemen disintegrated into civil war: a debilitating Saudi military intervention has pushed the latter country to the abyss; the brutal suppression of the revolt in Bahrain has turned the island state into a powder keg that could erupt at any moment.

Saudi and UAE funding of a protest movement in Egypt that paved the way for a coup in 2013 by general-turned-president Abdel Fattah Al-Sisi was emulated a year later by Russian moves to prevent Ukraine from signing an association agreement with the European Union. Similarly, South Korea felt the heat in 2016 when Chinese state-owned companies refrained from doing business with the East Asian state and Chinese tourists avoided the country in protest against the deployment of an American anti-missile shield. Saudi and UAE media reports suggest that, despite official denials, an attempt to change the regime in Qatar may constitute the ultimate arrow in the two states’ quiver.

The Gulf crisis has already sparked debate in small states, particularly those in Asia within China’s orbit, on the degree to which they can resist being forced into straightjackets. Qatari resistance—bolstered by huge energy export revenues, a network of relationships that were built on the back of those exports, sympathy for the underdog, and Saudi Arabia’s perennially tarnished image as an ultra-conservative kingdom that exports an ideology conducive to extremism—has emboldened those who argue that small states need not be sheep.

“The lesson learnt is that, at the end of the day, a small country must develop the capacity to defend itself. It cannot depend on others to do so,” said prominent Singaporean diplomat Tommy Koh. The question that arises, added Singapore ambassador-at-large and Executive Deputy Chairman of the S. Rajaratnam School of International Studies, Ong Keng Yong, is what happens when small states’ core interests are impinged upon, and caught within broader big-power dynamics. Or do small states’ interests not matter, and should be subordinated to that of big states? Putting it another way, must Singapore be so governed by fears of offending bigger states that we allow them to do what they want or shape our actions to placate them even if they affect our national interests? [...] There is no choice but to stand up. Doing otherwise will encourage more pressure from those bigger than ourselves.

Singapore’s conclusions are lessons that Qatar is already drawing with the boycott forcing it to diversify its suppliers of essential goods and services, expand the network of ports its vessels can call on, and enhance its ability to produce at least some basic items like dairy products. Cornelia Meyer, an economist and energy expert, described Qatar’s strategy as “hunker down, let’s make sure we can feed people, [and] let’s make sure we can still export LNG.”

In a twist of irony, Saudi Arabia and the UAE have strengthened Qatar’s ability to resist and also weakened their chances of garnering widespread support by formulating demands that were outlandish, like their insistence on the shuttering of media outlets like Al Jazeera; measuring with two yardsticks, as in the case of their opposition to NATO member Turkey’s military base in Qatar, while the UAE hosts similar British and French facilities; anchoring their demands regarding the fight against extremism in Saudi and UAE law rather international law; and the fact that many in the international community believe that Saudi Arabia ignored the maxim that people in glass houses should not throw stones.

 

Little Learned

S audi Arabia and the UAE appear to have learned little from their failure to marshal widespread support for their boycott campaign among Muslim and non-Muslim countries alike. If anything, Omar Ghobash, the UAE’s articulate ambassador to Russia, suggested that the two states may risk weakening their position  in a potential effort to force the kingdom’s and the Emirates’ trading partners to choose between doing business with them and dealing with Qatar. It would be a choice many cannot afford to make, and would likely reject as a matter of principle. Global energy companies signaled their intent by ignoring Ghorbash’s suggestion when they met with Emir Sheikh Tamim bin Hamad Al-Thani of Qatar to discuss increasing Doha’s LNG output by 30 percent.

Nonetheless, Muslim nations in Asia would be most vulnerable to a more forceful Saudi-UAE campaign against Qatar that would force them to align themselves with the two Gulf states. Countries like Bangladesh and Pakistan, two of the world’s most populous Muslim states, as well as India, home to the world’s fourth largest Muslim population, fear that Saudi Arabia could threaten to lower their respective annual quotas for the number of pilgrims allowed to perform the hajj, the obligatory Muslim pilgrimage to Mecca, and expel millions of migrant workers and expatriates in a bid to force them to join the boycott of Qatar.

Saudi Arabia has already used similar tactics, including a threat to reduce or cut financial aid, to pressure six sub-Saharan African nation (Senegal, Chad, Niger, Comoros, Mauritius, and Djibouti) into following its lead in taking punitive steps against Qatar.

The Saudi bid produced mixed results. Of the six states, only Mauritius severed its diplomatic ties with Qatar. Senegal, Chad, Niger, and the Comoros restricted themselves to recalling their ambassadors from Doha, while Djibouti, like Jordan, simply reduced the level of its diplomatic relations.

Similarly, Arab states aside from Bahrain, a virtual Saudi province, and Egypt, dependent on Saudi and UAE handouts, have been reluctant to fall into line. Algeria, Tunisia, Sudan, and Somalia rejected Saudi overtures, instead calling for dialogue between Qatar and its detractors.

Fellow GCC member Oman, and Morocco, monarchies with close ties to Saudi Arabia and the UAE, went a step further by helping Qatar alleviate the pain of the boycott by granting Qatari vessels access to ports and shipping food supplies to Doha. Kuwait rescued itself by emerging as the lead mediator in the crisis.

Somalia, a strategically located, war-torn nation in the Horn of Africa, has emerged as something of a mystery. Somalia has so far maintained neutrality despite the fact that Dubai-owned P&O Ports signed a $336 million, 30-year agreement in April 2017 to develop and manage a multi-purpose port in Bosaso, in the semi-autonomous region of Puntland. The self-declared republic of Somaliland agreed weeks later to allow the UAE to establish a military base in the port of Berbera and signed a $442 million deal with P&O to turn the port into a world-class hub.

At the same time, Somali media reported that President Mohamed Abdullahi Mohamed had rejected a Saudi cash offer of $80 million in return for his government breaking off diplomatic relations with Qatar.

On the other hand, Somalia’s minister for planning, investment, and economic development, Jamal Mohamed Hassan, announced that Saudi Arabia had agreed to increase Somalia’s hajj quota by 25 percent.

Somalia’s strategic importance to the Gulf in both commercial and military terms would seem to be the only logical explanation for it being rewarded despite refusing to join the Saudi-UAE campaign.

Major Muslim nations may take heart from Saudi Arabia’s inability to marshal the Arab world and garner wholehearted support in Africa. Yet they are also keenly aware that the kingdom has a history of using migrant workers as leverage, whose remittances constitute the backbone of foreign currency liquidity of many supplier countries, as well as reducing pressure on domestic labor markets.

Recall only the most dramatic instance when Saudi Arabia expelled some 700,000 Yemenis in 1990, in retaliation for Yemen’s refusal to wholeheartedly back the American- and Saudi-led rollback of the Iraqi invasion of Kuwait.

A similar number from a host of countries, including Asian ones, were forced to leave the kingdom starting in 2013, when Saudi Arabia tightened its labor law to ban foreign workers from running their own businesses, as well as making them more dependent on the Saudi employer who initially facilitated their employment.

In a telling comment, Bangladesh’s former ambassador to Saudi Arabia, Abdul Momen Chowdhury, warned in an interview with the BBC that “nothing is impossible” in how the kingdom might seek to build support for its campaign against Qatar. “If anyone obstructs what they want, or does not agree with their opinions, they are never hesitant to act.” Chowdhury said, putting his finger on the larger ramifications of the Gulf crisis for international relations.

The mixed Muslim response to current Saudi pressure tactics represents, in a twist of irony, the second time that Qatar has been at the center of a crisis that publicly displays limits to Saudi power. In November 2014, Doha successfully rejected a smaller scale effort by the kingdom, the UAE, and Bahrain to force it to change its ways when the three states returned their ambassadors to Doha after a nine-month absence without halting its support for Islamists and militants, much less taming the controversial Al Jazeera television network that gives a voice to the region’s dissidents.

To this should be added the fact that the kingdom’s inability to leverage its influence was made manifest in 2015 when Islamabad, one of its closest Muslim allies, rejected a request for Pakistani troops to be sent to Yemen in support of its ill-fated military invasion of that country.

Saudi Arabia’s inability to impose its will on either the Arab or the Muslim world raises questions of its ability to exploit its financial muscle and moral authority as the custodian of Islam’s two most holy cities, in order to cement its position as a leader. It also calls into question the kingdom’s rate of return on decades of checkbook diplomacy and a four-decade investment of an estimated $75-100 billion in propagating Sunni Muslim ultra-conservative religious, educational, and political activities across the Muslim world.

If anything, that investment has come to haunt the kingdom, with accusations that its policies are no different from the ones it is trying to force Qatar to change. A recent report by the conservative Henry Jackson Society accused Saudi Arabia of funding extremism in Great Britain. The report not only put the Gulf kingdom on the spot, but also forced the hand of British Prime Minister Teresa May to publish a government inquiry that allegedly also points fingers at Saudi Arabia—even if the latter turned out to be little more than an opinionated compilation of facts that had already been reported in the media.

 

Alternative Wahhabisms

The British inquiry nonetheless generated embarrassing headlines across the globe and prompted the Saudi embassy in London to reject it in a statement that repeated Saudi Arabia’s long-standing but troubling insistence that “we do not and will not condone the actions or ideology of violent extremism and we will not rest until these deviants and their organizations are destroyed.”

Saudi Arabia has undoubtedly been the target of devastating jihadist attacks. The term “deviant” is, however, one that both the kingdom and jihadists use to describe one another. In doing so, both acknowledge Sunni Muslim ultra-conservatism and jihadism’s common roots, but accuse the other of having deviated from the right path.

Moreover, Saudi Arabia has shown greater enthusiasm for countering its main rival, Iran, and Qatar, than jihadist groups like the Islamic State or Al Qaeda in Yemen.

Beyond their opposed geopolitical visions, Saudi Arabia and Qatar’s differing convoluted attitudes towards the role of Islam in politics and public life are rooted in different interpretations of one of the most austere strands of the faith, and how many in the ruling Al Thani family envisioned their country from the outset.

Qatar, the world’s only Wahhabi state alongside Saudi Arabia, draws a distinction between its “Wahhabism of the sea” as opposed to the kingdom’s more puritan “Wahhabism of the land” —a reference to the fact that the Saudi government has less control of an empowered clergy compared to Qatar, which has no indigenous clergy with a social base to speak of.

The absence of empowered Islamic scholars in Qatar, with the exception of Egyptian-born Sheikh Yusuf al-Qaradawi, is partly a reflection of the Al-Thani family’s ambivalence towards Wahhabism, which they view as both an opportunity and a threat: on the one hand, it has served as a tool to legitimize their rule; on the other, it represents a potential monkey wrench that Saudi Arabia could employ to assert control.

Opting to generate a clerical class of its own would have enhanced the threat, because Qatar would have been dependent on Saudi clergymen to develop its own. Potentially, that would have produced a clergy steeped in the kingdom’s puritan theology and inspired by its history of political power-sharing that would have advocated a Saudi-style, state-defined form of political Islam.

By steering clear of the option to groom an indigenous clergy, Qatari leaders ensured that they had greater maneuverability and would not have to contend with a clergy that had a say in political and social affairs. As a result, Qatar is free of the institutions that often hold back Saudi Arabia.

 

Problematic Options

The continued inability of Saudi Arabia and the UAE to generate a groundswell of support for their campaign against Qatar suggests that Riyadh and Abu Dhabi need to change their approach. Three options currently present themselves: negotiate a face-saving way out of the crisis, tighten the economic noose around Qatar’s neck, or seek to engineer a regime change in Qatar.

A negotiated solution would end the immediate crisis, but do little to solve the problem, as long as Gulf states remain unable to agree on definitions of terrorism and a common threat perception. It could also backfire if elements of a negotiated solution, such as the Qatari agreement to allow German intelligence to audit its books for funding of extremism, were also applied to Saudi Arabia.

More economic sanctions would increase pressure on Qatar, but not necessarily force Doha to its knees as long as access to international shipping lanes is retained; oil and gas exports are maintained; food and water requirements are met, thanks to imports from countries like Turkey, Iran, and India; and interactions with the international financial system are kept open.

A decision by Egypt to bar Qatari vessels from docking at Suez Canal ports does not bar them from transiting the waterway; nor does it halt badly needed Qatari LNG supplies to Egypt.

Similarly, Saudi Arabia and the UAE  have so far exempted Qatari gas exports to Dubai through a partially Emirati-owned pipeline that accounts for 40 percent of the emirate’s consumption. Saudi Arabia has also been careful not to disrupt the tanker market and complicate Qatar’s energy exports by blocking shared vessel loadings. Such a move would create logistical challenges not only for Qatar, but also for the kingdom’s own clients, who would be forced to reorganize dozens of cargoes. It could also reduce the number of available vessels and drive up shipping costs.

More immediate Saudi and UAE-led measures would likely focus on an effort to financially strangle Qatar by withdrawing their respective deposits from Qatar’s central and commercial banks, revoking licenses of Qatari banks in the kingdom and its allies, and freezing Qatari funds and investments in airlines, telecommunications, retail, and real estate. While painful, such measures are unlikely to do the trick.

International ratings agency Standard & Poor (S&P) reported that Qatari banks were strong enough to survive a withdrawal of all Gulf deposits, as well as a quarter of the remaining foreign funds that banks keep. Deposits and other funding sources from Saudi Arabia, the UAE, and Bahrain represent about 8 percent of total liabilities of Qatari lenders, or $20 billion, according to the same source. S&P also indicated that, in a worst-case scenario, only two of Qatar’s 18 lenders would have to dip into their investment securities portfolio. Based on scenarios it ran, S&P said that

the results show the rated Qatari banks to be in a decent position, on a stand-alone basis, to face a significant reduction of external funding. Even assuming a 20 percent haircut on the value of those investment portfolios, the banks should be able to continue operating without requiring the intervention of the Central Bank of Qatar.

The longer Qatar can hold out, the greater the pressure on Saudi Arabia and the UAE to resolve that crisis by hook or by crook. Throughout the crisis, Saudi and UAE media have maintained a drumbeat of reports, including interviews with little known dissident members of Qatar’s ruling Al Thani family, as well as former military officers opposed to Tamim’s policies.

Such reporting is designed to create an environment conducive to regime change in Qatar, despite the insistence of UAE Minister of State for Foreign Affairs Anwar Gargash that removing Tamim from office is not part of the alliance’s agenda. It also flies in the face of the fact that Riyadh and Abu Dhabi have not shied away from funding the toppling of a democratically elected president in Egypt, or factions of the armed opposition to the internationally recognized government in post-Qaddafi Libya.

In an ominous warning, Abdulrahman al-Rashed, a prominent Saudi journalist with close ties to the government, suggested that Qatar could experience its own Raba’a al-Adawiya Square—a reference to a Cairo square in which hundreds of supporters of the Muslim Brotherhood were killed by Egyptian security forces in August 2013. The demonstrators were holding a weeks-long sit in on the square to protest the Saudi and UAE-backed military coup that toppled Mohammed Morsi—a member of the Muslim Brotherhood and Egypt’s first democratically elected president—and brought Al Sisi to power.

Moreover, a prominent Saudi lobbyist, Salman al-Ansari, head of the Washington-based Saudi American Public Relation Affairs Committee (SAPRAC), added that Tamim could meet the same fate as Morsi.

 

Argus Eyes

The bottom line is that Saudi Arabia and the UAE have engineered a crisis that they might not be able to control: it could backfire, thus weakening rather than strengthening them by reconfiguring the balance of power in the Gulf in disadvantageous ways—for Riyadh and Abu Dhabi.

Despite the jury being out on what the Gulf will look like once the crisis is resolved, what is certain is that the resolution of the crisis will have far-reaching consequences for future norms underlying international relations. No one will be watching the crisis with bigger Argus eyes than small states in the Gulf and beyond, looking for lessons to be learned for their own positioning in disputes in geographies near and far—the South China Sea, to name the most obvious example.

 

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