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The COVID19 Created Opportunities for Re-engagement within the GCC

Three years after the start of a diplomatic dispute between Qatar and its Gulf Cooperation Council (GCC) neighbors, there have still been no concrete efforts to resolve it. Nevertheless, the GCC’s blockade of Qatar has been a failure. Doha has flaunted its unwillingness to comply with the blockading states’ demands and even managed to thrive. A cynical analysis would propose that the main reason that the blockade is not yet lifted is to ‘save face’. But, last March, just after the World Health Organization (WHO) declared COVID-19 a pandemic, two Qatari top officials (prime minister and interior minister) participated in a (virtual) GCC emergency meeting to discuss regional strategies to confront the medical emergency. Therefore, the pandemic has presented an appealing excuse to overcome the thorny problem of honor, raising the prospect of a gradual reopening of relations. For the first time since it began in 2017, the GCC’s diplomatic tension shows signs of easing, even if the path toward full and formal reconciliation may still be far off.

On June 5, 2017, the GCC states placed Qatar under a total land and air embargo that was to be lifted on the condition that Doha address 13 demands (including shutting down the al-Jazeera network) that would have de facto crushed its independence and foreign policy. The divisions have become entrenched amid the antagonism that Saudi Arabia, the United Arab Emirates (UAE), and Bahrain have harbored against Qatar’s geopolitical ambitions, accusing it of supporting terrorist organizations, especially the Muslim Brotherhood, and of providing them with platforms to spread their message, particularly al-Jazeera. Riyadh and Abu Dhabi have been striving to redefine the GCC and the Middle East region as a whole around a Saudi-Emirati axis, determined to crush the revolutionary forces that contributed to fomenting the so-called Arab Spring.

All of the Gulf nations have a high risk of exposure to COVID-19 and other infectious diseases since they have invested heavily in air transport, tourism, and logistics, which require significant movement of people. The slowdown of supply chains, which is an effort to reduce this risk, has without a doubt impaired the lives of the region’s inhabitants.

Facing the Pandemic Requires GCC Reconciliation

While many social media posts from the blockading states accused Qatar of having brought COVID-19 to the region, the Gulf governments have taken concrete steps in collectively battling the virus that have signaled a willingness to ease tensions – if not to resolve the dispute outright. One of the clearest signs to this effect was the UAE’s delivery of aid to Iran, and its holding of formal bilateral talks last August. For its part, Saudi Arabia declared a ceasefire – tenuous though it may have been – in its war against the Houthi rebels in Yemen. Still, the combination of a pandemic and an oil price crisis have created structural difficulties for Saudi Arabia and the other Gulf monarchies, all of which were engaged in a process of economic transition, which has been compromised – at least for now.

While Saudi Arabia and the UAE have criticized Qatar’s alliance with Turkey, the coronavirus helped spark a resumption in regional talks in early 2020 to discuss the impact of the coronavirus in the region. Ironically, given Doha’s experience with the regional embargo imposed against it by fellow GCC member states, the country has learned how to confront emergencies and uncertainty. Qatar started importing less and even making its own food while enhancing trade links with countries with which it enjoys good relations such as Turkey, Oman, and Iran. Qatar, therefore, has much to teach its fellow GCC states in how to manage the pandemic.

Resolving the diplomatic crisis would make it possible to coordinate responses to the pandemic over the long term. Because economic and social difficulties, more than health issues, threaten the Gulf countries. Despite that the number of COVID-19 infections in the Gulf is growing, there are fewer deaths relative to other countries, since the GCC population is young and therefore the disease is less likely to be fatal for them.

Concerted Response

Despite its horrific global impact, the COVID-19 pandemic could be the GCC’s opportunity to rise above the crisis. Ending the dispute could help to stabilize the Gulf region amidst the pandemic, preventing tensions from escalating further as the blockading states and Qatar alike cope with the unprecedented medical and logistical emergency. While a formal pacification remains unlikely in the short term, it does appear that GCC monarchies have settled into a phase redefining the balance of power in which the UAE has been playing the ‘alpha’ role, characterized by a ‘cold’ peace. But, the priorities of the individual GCC states will remain domestic stability, as each must grapple with the fallout of the pandemic.

The epidemiological challenge of combatting the pandemic has exposed the weaknesses of the GCC states’ rentier nature. Rentier states obtain almost all of their national income by selling their natural resources to foreign markets. The Gulf states, rich in gas and oil, are unanimously considered the most successful and prototypical examples of rentier states. Until a few years ago, their main concern was that their oil resources would run out, as monarchs are being pushed to consider economic diversification because of different, and perhaps more immediate, factors. Oil reserves are not depleting, but prices are falling in a way that was unexpected, which further complicates the GCC states’ strategy to diversify their model away from rents.

The pandemic – which caused a massive drop of consumption following a period of overproduction – has added more obstacles ahead of the economic conversion strategy of the rentier states. In such a scenario, only greater cooperation and integration can help overcome the barriers. Saudi Arabia’s singlehanded policy of overproduction, which reached a peak in March 2020 in an apparent attempt to challenge Russia and the United States, made it clear that the mechanisms with the GCC, OPEC, and even Riyadh-Washington relations need fixing. The coronavirus crisis, given its economic disruption, could encourage an effort to repair relations and facilitate a rapprochement among the GCC.

Only a concerted response will allow the individual GCC States to mitigate the pandemic’s social and economic consequences. Where diplomacy has failed, the pandemic has forced states’ hands to move towards cooperation. This turbulent period has forced rival countries to put hostilities aside in order to face the more threatening common enemy: the pandemic. Faced with an unprecedented loss of GDP, whatever diplomatic faults existed within the GCC cannot be allowed to linger. Such conflict has become expensive and even pointless. Therefore, the need to overcome the pandemic has pushed GCC members together.

The Gulf states face the risk of economic depression, but that very risk of a coronavirus-generated economic crash has opened the potential for diplomatic breakthroughs. The collapse in crude oil prices and the continuing state of uncertainty and volatility on the oil markets, which resulted in OPEC’s inability to respond to the changes taking place, represent an existential challenge for the GCC countries. The lasting drop in oil prices since 2014 coupled with the consequences of the pandemic could continue to slow economic activity for a prolonged period. It therefore seems necessary to end a rather pointless political dispute in favor of formulating an effective collective response to the current and future social and economic difficulties that the region faces.

Does the GCC Need Qatar More than Qatar Needs the GCC?

The coronavirus appears to have persuaded GCC governments that a health emergency requires regional and international cooperation. On a more economic level, all of the GCC countries rely excessively on oil or gas exports. The economic crisis triggered by the pandemic has made it clear that these states must shift their focus away from oil in order to withstand the turbulent economy. The GCC embargo has produced unintended positive effects for Qatar, such that they are not facing these same problems of oil export dependency as their neighbors. Far from suffering from the isolation, Qatar left OPEC on January 1, 2019, and became the world’s top liquefied natural gas market (LNG) producer. Qatar responded to its GCC neighbors’ embargo by stabilizing its economy and currency while also boosting exports. More significantly, Qatar started importing less and has managed to increase food production despite its harsh climate, sandy soil, and water scarcity. In other words, the embargo has helped the country accelerate reforms. Qatar

Qatar’s rivals will also have to embark on a similar radical socio-economic transformation process. COVID-19, coupled with the collapse in oil demand, have driven Riyadh and its regional allies to accelerate their touted modernization efforts, typified by massive infrastructure projects and investments in technology, mobility, and tourism attraction, even if the visions that have guided these processes may have to be reevaluated.

COVID-19, along with the collapse of demand for and the price of oil, has pushed the GCC states to accelerate this socioeconomic shift. The future (that is, post-oil) has arrived much earlier than expected. And this new present fails to match what the emirs had imagined. All states must change or revise their plans, and perhaps it is in this light that the UAE has taken bold diplomatic steps recently (launching a diplomatic process with Israel). The new reality has brought with it social and security risks that no Gulf state can tackle alone, and that only a less competitive geopolitical climate can help ease. In this sense, COVID-19 may have accelerated a process of GCC reconciliation.

 

Alessandro Bruno (@TheAlessandrist) is an analyst at Gulf State Analytics (@GulfStateAnalyt), a Washington, DC-based geopolitical risk consultancy. He is a frequent guest on BBC, CBC, and CTV. He holds an MA in International Relations from the University of Toronto – where he also started a Ph.D. Bruno has worked abroad as a United Nations officer in Libya.

The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views of Gulf International Forum.

Alessandro Bruno (@TheAlessandrist) is an analyst at Gulf State Analytics (@GulfStateAnalyt), a Washington, DC-based geopolitical risk consultancy. He is a frequent guest on BBC, CBC, and CTV. He holds an MA in International Relations from the University of Toronto – where he also started a Ph.D. Bruno has worked abroad as a United Nations officer in Libya. @TheAlessandrist.

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