5 facts about the Qatar blockade and its effects on OFWs

In another display of deep-seated divisions and internal squabbles in the Arab world, three Persian Gulf monarchies recently decided to place a de facto siege on the tiny, prosperous Sheikhdom of Qatar.

All of a sudden, one of the world’s richest countries has found itself precariously isolated—and its very existence put into question.

The move was led by Saudi Arabia, the effective leader of the Gulf Cooperation Council (GCC), which is composed of all littoral states in the Persian Gulf with the exception of Iran, the sole Shia-ruled, non-Arab nation in the area. There are five important things to keep in mind as far as the ongoing crisis is concerned:

1. Qatar looks more vulnerable than it seems. Saudi Arabia just shut off the Sheikhdom’s only land border, where up to 40 percent of food imports pass through. The three immediate neighbors states of Saudi Arabia, Bahrain and the UAE also restricted Qatar’s access to their airspace. Flight to and fro Qatar were suspended by three regional states -- Saudi Arabia, the United Arab Emirates and Bahrain -- who also moved to expel any Qatari national within their territories. Egypt, a staunch ally of Saudi Arabia, also joined the blockade.
   
   As a result, the viability of one of the leading airlines in the world, Qatar Airways, is now under question, since even flying out of Doha means painfully meandering through restricted airspace, which raises fuel costs and adds to travel time. Restrictions on food imports also led to panic buying among the mostly wealthy Qatari citizens. Local stock markets were also in tailspin, showing the depth of investment anxiety over the latest diplomatic crisis in the region.
    
2. Qatar is not totally hopeless. With a population of barely two million people, mostly migrant workers and expats running managerial jobs, the country boasts $335 billion in sovereign wealth funds -- excess cash that has allowed a tiny nation to become a major player in global financial hubs, from New York to London. As the world’s largest exporter of Liquefied Natural Gas (LNG), which hasn’t been affected yet by the Saudi-led siege, the Qatari economy is expected to muddle through a potentially prolonged blockade.
   
   As the host to America’s largest military base, Qatar can also count on the United States (but not necessarily President Donald Trump) to mediate the crisis. Kuwait is also trying to mediate between the disputing parties, while Iran has extended help by offering to provide food supplies to Qatar.
    
3. If the crisis continues for months, and supply of cement and other raw materials remains severely restricted, the Qatari economy could dramatically slowdown. This could undermine mega-projects ahead of the 2022 World Cup, among other ambitious infrastructure plans in the country; affect banking, travel and tourism industries; undermine consumer confidence and even lead to a recessionary spiral.
   
   There are as many as 250,000 Overseas Filipino Workers (OFWs) in the country, who are responsible for almost $300 million in remittances. Employment opportunities for them and other prospective Filipino employees are bound to shrink dramatically.
    
4. War is extremely unlikely if not unthinkable. This isn’t the First or Second Gulf War. Though certain leaked information and recent developments (e.g., alleged Qatari ransom payments to extremist groups and Trump’s visit) were seen as triggering factor/s, at its very heart the current crisis is the result of a broader attempt by Saudi Arabia to push back against its rivals, namely Iran, and certain Islamist groups like the Muslim Brotherhood.
   
   In particular, Riyadh isn’t pleased with Doha’s historically friendly relations with Tehran. There was a similar attempt in 2014 to isolate Doha, but disputing parties eventually managed to find a common understanding as a new king took over the Qatari kingdom. I am cautiously optimistic that the crisis could be defused in coming weeks, assuming mediators play their role effectively and Doha manages to appease the concerns of its more powerful Arab neighbors, namely Saudi Arabia and Egypt.  
    
5. This isn’t and won’t be the first crisis in the Middle East, including its most prosperous and relatively stable sub-region, the Persian Gulf. Perhaps more than ever, it is important for the Philippine government to revisit its labor export policy, particularly in the Middle East, and instead focus on making sure that our own robust growth at home is transformed into a more inclusive and egalitarian form of national development.
   
   Sending millions of OFWs to an inherently unstable region, which is also suffering from structural economic problems, isn’t sustainable. According to the International Monetary Fund, the GCC countries, which enjoyed a budget surplus of $600 billion half a decade ago, are expected to run a $700 billion budget deficit by 2020.
   
   In the meantime, the Philippine Congress and Department of Budget and Management should expand the budget of the Department of Foreign Affairs and other relevant agencies so that they can provide emergency services should the situation in the Persian Gulf escalate into full-blown conflict or an economic collapse in Qatar and other neighboring Sheikhdoms.

Prof. Richard Heydarian is GMA resident analyst and author of, among others, “How Capitalism Failed the Arab World” (Zed, London).