Ongoing Qatar blockade stifles investment

Tensions are mounting in the Gulf Co-operation Council region as the Saudi and UAE-imposed blockade on Qatar enacted on June 5 continues.

The economic and political blockade, launched on the grounds that the Qatari kingdom allegedly sponsors terrorism (a claim it denies), has cut the tiny nation’s main import and export routes, blocked its airspace and abruptly cut many of its financial and business activities.

This has made the country a costlier place to do business, says Ryan Turner, lead political risk analyst at Protection Group International. “Countries involved in the dispute have restricted some of their domestic companies from doing business in Qatar, affecting some $2bn in contracts in construction, professional services and exports,” he says.

Particularly vulnerable are the financial and real estate sectors, which face a significant blow from restrictions on trade with other Gulf states. “Guidance from regional central banks, as well as sanctions on Qatari entities, have already deterred some businesses from Qatar-related transactions,” says Mr Turner. “Saudi and Emirati officials have also signalled that they might step up their efforts to deter companies from doing business in Qatar, a scenario likely to alarm regional investors.”