Long dispute could hit Qatar economy, megaprojects: Analysts

Traders monitor screens displaying share information at the Qatar Stock Exchange in Doha Monday. (Reuters)
Updated 06 June 2017

Long dispute could hit Qatar economy, megaprojects: Analysts

DUBAI: Regional financial and economic markets — with the exception of the Doha exchange — on Monday largely shrugged off the fallout of the diplomatic rift between Qatar and several other Arab countries.
Most bourses in the region saw limited drops of less than 1 percent, with the oil price down 1 percent at the end of a volatile day.
The Qatar Stock Exchange index closed down 7.5 percent, however, as some of the country’s blue chip stocks felt the impact of the trading and commercial sanctions against the country.
Some experts warned that the economic impact of the actions taken against Qatar by Saudi Arabia, the UAE, Bahrain and Egypt — if they prove long-term measures — could put at risk some of Doha’s megaprojects like the 2022 FIFA World Cup.
Analysts at Citibank, the American financial giant, said the closing of Qatar’s land border with Saudi Arabia and ending of air and maritime commerce could hit economic growth. “The construction sector is a key driver of the Qatari economy and is partially dependent on overland routes for supplies,” it said.
“If sanctions are not resolved in short order, World Cup construction could be impacted, and plans for fans to base themselves in neighboring countries might also be affected,” the bank said.
Other potential risks Citi sees are a rise in food prices, an erosion of fiscal balances, and a rise in borrowing costs. “We believe that prolonged sanctions would exacerbate this and potentially make financing of external liabilities more costly and difficult,” it added.
Other experts said that the economic fallout from the confrontation between Qatar and some of its Arabian Gulf neighbors was likely to be limited.
Jason Tuvey, Middle East analyst at London consultancy Capital Economics, said there were three reasons why the impact would be temporary.
“First, the impact on energy markets is likely to be short lived… Gas supplies from Qatar could potentially be disrupted if the other Gulf countries blocked Qatari tankers traversing the… Arabian Gulf. But, given that a maritime dispute could block their own oil shipments, this seems highly unlikely. Meanwhile, reports (on Monday) morning suggest that the Dolphin pipeline, through which Qatar sends gas to the UAE, is operating as normal,” he said.
Tuvey said the regional economies are likely to shrug off the dispute. “Trade ties between Qatar and the rest of the region are relatively small. Qatar’s exports to the region are limited, with most of the country’s oil and gas exports going to Asia. Qatar’s imports from the rest of the region are also trivial,” he said.
“In any case, most are goods that are transited through the other countries, so could be diverted if necessary. One potential concern is that Qatari banks may now find it more difficult to secure wholesale financing, which could precipitate a more abrupt cooling of the country’s credit boom,” he added.
Tuvey also sees signs that the row could de-escalate quickly. “There are signs that Qatar is bowing to pressure from Saudi Arabia and its allies,” he said.


Algerian parliament vote ‘before year’s end’

Algerians walk across from the People's National Assembly (parliament) building during a voting session on constitutional reforms in the capital Algiers, on September 10, 2020. (AFP)
Updated 22 September 2020

Algerian parliament vote ‘before year’s end’

  • The term of the widely discredited current lower house, elected in 2017, was originally set to end in May 2022

ALGIERS: The Algerian president says early legislative elections aimed at opening parliament to civil society will be held before the end of the year to give a new face to a parliament long dominated by a single party.

Abdelmadjid Tebboune did not set a date but indicated on Sunday evening that the parliamentary voting would follow a national referendum on a constitutional revision to be held Nov. 1, a highly symbolic date marking the start of this North African nation’s seven-year war with France for independence that began Nov. 1, 1954.
The next National Assembly, the lower house of parliament, which “will be made up of lawmakers from universities, civil society, will serve as the base of the ‘New Algeria,’” Tebboune said in an interview with two Algerian newspapers.
“If the people want change, it is time to work to not remain in the ambiguity that prevailed earlier.”
Tebboune was referring to the corruption that highlighted the 20 years of power of Abdelaziz Bouteflika, forced to resign in April 2019 amid growing peaceful street protests and a push from the then-Army chief Ahmed Gaid Salah, who died in December.

If the people want change, it is time to work to not remain in the ambiguity that prevailed earlier.

Abdelmadjid Tebboune, President of Algeria

Tebboune was elected promising change, including a new parliament, though the vote was largely boycotted by the protest movement, the Hirak.
The term of the widely discredited current lower house, elected in 2017, was originally set to end in May 2022.
A new electoral law foreseen in the constitutional revision “will put in place safeguards to keep dirty money out of politics,” the president said, adding that with the constitutional revision Algeria would “truly be at the service of the citizen and not at the service of a group exercising domination.”
Numerous business leaders and two prime ministers have been jailed on corruption charges since the downfall of Bouteflika. During a trial last week, lawmaker Baha Eddine Tliba admitted to paying the former chief of the powerful FLN party Djamel Ould Abbas, to be placed on his list of candidates to ensure him a parliamentary seat.