Led by Saudi Arabia, the United Arab Emirates (UAE), Egypt, Bahrain, Yemen, the Maldives and one of the competing administrations in Libya severed diplomatic ties with Qatar yesterday morning on the grounds that Doha supports terrorist groups in the Middle East. The issue, which was reported as the Gulf crisis, highlighted the necessity for Turkey to act as a balancer of power and raised a number of topics on the fields of economy, finance and energy. Yet, experts have said that the crisis will not affect Qatari investments in Turkey since it mainly concerns relations between the Arab countries. Acting as a balance, Turkey can alleviate the possible economic impacts stemming from the crisis.
Erhan Akkaş, a Ph.D. candidate in Islamic Economics and Finance at Durham University researching the political economy of the Arab Gulf States, evaluating the economic impact of the crisis, told Anadolu Agency (AA) that the problems between the Gulf states and Qatar have turned into "concrete sanctions" with the final decision to withdraw diplomatic relations.
Recalling that such diplomatic problems previously broke out in the region, he said concrete steps and heavy sanctions were not taken. Akkaş said: "Despite being a small Gulf country in terms of population density and the surface area it covers, Qatar is regarded as a small state with big politics in the Gulf literature. As such, this crisis, as well as the regional effect, entered the global agenda and messages for calm have been issued by the leaders of the country."
Stressing that Qatar is an important actor in the global financial system with its existing funds as well as being the world's richest country in terms of national income distribution, Akkaş said that Qatar, which owns the world's ninth-largest wealth fund with a size of $350 billion, has invested worldwide in various field such as banking, the automotive industry and technology.
He said that the effect of the crisis on the market is negative and that the Qatar Stock Exchange has experienced the most effective decline in recent years. He added that one of the biggest impacts of the crisis that will cause commercial stress in the regional economy will be observed in the food sector, in which the country is completely foreign-dependent.
'Qatar will procure its needs from Turkey'
Akkaş emphasized that Turkey is in an advantageous position in terms of its exports to Qatar. He said: "As a result of the bans imposed on Qatar by its neighbors, Qatar will procure the products it needs from friendly countries like Turkey. In this case, there may be an increase in Turkey's exports to Qatar in the near future. Of course, Turkey needs to solve the transportation problem in order to increase its exports to Qatar."
Regarding the Turkish companies investing in Qatar, Akkaş said it would be appropriate to evaluate the main elements of employment, supply and the financial system, noting that with the beginning of the crisis, the shares of major construction companies doing business in Qatar also lost value.
Akkaş said that the fall in stocks is the fastest-observed financial effect. "In the context of product procurement, the fact that construction companies will be unable to pass materials supplied from Arabia through customs with the beginning of sanctions will have a serious cost, and it is possible that there will be an interruption in construction," he continued.
Suggesting that there will be an increase in the cost of Turkey's imports from Qatar, while an increase is expected in its exports to Qatar at a time when the economic shocks are being discussed along with the Qatar crisis, Akkaş said: "In this case, the increase in Turkey's exports to this country will relieve Qatar, which is completely dependent on Saudi Arabia for its food products, in this troubled process. In terms of Turkey, on the other hand, exports that have not been exported to Qatar before will be on the agenda."
Wise Men Center for Strategic Studies (BILGESAM) Middle East research expert, Ali Semin said that the decision was entirely about the Arab world. Pointing out that Qatar has good economic relations with Turkey, Semin said Turkey also has very good economic relations with Saudi Arabia. "Maybe there are imbalances such as some declines or rises in the economic sense, but Saudi Arabia's withdrawal of diplomatic relations with Qatar does not mean that the entire power of the country is taken away. In that sense, I do not think that it will affect Turkey very much. But it will affect Qatar's domestic policy," he said.
Recalling that the Qatar Stock Exchange has declined significantly for the first time, Semin said this decline did well for oil prices in OPEC.
Semin said that Qatar has mostly invested in real estate in Turkey, adding that Turkish companies that invest in the country will suffer to a certain extent, but the investments in Turkey will possibly not be damaged too much.
Ankara to sustain advantage with a good balancing policy
Professor Özden Zeynep Oktav from Istanbul Medeniyet University said that ties between Qatar and Saudi Arabia have been strained for a long time and that the most important reason is the independent relations from the Gulf Cooperation Council (GCC) that Iran and Qatar have developed.
She said that the relations are mostly commercial, which is caused by the fact that Qatar is not interested in nurturing enmity toward Iran like the others, adding that the decision to cut diplomatic relations came after U.S. President Donald Trump's visit, and that the Saudis, eager to protect themselves from the influences of the Arab Spring, have long established their policies on developing good relations with Washington and on a foreign policy that complies with Israel. "Saudi Arabia has always opposed the Muslim Brotherhood and perceived it as a movement against them. Therefore, their relations with Qatar have been following a negative course," she said. "I think Ankara will not be damaged by this conflict with a good balancing policy and it can even increase its maneuverability in the region."
Qatar's $350 billion wealth fund
The fund, which is managed by the Qatar Investment Authority (QIA) and has a value of $350 billion, is making important investments around the world. The size of the fund is about twice the total market value of the companies on the Borsa Istanbul. Many companies in Qatar are either fully owned by or partnered with the fund.
The wealth fund also has investments in the Russian oil company Rosneft, Dutch giant Royal Dutch Shell, French oil giant Total, British bank Barclays, Swiss bank Credit Suisse, China's agricultural bank, German companies Volkswagen and Siemens, the world's jewelry giant Tiffany & Co. and Heathrow airport.
Turkey's exports to Qatar reaches $440 million
Turkey's exports to Qatar stood at about $440 million last year. The majority of exports were ships, yachts, electrical and electronic products, machinery and furniture.
Turkey's imports of $271 million from Qatar in 2016 were largely oil and oil derivatives, aluminum and plastic products. Projects have been conducted to double the total foreign trade volume with the country.
Qatar stands out as an important market for Turkish contractors in terms of project quantity. Contractors conduct business worth $15 billion in the country.
Mustafa Başar Arıoğlu, chairman of Yapı Merkezi İnşaat, which has undertaken the construction of Doha Metro with foreign partners, recalled that Turkish contractors have taken on important projects in Qatar. "Now we have no idea what the effects of this last crisis will be. According to the information we received, everyone in Qatar seems calm. We mind our own business," he said.