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How Do Qatar and the UAE Compare Two Years After Severing Ties?

17 September 2019

June 2017 saw yet another difficult period for the Middle East when a huge barrage of countries - ranging from the UAE to Egypt, to Senegal, Mauritius, and the Maldives - severed diplomatic ties with Qatar. The supposed Qatari violation of the Gulf Cooperation Council and the support of terrorism led to the drastic action being taken, which left Qatar in a precarious position. Qatar refuted many of the claims and noted its backing of the USA’s 'War on Terror'. The initial supply issues resulted in Qatar’s reliance on Iran and Turkey for its trade and an increase in diplomatic relations with Iran, which drew criticism from many of the other countries involved, as well as those in the West. But, two years later, how is Qatar faring beyond its diplomatic crisis?

uae qatar

An increase in public spending and the recovery of the energy sector has seen Qatar's GDP increase so far in 2019 – 2.2% growth in 2019, rising to 2.5% predicted growth in 2020. The geopolitical tensions, as well as the volatility of the energy market, mean that economists are still wary of how Qatar may fare in the years to come, which has led to many relying on a wealth of data to quantify Qatar's current economic situation. For example, the strength of a country’s currency can be a tangible measure of its economic buoyancy, with information found on online forex trading platforms helping to plot currency values in relation to other currencies. Such platforms can be used to compare how well the Qatari riyal is doing compared to the dirham, with online analysis also helping to track key happenings in the geopolitical crisis to see what events are affecting each currency and their relative value.

Another barometer of how Qatar is faring would be to see how its regular working families have been affected. The average salary in Qatar stands at approximately 11.68% more than in the UAE at $11,473 per month. Yet, to combat this, the UAE have partnered with a very strong presence from the US, partnering with companies such as Amazon. Indeed, for the first time, Amazon has launched in Arabic for both its mobile app and website, with UAE customers being able to access a Souq and Amazon partnership in Amazon.ae following the latter's acquisition of the former during May 2019.

major acquisitions

This marks a huge step in Amazon's illustrious acquisition history, with previous acquisitions including the launch of Amazon paired with Whole Foods in 2017 for $13.7bn, Zappos for $1.2bn in 2009, and Twitch for $970m in 2014, all of which show the company's efforts to diversify its portfolio in much the same way as the three other companies that comprise GAFA, as seen in the infographic above. Could Amazon's presence in the UAE lead to a mending of fences with Qatar, as it continues its rollout through the Middle East following its acquisition of Souq?

The Qatari-UAE relations are precarious and tensions across the MENA area are high - especially with the potential involvement of the US, UK, and Iran. But, both the UAE and Qatar are faring well with their economies - so perhaps the UAE entering a partnership with Amazon may well showcase economic flexibility in the years to come.

Davies Krish

With a background in journalism and news reporting, Davies enjoys finding surprises and unusual sights in some of Middle East's most well-traveled destinations.

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