Wednesday, June 16, 2021

QATAR: Accord Signed with Saudi Arabia, UAE, Bahrain and Egypt Restoring Trade Links

The Kingdom of Saudi Arabia, the United Arab Emirates (UAE), Bahrain and Egypt have restored diplomatic and economic ties with Qatar after a three-year rift which saw Qatar’s trade impacted deeply by a serious blockade of its land, sea and air trading routes. The accord was signed on the 5 January 2021 at Al Ula, Saudi Arabia, during the 41st summit of Gulf Cooperation Council leaders. 

Since the signing, all nations involved have moved quickly to restore transportation links. Saudi Arabia was the first to lift its ban, with the only land border crossing between the Kingdom and Qatar at Salwa Port reopening to cross-border traffic on 9 January, along with a new dedicated Covid-19 testing facility. All UAE border restrictions to Qatar were also lifted on 9 January. Qatar Airways announced it would resume flights to Saudi Arabia from 11 January; and flights to Egypt would resume, starting with services to Cairo on 18 January, followed by Alexandria on 25 January. Bahrain has opened its airspace to Qatar since 11 January, confirmed by the Bahraini civil aviation affairs authority. 

Opinions are mixed as to how much the blockade removal will boost Gulf trade. According to Standard Chartered, Qatar’s economy is set to now grow by 3% as the easing of border closures help trade, tourism and logistics, an upwards revision from its previous 2.1% growth estimate. In contrast, Nick Wilson, Chairman of the Gulf Investment Fund, a London-based fund that invests in GCC equities, is less bullish, saying: “Qatar has very effectively found new sources of supply and forged new trade links in response to the blockade. Even with Covid, the Qatar market is trading 17% above where it was when the blockade was imposed in 2017. Qatar has good reason to maintain its current trade arrangements.”

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