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LMDLe Monde diplomatique SEPTEMBER 2011 i
QATAR SUPPLEMENT
T
he Qatari authorities are aware that
hydrocarbon reserves will not last
forever, and they intend to profit from
the financial security that oil and
natural gas exports have brought them (80%
of external revenue, 60% of total revenue) by
diversifying the economy. At the end of 2008,
they launched a long-term development plan
called National Vision 2030. This strategic
programme officially began in March 2011
with its first phase spread over five years. It
is divided into four main areas: international
centres for the knowledge economy; a transport
hub (air, sea and land); a regional financial
centre; and tourism focused on business travel,
symposiums and conferences.
Qatar’s determination to diversify has also
resulted in an ambitious industrialisation
programme, especially in petrochemicals, the
chemical industry, aluminium, steel, paper
and fibre, agribusiness, and the liquefaction
of natural gas (see Gas trump card). By 2016
Qatar will have spent an average of $15-18bn
per year, around 40% of its annual expenditure,
on financing investments in infrastructure and
economic diversification. It has already spent
almost $100bn under its 2005-10 five-year
investment plan.
On a macroeconomic level, to support the
development of non-hydrocarbon business,
Qatar wants to attract foreign investors and
also encourage the creation of local small
and medium enterprises (SMEs). The Qatar
Industrial Manufacturing Company (QIMC),
whichconsistsofsixsubsidiaries,hasthemission
of promoting SMEs, if necessary by providing a
part of their start-up capital and helping them to
export the “Made in Qatar” label. It helps them
to identify outlets in Gulf Cooperation Council
countries, the Maghreb and Arab countries
north of the Arabian Peninsula. The authorities
have launched a credit-insurance programme,
Al-Dhameen, to improve SMEs’ access to
finance. A new agency responsible for SMEs
will be created in 2011 under the leadership of
the Supreme Council for Economic Affairs and
Investments.
The government has also comprehensively
revised its protectionist legislation on foreign
investors. Since 1 January 2010, corporate
income tax has been set at the flat rate of 10%
(before there were several rates ranging up to
35%). Similarly, since 1 February 2011, foreign
investors can hold 100% of the capital of a
Qatar-registered company, except in certain
sectors such as banking, insurance, real estate
andconsumergoodsimports,wherethemajority
of the capital must be held by local operators.
Finally, Doha has increased its efforts to counter
inflation, whose record levels in 2007 (+13.8%)
and 2008 (+15%) – due to the simultaneous rise
in the prices of hydrocarbons, food and real
estate – made the country less attractive. Prices
rose by only 1% in 2010 and inflation should
level off at 3% in 2011, indicating that it is
under control.
The 2022 FIFA World Cup was awarded to
Qatar in December 2010, and the decision is
already boosting economic activity. The emirate
has committed to building nine new stadiums,
and renovating and expanding the three existing
ones, at a total cost of $4bn.The authorities have
decided that this programme is to be headed by
local companies in partnership with foreign
operators, in the hope that it will revitalise local
subcontracting in the civil engineering and
construction sectors.
One of Qatar’s main aims for the next 20 years
is in the field of the knowledge economy. Under
the leadership of the Qatar Foundation, the
emirate has finished building Education City,
intended to be a regional centre of excellence
in higher education. Several North American
and European universities and business schools
– including Hautes Etudes Commerciales
in Paris – have already established branch
campuses there. Beyond this flagship project,
the Qatar Foundation is also contributing to the
development of the Qatar Science &Technology
Park (QSTP), whose objective is to attract the
R&D functions of large companies in the oil
industry (Total, Exxon Mobil) or technology
and IT (European Aeronautic Defence and
Space [EADS], Apple, Microsoft, etc).
Qatari firms have also begun to invest in
R&D. Pragmatech, a recently created subsidiary
of United Development Company (UDC), is
making a name for itself on the international
stage for its text processing, document
summarising and referencing software. In
June 2011 the Pan Arab Web Awards Academy
in association with Microsoft and Business
Software Alliance (BSA) awarded Pragmatech
a prize for its high-quality web design.
Alongside the knowledge economy, tourism
in all its forms is a priority, despite competition
from neighbours such as Dubai and the United
Arab Emirates. Qatar plans to double its
efforts in the hotel business to catch up with its
neighbours and prepare for the World Cup. The
country currently has 11,000 luxury rooms in
72 hotels, including 17 five-star and 13 four-
star establishments. The authorities’ goal is to
reach a total of 90,000 rooms by 2022.
More tourism means more air travel. As well
as the construction of a new $15bn airport in
Doha, which will serve 24 million passengers
in 2012 (and 50 million in 2015), the emirate’s
business strategy is to make itself the obvious
transit point for western tourists travelling to
the Far East.
The idea is that travellers flying with Qatar
Airways will stop over for several days in
Doha or one of the new towns currently under
construction, on either their outward or their
return journey. Qatar is in the midst of an air
travel boom: the national airline announced in
December 2010 that it had had its first profitable
year and planned to go public in 2012. This step
should finance the expansion of its fleet from 92
planes to 120 by 2013.
Qatar also wants to position itself as a
regional centre for medical tourism. In 2012 the
$8bn Sidra Medical and Research Centre will
open its doors. It is the region’s first hospital
entirely equipped with digital machines, and
aims to attract patients from Southeast Asia as
well as the Gulf area.
The growth of tourism is directly connected
to the growth of the property sector. One of
In just a few years Qatar has risen to the forefront of
the global economic scene. Though the unexpected
influence of the TV network Al-Jazeera can occasionally
put Doha in a tight spot, the growth of this small Gulf
emirate owes nothing to chance. Its rise is based on a
long-term strategy that combines liberalism and free
trade, development of its exceptional gas reserves and
investment in new technologies
Akram Belkaïd is a journalist
0 50 100 km
Al-
Ruwais
Al-Khor
Doha
Al-Wakrah
Oum Said
Oum Bab
Dukhan
Al-
Zubarah
Hawar
Islands
(Bahrain)
QATAR
Fasht
al-Dibel
Islet
Salwah
Khafus
Khor al-Udeid
SAUDI
ARABIA
BAHRAIN
UNITED ARAB
EMIRATES
Ras Laffan
Halal
Island
DUKHAN
Iranian
territorial
waters
Lusail City
ThePearl Island
SOUTH
PARS
NORTH
DOME
Al-Udeid
US military base
Main oil and gas pipelinesGas
Sea and land borders
Oil export port
Territory administered by Saudi Arabia
but claimed by the United Arab Emirates
Oil
Energy resources and infrastructure
Sources: Policy Watch no 525; The Washington Institute for Near East Policy; Bloomberg; Khaleej Times Online;
Petroleum Economist 2009 and 2010
From oil to business tourism
BY AKRAM BELKAÏD
Qatar, growth and
diversification
Continued on page 2
BRUNOBARBEY/MAGNUMPHOTO
ii SEPTEMBER 2011
LMDLe Monde diplomatique
QATAR SUPPLEMENT
LMDLe Monde diplomatique SEPTEMBER 2011 iii
QATAR SUPPLEMENT
the largest projects under way in Qatar is the
construction (managed by the UDC) of The
Pearl, an artificial island, a few kilometres
from Doha city centre. At a total cost of $10bn,
the island will consist of marinas, shopping
malls, restaurants, and residential zones. Once
completed, it will house 35,000 people in
18,000 units. The Pearl is mostly intended for
Qataris, but it will also be open to foreigners
who, by purchasing real estate there, will have
the right to a permanent residence permit.
The Pearl is an opportunity for Qatari
engineering firms to develop their expertise
and know-how. Qatar Cool, another UDC
subsidiary, is perfecting a system of “district
cooling” in Doha, meaning the centralised
distribution of air conditioning to several parts
of the new town.This air conditioning “factory”
is about to become a global benchmark in the
field. Several towns in the Gulf, all facing
rising energy bills caused by the increased
use of individual air conditioning units, have
shown interest in Qatar Cool’s technological
model.
Another new town project, Lusail City, is
being developed by the Lusail Real Estate
Development Company (LREDC). Situated
north of Doha, this new town will be completed
in 2019 and will have a total area of 35 sq
km, at an estimated cost of $5bn. It aims to
accommodate 200,000 residents, 170,000
workers and 80,000 visitors. It will have 22
hotels, 34 mosques, a business park, and several
golf courses. A tram line 22km long with 34
stops will connect the town’s various areas; it
will have two interchanges with a projected
railway crossing the emirate. A system of taxi
boats will link the new city to Doha airport and
the business area of West Bay. Lusail City will
have five stadiums, one of which, the Lusail
Iconic Stadium, will host the 2022 World Cup
final. And Qatari Diar, a government-owned
company, has acquired numerous tourist and
real estate properties in Europe, Oman, Sudan,
Morocco, Ethiopia, Tunisia, Yemen and Libya.
Qatar, which emits the most greenhouse
gases per inhabitant of any country, wants to
promote public transport. For an overall cost
of $35bn over 10 years, it plans to build four
underground lines, two tram lines, an automatic
underground line and a high-speed rail link
between Doha and Manama, Bahrain’s capital.
In addition, there will be several goods rail
lines, especially to Saudi Arabia. One of the
most important road infrastructure projects is
the 40km-long causeway between Qatar and
Bahrain, an emblematic project for the region
with an estimated cost of $5bn. The country
also plans to allocate $20bn to modernising
its current road network by building several
motorways. It also plans to expand maritime
activities: the port of Doha will be expanded
and modernised so as to become a platform for
logistics and regional re-export (budget $7bn).
The development of a financial hub in Doha
is another of Qatar’s strategic objectives.
The Qatar Financial Centre, created in 2005,
plans to revitalise the banking sector, which
already has around 20 banks, 16 of them
local. The world’s big financial institutions,
attracted by the country’s economic boom and
jockeying for position to finance projects, all
have a presence here. But above all, the Qatari
authorities hope Doha will become the world
capital of Islamic finance, to rival centres
such as Kuala Lumpur, Geneva, London and
Manama. University disciplines have been
created to train specialised executives in
this field, and the government has decided to
encourage the foundation of Islamic banks,
particularly through taxat concessions.
National Vision 2030 also positions other
sectors as strategic from the standpoint of
economic diversification. Qatar, which imports
95% of the food it consumes, is aiming at 70%
self-sufficiency by 2023. In 2008 the country’s
authorities formed the Qatar National Food
Security Programme, whose mission is to secure
food supplies by buying farmland abroad, but
also by launching agricultural businesses on
Qatari soil, notably the production of cereals
near the town of Al-Khor.
The country also plans to develop its expertise
in hydraulics. Currently dependent on its
desalination plants for 99% of its water, it aims
to acquire strategic reserves of drinking water.
It will therefore invest $2.8bn in building pre-
stressed concrete reservoirs (12 metres high,
with a diameter of 200 metres), interconnected
by pipelines with a total length of 183km. This
infrastructure will hold 32m cubic metres of
drinking water, the equivalent of seven days’
consumption for Qatar’s projected population
in 2040.
Diversifying the economy also means
investing abroad, via the Qatar Investment
Authority (QIA). This sovereign fund manages
assets with an estimated worth of $60bn in
almost 20 Middle Eastern, African, European
and North American countries. QIA already has
numerous partnerships with French companies:
it holds 7.6% of Lagardère, 3% of EADS (since
2008); 0.98% of Suez Environnement; 5.78%
of Vinci (in exchange for Cegelec and with the
approval of the European Commission); and
22.7% of the capital of the Société Fermière
du Casino Municipal de Cannes. QIA has
also just taken control of 70% of the capital
of French soccer club Paris Saint-Germain,
and holds 9.1% of the capital of Hochtief, the
German construction industry leader, which is
a stakeholder in the Lusail City project.
AKRAM BELKAÏD
Translated by Tom Genrich
I
n Qatar natural gas has its own town: Ras
Laffan. In this port on the Strait of Hormuz
80km north of the capital, natural gas is
processed, refined, frozen or burned, and
exported around the clock (1). People make their
livings from it. Over the last 15 years, Qatar
Petroleum (QP) and the big international energy
companies (Exxon Mobil, Shell, Total, Suez,
etc) have invested $70bn in building the world’s
largest gas-processing facility on this deserted
Gulf coast made up of sand and rocks. It has
seven liquefaction factories,  a refinery, a giant
steamcracker (producing 1.3m tons of ethylene a
year), three power plants, several petrochemical
units, and tanks 40 metres high and as wide as
football pitches. Fifty-four tankers, 20% of the
world’s fleet, service the port terminal. The first
cargo of petroleum products (gasoline, kerosene)
derived from gas at the Pearl Plant set off on 14
June 2011.The plant they came from was built by
Shell, and employs up to 52,000 workers, housed
in long rows of air-conditioned dormitories just
10 minutes from their workplace.
This gigantic effort is servicing the South
Pars/North Dome Field, the world’s largest gas
field, a geological rarity. Middle Eastern fields
contain predominantly oil with a little natural
gas, which for many years was burnt off in flares.
This is the exact opposite. The field contains
some oil (a high-quality oil called condensate,
highly sought after by the chemical industry) and
huge quantities of gas: 50,900bn cubic metres,
according to the International Energy Agency,
the third-largest natural gas reserve in the world
(14%), after those in Russia and Iran. It lies
under 65 metres of water and 3,000 metres of
sand, right in the middle of the Gulf.
South Pars/North Dome has two owners
who are strange bedfellows: Qatar, a Sunni
monarchy, and Iran, a Shia republic. Hence the
two names – the first for the Iranian section, the
second for the Qatari.
In 1971 the United Kingdom withdrew its
soldiers “west of Suez”, leaving its protégés in
the Gulf to their fate. At the same time, a team
of drillers from theAnglo-Dutch company Shell
found gas in North West Dome 1. The discovery
did not have a huge impact on the small emirate,
whichalreadyowned15bnbarrelsinoilreserves.
(The rights to all of Qatar’s onshore deposits
were held by a subsidiary of the powerful Iraq
Petroleum Company (IPC) from 1935 on.) Oil
exports, long postponed, only began at the end
of the 1940s: several hundred thousand barrels
of crude oil a day, which is how Qatar has a seat
on Opec.
Qatar later followed the example set by
Saddam Hussein, who in 1972 had nationalised
the IPC. In 1974 it assumed control of the IPC
subsidiary, the Qatar Petroleum Company; and in
1976 of the Shell Qatar Company, the discoverer
of North Dome, which had had exclusive rights
to the emirate’s maritime fields since 1952.
Almost10yearspassedbeforeexplorationofthe
field was back on the agenda. Development began
in 1984 as a modest enterprise aimed at supplying
gas to the small emirate, whose population was
growing rapidly. But Qatar’s domestic market,
and even the regional market, could not absorb
North Dome’s output, in contrast to those of
populous Iran, which consumed all it produced
and more. For Qatar, it became imperative to
export. But how? The large consumer markets
(Europe, North America and Asia) were far away.
It was impossible to use gas pipelines, as Russia
and Algeria did with Europe.
The alternative was to liquefy natural gas by
cooling it to about –160°C. This decreases its
volume drastically: 600 cubic metres of natural
gas become a single cubic metre of liquefied
natural gas (LNG), which can be shipped
around the world on specialised ships called
LNG carriers. On arrival, it is regasified and
pumped into the distribution networks.
Liquefaction is a complex technology. Only
a few big western and Japanese companies
control the whole process, from the well to
the gasification terminals. It is also expensive:
15% of the gas is lost during the operation,
and building a factory costs billions of dollars.
First the gas, which is carried by pipelines
from production areas, needs to be treated:
liquid condensate is separated; carbon dioxide
and sulphur components are extracted; the
gas is dehydrated; and all traces of mercury
are removed, because it is corrosive. The gas
is then cooled, and fractionated in a series of
distillations that isolate heavy hydrocarbons
and marketable propane and butane.
Qatar has chosen not to emulate liquefaction
pioneer Algeria, which finances the whole
process itself from well to factory, and bears
the commercial and financial risks too. The
Algerian National Society for Research,
Production, Transport, Transformation and
Marketing of Hydrocarbons (Sonatrach) has
built three liquefaction factories and exports
around 20bn cubic metres, drawn from its main
field, Hassi R’Mel: its 2,000bn cubic metres of
reserves are dwarfed by North Dome.
Qatar Petroleum (QP), the national company
fully owned by Qatar, decided to form
partnerships with foreign companies, like its
neighbours Abu Dhabi and Indonesia. In 1994
two years after the arrival of the first American
soldiers in the emirate (which now hosts a large
US base), Qatargas 1 was launched. QP’s partners
were two former members of the IPC before it
was nationalised, the US company Exxon and
France’sTotal (each with 10% of the capital), and
the Japanese firms Mitsui and Marubeni (with
a total of 15%). Qatar kept a majority holding.
Three liquefaction “trains” were built which, over
the course of several cooling cycles, pass the gas
through heat exchangers on a huge production
chain. LNG exports began in 1997. Qatargas 1
was followed by the identical Qatargas 2 (with
Exxon Mobil andTotal), 3 (with ConocoPhillips)
and 4 (with Shell).
In 2001 a new subsidiary of QP, the RasGas
Company Ltd, formed a partnership with Exxon
Mobil to create the world’s first fully integrated
LNG company, controlling extraction, storage,
liquefactionandexport.Rasgas1,then2,andthen
3, were launched to supply Asia (Korea, India,
Taiwan), Europe (Italy, Spain, Belgium) and the
US. Qatar had built up an enormous production
capacity of 77m tons when, in 2005, the decision
was taken to defer all new projects until 2014.
Officially, new drilling had led to concerns that
the North Dome was not a single field but was
divided into four, which would require major
work to evaluate the reserves. This is a subject on
which the world’s producers like to be discreet.
Inside the industry, another explanation
circulated. South Pars gas was said to be
seeping into the Qatari part of the field, which
was exploited more intensively because Iran,
subject to a US embargo, had trouble finding
partners: Total had given up all involvement in
Iran after strong political pressure.
The moratorium proved to have been a good
decision when, in 2008, the US massively
increased its own exploitation of unconventional
gas deposits, such as shale gas, effectively closing
its market to Middle Eastern LNG. US imports
dropped 40% over five years. The result was a
collapse of prices on LNG short-term markets: at
Henry Hub, the US entry point for LNG, its spot
price fell 50.4% between 2008 and 2010.
The self-sufficiency of the US market was
exploited by European and Asian clients, who
demanded lower prices. They had convincing
arguments. Deliveries intended for the US
were transferred to Asia and Europe: long-term
contracts (up to 25 years) fixed the volumes that
must be bought and set the prices, which were
indexed on petroleum products that could be
substituted for natural gas, or even on crude oil.
The price of LNG was rising with the price of
oil, while the world market in natural gas was
saturated. LNG had two prices: a short-term
spot price and a contract price. The differential
between them could reach $2-3 per million
British Thermal Units (2). Clients lobbied for
the lower spot price; producers defended the
higher contract price.
In 2008 producing countries tried to make
a united stand by forming the Gas Exporting
Countries Forum (3). Their goal was to maintain
pricesand,inthelongterm,toachievepriceparity
of oil and gas (4). Russia was the first country
to give in, with Gazprom accepting spot prices.
Over three years, 15% of its clients’ contractual
purchases benefited. The Algerian company
Sonatrach soon followed suit. Qatar’s enormous
liquefaction capacity is under-utilised, and the
plants built with Exxon Mobil specifically to
supply the US market were inaugurated just as
that market was closing to imports. QP’s search
for substitute outlets in Asia (Thailand, China)
and in Israel has led to conflicts with rivals, often
Russian or Indonesian. Its European clients
(Ente Nazionale Idrocarburi, E.ON, Suez, etc)
are keener than ever on comprehensive contract
renegotiations.
The fight for gas prices to be unpegged from
oil prices is far from over. Qatar, with its small
population and 50,000bn cubic metres of gas
reserves, can afford to wait. It may even become
the Saudi Arabia of natural gas, the producing
country that sets the prices because it is the last
resort.
Translated by Tom Genrich
(1) In 2011 Qatar is expected to earn almost $90bn from
hydrocarbon exports (two-thirds from gas, one-third from
crude oil).
(2) The British Thermal Unit is a unit of energy. It represents
the amount of heat needed to raise the temperature of one
British pound of water by one degree Fahrenheit at constant
atmospheric pressure.
(3) The Gas Exporting Countries Forum was informally
established in Tehran in 2001. At its seventh ministerial
meeting in Moscow in December 2008, the GECF
established a board and headquarters, in Doha (Qatar). The
forum has 11 members (Algeria, Bolivia, Egypt, Equatorial
Guinea, Iran, Libya, Nigeria, Qatar, Russia, Trinidad and
Tobago, Venezuela) and several observers or guests (Angola,
Kazakhstan, the Netherlands, Norway, and Yemen).
(4) Houari Barti, “Les pays exportateurs de gaz veulent une
parité avec le pétrole: en attendant le juste prix”, 20 April
2010, Le Quotidien d’Oran; www.lequotidien-oran.com/
index.php?news=5137077&archive_date=2010-04-20
Gas trump card
Qatar stands out in a region rich in oil, with the third largest natural gas reserves in the world, after Russia and Iran.This unique
position puts it among the big international energy players, but also means costly investments
BY JEAN-PIERRE SÉRÉNI
Jean-Pierre Séréni is a journalist and former director
of Nouvel Economiste, Paris
At a glance
Capital: Doha
Area: 11,586 sq km
Type of regime: monarchy
Population: 1.5 million
Percentage of under-25s: 34%
Percentage of foreigners in total
population: 86.5% (incl. 500,000 Indians;
350,000 Nepalese; 160,000 Filipinos)
Gross domestic product (GDP): $98.3bn
(2009)
GDP per capita: $69,754 (2009)
Unemployment: 0.5% (2007)
Adult literacy rate (over-15s): 95% (2009)
Literacy rate among 15-24-year-olds: 99%
(2007)
Life expectancy: 75.3 years (men);
77.3 years (women)
Sources: World Bank; United Nations
Q
atar’s diplomacy since 1995 seems
to have run counter to Thucydides’
maxim: “The strong do what they
can, and the weak suffer what they
must.” Qatar has demonstrated that even small
states can have a foreign policy.
The transformation of the Arab regional
system to the detriment of its larger states has
enabled smaller countries to take the initiative,
with the tacit approval of the great powers,
especially the United States. Egypt’s signature
of the Camp David accords in 1978, Saudi
Arabia’s appeal for US troops in 1990 and
Iraq’s defeat in 1991 significantly reduced these
states’ claim to the status of regional leader.
Forced to retreat within their own borders and
emphasise national identity and sovereignty
over transnational Arab identification and
solidarity, they have opened the field to other
players.
In this context, the editorial position of the
satellite TV network Al-Jazeera, based in the
capital Doha, has allowed Qatari foreign policy
to shape transnational Arab sentiment. Its
approach, which mixes pan-Arabism, Islamic
sensitivity and liberalism, has ensured Al-
Jazeera’s success and popularity. The Doha
authorities have turned this into diplomatic
leverage.
But this media influence conflicts with
ambiguities in the emirate’s foreign policy,
which Al-Jazeera has highlighted. When the
prime minister and foreign minister Sheikh
Hamad bin JaberAl-Thani appeared on the show
Bila Hodoud (Without Limits), its presenter,
Ahmad Mansour, summarised his activities in
plain language: “For many observers, Qatar’s
foreign policy lacks clarity. The country hosts
the biggest US military base outside the United
States, yet it also has privileged relations with
America’s enemies in the region, such as Iran
and Syria. When it had diplomatic relations
with Israel, it was also receptive to leaders of the
Islamic resistance movement Hamas ... It has
been reconciled for two years with its big sister,
Saudi Arabia, and has now begun squabbling
with the Egyptian regime, the largest Arab state
... In today’s broadcast, we will try to understand
the foundations of Qatar’s foreign policy, to see
for whose profit you play your part ... and which
powers allow you to hold this position” (1).
These policy fluctuations were illustrated by
the deterioration of diplomatic relations between
Qatar and Saudi Arabia in 2002. Relations later
improved and, on 6 July 2008, hit a new high with
the signing of an accord determining the exact
position of the border between the two countries,
an accord that was somewhat favourable to Qatar.
In return, the Saudi opposition disappeared
from Al-Jazeera’s screens (2). The Qatari
minister openly acknowledged that the media
battle between the countries had had a political
dimension (3), and declared there was no longer
any dispute between them.
Secret US embassy cables released by
WikiLeaks revealed that Al-Jazeera modified
its coverage of events several times to conform
to Qatar’s diplomatic line (4). But the alignment
is far from systematic, and the mechanism
ensuring the station’s success is a triangular
interaction between Qatari foreign policy, Al-
Jazeera journalists and Arab public opinion.
Public opinion is not only taken into account,
but prioritised over governing Arab elites, who
feel the network’s popularity intrudes into
their internal affairs and usurps their ability
to communicate with their citizens. Al-Jazeera
derives its legitimacy from its professionalism
and its role as a media relay for Arab opposition
movements. The Arab voice it represents puts
a permanent pressure on governments, which
they can no longer ignore.
Moroccoisaninterestingexample.Al-Jazeera
opened a regional office in Rabat in November
2006 to broadcast a daily news programme
specifically aimed at the Maghreb. Officially,
its presence was supposed to prove Morocco’s
liberal approach to freedom of expression. But
in October 2010 the office was closed down,
chiefly because of the amount of screen time
given to opposition movements, especially
Islamist ones. To everyone’s surprise, two days
before the constitutional referendum of 1 July
2011, the minister of communication, Khaled
al-Naceri, who had led a vitriolic campaign
against Al-Jazeera (5), gave it permission to
continue working in Morocco. In Egypt Al-
Jazeera became the media relay of the revolution
in February 2011, in spite of the closure of its
office on Tahrir Square. When the Mubarak
regime shut down the internet, it was Al-Jazeera
that disrupted that communication strategy.
Al-Jazeera’s regional influence can be seen
in the way that it can impose on Arab leaders
the idea that its presence on their territory
is less costly than its absence. Where it is
banned, it is usually also boycotted by official
representatives and transformed into a media
relay for the opposition. This can unbalance
relations within the media framework as the
Egyptian and Libyan examples demonstrate.
There are three main obstacles to fully
understanding the links between Al-Jazeera and
Qatariforeignpolicy.Thefirstismethodological.
To analyse the foreign policy initiatives of
Qatar using the sociologist Max Weber’s model
of a rational and bureaucratic nation-state is to
dislocate them from the network that Qatari
leaders have patiently created, and also from
ideological and clientelist loyalties, among
which national allegiance is the least important.
To consider Al-Jazeera a normal media outlet
is to disregard its political dimension, as a
substitute transnational political sphere (6) that
energises all national political spheres in the
Arab world.
The second obstacle is ideological: the refusal
to see Al-Jazeera as an Arab phenomenon
established in Qatar that transcends the logic
of the state. The third is psychological, as can
be seen from the embarrassment often caused
by the atypical conduct of Qatari leaders.
How does supporting Arab revolutions serve
the interests of the local dynastic regime? Or
defending Hamas against Israel but also against
Fatah? These are concessions made by leaders
to the Arab journalists they employ, and to
public opinion. They are the price Qatar has to
pay for sending warplanes to Libya or hosting
Israeli leaders in Doha.
Sheikh Hamad bin Jaber Al-Thani told his
Egyptian interviewer that Al-Jazeera was a
problem for the government and that Qatar would
be prepared to sell it: “We were offered $5bn two
years ago” (7). Possibly true. Or possibly not.
Translated by Tom Genrich
(1) “Qatar’s foreign policy”, Bila Hodoud, 24 June 2009;
www.aljazeera.net
(2) Robert F Worth, “Al-Jazeera No Longer Nips at Saudis”,
The NewYork Times, 4 January 2008.
(3) Mohammed El Oifi, “Le face-à-face Al-Arabiya/Al-
Jazeera: un duel diplomatico-médiatique”, Moyen-Orient,
Paris, June 2010.
(4) “WikiLeaks cables claim Al-Jazeera changed coverage
to suit Qatari foreign policy”, The Guardian, London, 6
December 2010.
(5) “Mustapha Alaoui [sic] est la chaîne Al-Jazira”,
Wabayn.com, 23 November 2010.
(6) See Mohammed El Oifi, “The Al-Jazeera effect”,
Le Monde diplomatique, English edition, May 2011.
(7) Bila Hodoud, op cit.
What to do about Al-Jazeera?
Al-Jazeera has great influence in the Arab world, now in ferment.And it is able to embarrass Qatar’s government
by contradicting its diplomatic moves
BY MOHAMMED EL OIFI
Mohammed El Oifi is a political scientist
Continued from page 1
From oil to business tourism
Ally of the United States
1868:  The Al-Thani family takes possession of Qatar, nominally part of the Ottoman Empire
since 1538.
1916:  The emirate becomes a British protectorate.
1940:  Discovery of oil; exploration starts in 1949.
3 September 1971:  Qatar proclaims independence.
August 1990:  Following the Iraqi invasion of Kuwait, the emirate allows international
coalition troops led by the US to be deployed on its soil.
1991:  Territorial dispute between Qatar and Bahrain over the Hawar Islands.
June 1992:  Defence agreement signed with US.
June 1995:  Khalifa Bin Hamad Al-Thani, in power since 1972, is toppled by his oldest son,
Hamad Bin Khalifa.
1996:  Satellite channel Al-Jazeera created.
May 1997:  Doha stock market opens.
November 2001:  Fourth ministerial meeting of the World Trade Organisation (WTO) takes
place in Qatar.
March-April 2003:  Qatar hosts the central command of the US forces in the Gulf during the
military campaign against Saddam Hussein.
29 April 2003:  A new constitution, the first since independence, is approved by referendum;
it comes into force in 2005.
19 March 2005:  A car bomb outside a British school in Doha kills one and injures 12.
2 December 2010:  The emirate is chosen to host the 2022 FIFA World Cup.
BRUNOBARBEY/MAGNUMPHOTO
Qatar_LMDen 2011

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Qatar_LMDen 2011

  • 1. LMDLe Monde diplomatique SEPTEMBER 2011 i QATAR SUPPLEMENT T he Qatari authorities are aware that hydrocarbon reserves will not last forever, and they intend to profit from the financial security that oil and natural gas exports have brought them (80% of external revenue, 60% of total revenue) by diversifying the economy. At the end of 2008, they launched a long-term development plan called National Vision 2030. This strategic programme officially began in March 2011 with its first phase spread over five years. It is divided into four main areas: international centres for the knowledge economy; a transport hub (air, sea and land); a regional financial centre; and tourism focused on business travel, symposiums and conferences. Qatar’s determination to diversify has also resulted in an ambitious industrialisation programme, especially in petrochemicals, the chemical industry, aluminium, steel, paper and fibre, agribusiness, and the liquefaction of natural gas (see Gas trump card). By 2016 Qatar will have spent an average of $15-18bn per year, around 40% of its annual expenditure, on financing investments in infrastructure and economic diversification. It has already spent almost $100bn under its 2005-10 five-year investment plan. On a macroeconomic level, to support the development of non-hydrocarbon business, Qatar wants to attract foreign investors and also encourage the creation of local small and medium enterprises (SMEs). The Qatar Industrial Manufacturing Company (QIMC), whichconsistsofsixsubsidiaries,hasthemission of promoting SMEs, if necessary by providing a part of their start-up capital and helping them to export the “Made in Qatar” label. It helps them to identify outlets in Gulf Cooperation Council countries, the Maghreb and Arab countries north of the Arabian Peninsula. The authorities have launched a credit-insurance programme, Al-Dhameen, to improve SMEs’ access to finance. A new agency responsible for SMEs will be created in 2011 under the leadership of the Supreme Council for Economic Affairs and Investments. The government has also comprehensively revised its protectionist legislation on foreign investors. Since 1 January 2010, corporate income tax has been set at the flat rate of 10% (before there were several rates ranging up to 35%). Similarly, since 1 February 2011, foreign investors can hold 100% of the capital of a Qatar-registered company, except in certain sectors such as banking, insurance, real estate andconsumergoodsimports,wherethemajority of the capital must be held by local operators. Finally, Doha has increased its efforts to counter inflation, whose record levels in 2007 (+13.8%) and 2008 (+15%) – due to the simultaneous rise in the prices of hydrocarbons, food and real estate – made the country less attractive. Prices rose by only 1% in 2010 and inflation should level off at 3% in 2011, indicating that it is under control. The 2022 FIFA World Cup was awarded to Qatar in December 2010, and the decision is already boosting economic activity. The emirate has committed to building nine new stadiums, and renovating and expanding the three existing ones, at a total cost of $4bn.The authorities have decided that this programme is to be headed by local companies in partnership with foreign operators, in the hope that it will revitalise local subcontracting in the civil engineering and construction sectors. One of Qatar’s main aims for the next 20 years is in the field of the knowledge economy. Under the leadership of the Qatar Foundation, the emirate has finished building Education City, intended to be a regional centre of excellence in higher education. Several North American and European universities and business schools – including Hautes Etudes Commerciales in Paris – have already established branch campuses there. Beyond this flagship project, the Qatar Foundation is also contributing to the development of the Qatar Science &Technology Park (QSTP), whose objective is to attract the R&D functions of large companies in the oil industry (Total, Exxon Mobil) or technology and IT (European Aeronautic Defence and Space [EADS], Apple, Microsoft, etc). Qatari firms have also begun to invest in R&D. Pragmatech, a recently created subsidiary of United Development Company (UDC), is making a name for itself on the international stage for its text processing, document summarising and referencing software. In June 2011 the Pan Arab Web Awards Academy in association with Microsoft and Business Software Alliance (BSA) awarded Pragmatech a prize for its high-quality web design. Alongside the knowledge economy, tourism in all its forms is a priority, despite competition from neighbours such as Dubai and the United Arab Emirates. Qatar plans to double its efforts in the hotel business to catch up with its neighbours and prepare for the World Cup. The country currently has 11,000 luxury rooms in 72 hotels, including 17 five-star and 13 four- star establishments. The authorities’ goal is to reach a total of 90,000 rooms by 2022. More tourism means more air travel. As well as the construction of a new $15bn airport in Doha, which will serve 24 million passengers in 2012 (and 50 million in 2015), the emirate’s business strategy is to make itself the obvious transit point for western tourists travelling to the Far East. The idea is that travellers flying with Qatar Airways will stop over for several days in Doha or one of the new towns currently under construction, on either their outward or their return journey. Qatar is in the midst of an air travel boom: the national airline announced in December 2010 that it had had its first profitable year and planned to go public in 2012. This step should finance the expansion of its fleet from 92 planes to 120 by 2013. Qatar also wants to position itself as a regional centre for medical tourism. In 2012 the $8bn Sidra Medical and Research Centre will open its doors. It is the region’s first hospital entirely equipped with digital machines, and aims to attract patients from Southeast Asia as well as the Gulf area. The growth of tourism is directly connected to the growth of the property sector. One of In just a few years Qatar has risen to the forefront of the global economic scene. Though the unexpected influence of the TV network Al-Jazeera can occasionally put Doha in a tight spot, the growth of this small Gulf emirate owes nothing to chance. Its rise is based on a long-term strategy that combines liberalism and free trade, development of its exceptional gas reserves and investment in new technologies Akram Belkaïd is a journalist 0 50 100 km Al- Ruwais Al-Khor Doha Al-Wakrah Oum Said Oum Bab Dukhan Al- Zubarah Hawar Islands (Bahrain) QATAR Fasht al-Dibel Islet Salwah Khafus Khor al-Udeid SAUDI ARABIA BAHRAIN UNITED ARAB EMIRATES Ras Laffan Halal Island DUKHAN Iranian territorial waters Lusail City ThePearl Island SOUTH PARS NORTH DOME Al-Udeid US military base Main oil and gas pipelinesGas Sea and land borders Oil export port Territory administered by Saudi Arabia but claimed by the United Arab Emirates Oil Energy resources and infrastructure Sources: Policy Watch no 525; The Washington Institute for Near East Policy; Bloomberg; Khaleej Times Online; Petroleum Economist 2009 and 2010 From oil to business tourism BY AKRAM BELKAÏD Qatar, growth and diversification Continued on page 2 BRUNOBARBEY/MAGNUMPHOTO
  • 2. ii SEPTEMBER 2011 LMDLe Monde diplomatique QATAR SUPPLEMENT LMDLe Monde diplomatique SEPTEMBER 2011 iii QATAR SUPPLEMENT the largest projects under way in Qatar is the construction (managed by the UDC) of The Pearl, an artificial island, a few kilometres from Doha city centre. At a total cost of $10bn, the island will consist of marinas, shopping malls, restaurants, and residential zones. Once completed, it will house 35,000 people in 18,000 units. The Pearl is mostly intended for Qataris, but it will also be open to foreigners who, by purchasing real estate there, will have the right to a permanent residence permit. The Pearl is an opportunity for Qatari engineering firms to develop their expertise and know-how. Qatar Cool, another UDC subsidiary, is perfecting a system of “district cooling” in Doha, meaning the centralised distribution of air conditioning to several parts of the new town.This air conditioning “factory” is about to become a global benchmark in the field. Several towns in the Gulf, all facing rising energy bills caused by the increased use of individual air conditioning units, have shown interest in Qatar Cool’s technological model. Another new town project, Lusail City, is being developed by the Lusail Real Estate Development Company (LREDC). Situated north of Doha, this new town will be completed in 2019 and will have a total area of 35 sq km, at an estimated cost of $5bn. It aims to accommodate 200,000 residents, 170,000 workers and 80,000 visitors. It will have 22 hotels, 34 mosques, a business park, and several golf courses. A tram line 22km long with 34 stops will connect the town’s various areas; it will have two interchanges with a projected railway crossing the emirate. A system of taxi boats will link the new city to Doha airport and the business area of West Bay. Lusail City will have five stadiums, one of which, the Lusail Iconic Stadium, will host the 2022 World Cup final. And Qatari Diar, a government-owned company, has acquired numerous tourist and real estate properties in Europe, Oman, Sudan, Morocco, Ethiopia, Tunisia, Yemen and Libya. Qatar, which emits the most greenhouse gases per inhabitant of any country, wants to promote public transport. For an overall cost of $35bn over 10 years, it plans to build four underground lines, two tram lines, an automatic underground line and a high-speed rail link between Doha and Manama, Bahrain’s capital. In addition, there will be several goods rail lines, especially to Saudi Arabia. One of the most important road infrastructure projects is the 40km-long causeway between Qatar and Bahrain, an emblematic project for the region with an estimated cost of $5bn. The country also plans to allocate $20bn to modernising its current road network by building several motorways. It also plans to expand maritime activities: the port of Doha will be expanded and modernised so as to become a platform for logistics and regional re-export (budget $7bn). The development of a financial hub in Doha is another of Qatar’s strategic objectives. The Qatar Financial Centre, created in 2005, plans to revitalise the banking sector, which already has around 20 banks, 16 of them local. The world’s big financial institutions, attracted by the country’s economic boom and jockeying for position to finance projects, all have a presence here. But above all, the Qatari authorities hope Doha will become the world capital of Islamic finance, to rival centres such as Kuala Lumpur, Geneva, London and Manama. University disciplines have been created to train specialised executives in this field, and the government has decided to encourage the foundation of Islamic banks, particularly through taxat concessions. National Vision 2030 also positions other sectors as strategic from the standpoint of economic diversification. Qatar, which imports 95% of the food it consumes, is aiming at 70% self-sufficiency by 2023. In 2008 the country’s authorities formed the Qatar National Food Security Programme, whose mission is to secure food supplies by buying farmland abroad, but also by launching agricultural businesses on Qatari soil, notably the production of cereals near the town of Al-Khor. The country also plans to develop its expertise in hydraulics. Currently dependent on its desalination plants for 99% of its water, it aims to acquire strategic reserves of drinking water. It will therefore invest $2.8bn in building pre- stressed concrete reservoirs (12 metres high, with a diameter of 200 metres), interconnected by pipelines with a total length of 183km. This infrastructure will hold 32m cubic metres of drinking water, the equivalent of seven days’ consumption for Qatar’s projected population in 2040. Diversifying the economy also means investing abroad, via the Qatar Investment Authority (QIA). This sovereign fund manages assets with an estimated worth of $60bn in almost 20 Middle Eastern, African, European and North American countries. QIA already has numerous partnerships with French companies: it holds 7.6% of Lagardère, 3% of EADS (since 2008); 0.98% of Suez Environnement; 5.78% of Vinci (in exchange for Cegelec and with the approval of the European Commission); and 22.7% of the capital of the Société Fermière du Casino Municipal de Cannes. QIA has also just taken control of 70% of the capital of French soccer club Paris Saint-Germain, and holds 9.1% of the capital of Hochtief, the German construction industry leader, which is a stakeholder in the Lusail City project. AKRAM BELKAÏD Translated by Tom Genrich I n Qatar natural gas has its own town: Ras Laffan. In this port on the Strait of Hormuz 80km north of the capital, natural gas is processed, refined, frozen or burned, and exported around the clock (1). People make their livings from it. Over the last 15 years, Qatar Petroleum (QP) and the big international energy companies (Exxon Mobil, Shell, Total, Suez, etc) have invested $70bn in building the world’s largest gas-processing facility on this deserted Gulf coast made up of sand and rocks. It has seven liquefaction factories,  a refinery, a giant steamcracker (producing 1.3m tons of ethylene a year), three power plants, several petrochemical units, and tanks 40 metres high and as wide as football pitches. Fifty-four tankers, 20% of the world’s fleet, service the port terminal. The first cargo of petroleum products (gasoline, kerosene) derived from gas at the Pearl Plant set off on 14 June 2011.The plant they came from was built by Shell, and employs up to 52,000 workers, housed in long rows of air-conditioned dormitories just 10 minutes from their workplace. This gigantic effort is servicing the South Pars/North Dome Field, the world’s largest gas field, a geological rarity. Middle Eastern fields contain predominantly oil with a little natural gas, which for many years was burnt off in flares. This is the exact opposite. The field contains some oil (a high-quality oil called condensate, highly sought after by the chemical industry) and huge quantities of gas: 50,900bn cubic metres, according to the International Energy Agency, the third-largest natural gas reserve in the world (14%), after those in Russia and Iran. It lies under 65 metres of water and 3,000 metres of sand, right in the middle of the Gulf. South Pars/North Dome has two owners who are strange bedfellows: Qatar, a Sunni monarchy, and Iran, a Shia republic. Hence the two names – the first for the Iranian section, the second for the Qatari. In 1971 the United Kingdom withdrew its soldiers “west of Suez”, leaving its protégés in the Gulf to their fate. At the same time, a team of drillers from theAnglo-Dutch company Shell found gas in North West Dome 1. The discovery did not have a huge impact on the small emirate, whichalreadyowned15bnbarrelsinoilreserves. (The rights to all of Qatar’s onshore deposits were held by a subsidiary of the powerful Iraq Petroleum Company (IPC) from 1935 on.) Oil exports, long postponed, only began at the end of the 1940s: several hundred thousand barrels of crude oil a day, which is how Qatar has a seat on Opec. Qatar later followed the example set by Saddam Hussein, who in 1972 had nationalised the IPC. In 1974 it assumed control of the IPC subsidiary, the Qatar Petroleum Company; and in 1976 of the Shell Qatar Company, the discoverer of North Dome, which had had exclusive rights to the emirate’s maritime fields since 1952. Almost10yearspassedbeforeexplorationofthe field was back on the agenda. Development began in 1984 as a modest enterprise aimed at supplying gas to the small emirate, whose population was growing rapidly. But Qatar’s domestic market, and even the regional market, could not absorb North Dome’s output, in contrast to those of populous Iran, which consumed all it produced and more. For Qatar, it became imperative to export. But how? The large consumer markets (Europe, North America and Asia) were far away. It was impossible to use gas pipelines, as Russia and Algeria did with Europe. The alternative was to liquefy natural gas by cooling it to about –160°C. This decreases its volume drastically: 600 cubic metres of natural gas become a single cubic metre of liquefied natural gas (LNG), which can be shipped around the world on specialised ships called LNG carriers. On arrival, it is regasified and pumped into the distribution networks. Liquefaction is a complex technology. Only a few big western and Japanese companies control the whole process, from the well to the gasification terminals. It is also expensive: 15% of the gas is lost during the operation, and building a factory costs billions of dollars. First the gas, which is carried by pipelines from production areas, needs to be treated: liquid condensate is separated; carbon dioxide and sulphur components are extracted; the gas is dehydrated; and all traces of mercury are removed, because it is corrosive. The gas is then cooled, and fractionated in a series of distillations that isolate heavy hydrocarbons and marketable propane and butane. Qatar has chosen not to emulate liquefaction pioneer Algeria, which finances the whole process itself from well to factory, and bears the commercial and financial risks too. The Algerian National Society for Research, Production, Transport, Transformation and Marketing of Hydrocarbons (Sonatrach) has built three liquefaction factories and exports around 20bn cubic metres, drawn from its main field, Hassi R’Mel: its 2,000bn cubic metres of reserves are dwarfed by North Dome. Qatar Petroleum (QP), the national company fully owned by Qatar, decided to form partnerships with foreign companies, like its neighbours Abu Dhabi and Indonesia. In 1994 two years after the arrival of the first American soldiers in the emirate (which now hosts a large US base), Qatargas 1 was launched. QP’s partners were two former members of the IPC before it was nationalised, the US company Exxon and France’sTotal (each with 10% of the capital), and the Japanese firms Mitsui and Marubeni (with a total of 15%). Qatar kept a majority holding. Three liquefaction “trains” were built which, over the course of several cooling cycles, pass the gas through heat exchangers on a huge production chain. LNG exports began in 1997. Qatargas 1 was followed by the identical Qatargas 2 (with Exxon Mobil andTotal), 3 (with ConocoPhillips) and 4 (with Shell). In 2001 a new subsidiary of QP, the RasGas Company Ltd, formed a partnership with Exxon Mobil to create the world’s first fully integrated LNG company, controlling extraction, storage, liquefactionandexport.Rasgas1,then2,andthen 3, were launched to supply Asia (Korea, India, Taiwan), Europe (Italy, Spain, Belgium) and the US. Qatar had built up an enormous production capacity of 77m tons when, in 2005, the decision was taken to defer all new projects until 2014. Officially, new drilling had led to concerns that the North Dome was not a single field but was divided into four, which would require major work to evaluate the reserves. This is a subject on which the world’s producers like to be discreet. Inside the industry, another explanation circulated. South Pars gas was said to be seeping into the Qatari part of the field, which was exploited more intensively because Iran, subject to a US embargo, had trouble finding partners: Total had given up all involvement in Iran after strong political pressure. The moratorium proved to have been a good decision when, in 2008, the US massively increased its own exploitation of unconventional gas deposits, such as shale gas, effectively closing its market to Middle Eastern LNG. US imports dropped 40% over five years. The result was a collapse of prices on LNG short-term markets: at Henry Hub, the US entry point for LNG, its spot price fell 50.4% between 2008 and 2010. The self-sufficiency of the US market was exploited by European and Asian clients, who demanded lower prices. They had convincing arguments. Deliveries intended for the US were transferred to Asia and Europe: long-term contracts (up to 25 years) fixed the volumes that must be bought and set the prices, which were indexed on petroleum products that could be substituted for natural gas, or even on crude oil. The price of LNG was rising with the price of oil, while the world market in natural gas was saturated. LNG had two prices: a short-term spot price and a contract price. The differential between them could reach $2-3 per million British Thermal Units (2). Clients lobbied for the lower spot price; producers defended the higher contract price. In 2008 producing countries tried to make a united stand by forming the Gas Exporting Countries Forum (3). Their goal was to maintain pricesand,inthelongterm,toachievepriceparity of oil and gas (4). Russia was the first country to give in, with Gazprom accepting spot prices. Over three years, 15% of its clients’ contractual purchases benefited. The Algerian company Sonatrach soon followed suit. Qatar’s enormous liquefaction capacity is under-utilised, and the plants built with Exxon Mobil specifically to supply the US market were inaugurated just as that market was closing to imports. QP’s search for substitute outlets in Asia (Thailand, China) and in Israel has led to conflicts with rivals, often Russian or Indonesian. Its European clients (Ente Nazionale Idrocarburi, E.ON, Suez, etc) are keener than ever on comprehensive contract renegotiations. The fight for gas prices to be unpegged from oil prices is far from over. Qatar, with its small population and 50,000bn cubic metres of gas reserves, can afford to wait. It may even become the Saudi Arabia of natural gas, the producing country that sets the prices because it is the last resort. Translated by Tom Genrich (1) In 2011 Qatar is expected to earn almost $90bn from hydrocarbon exports (two-thirds from gas, one-third from crude oil). (2) The British Thermal Unit is a unit of energy. It represents the amount of heat needed to raise the temperature of one British pound of water by one degree Fahrenheit at constant atmospheric pressure. (3) The Gas Exporting Countries Forum was informally established in Tehran in 2001. At its seventh ministerial meeting in Moscow in December 2008, the GECF established a board and headquarters, in Doha (Qatar). The forum has 11 members (Algeria, Bolivia, Egypt, Equatorial Guinea, Iran, Libya, Nigeria, Qatar, Russia, Trinidad and Tobago, Venezuela) and several observers or guests (Angola, Kazakhstan, the Netherlands, Norway, and Yemen). (4) Houari Barti, “Les pays exportateurs de gaz veulent une parité avec le pétrole: en attendant le juste prix”, 20 April 2010, Le Quotidien d’Oran; www.lequotidien-oran.com/ index.php?news=5137077&archive_date=2010-04-20 Gas trump card Qatar stands out in a region rich in oil, with the third largest natural gas reserves in the world, after Russia and Iran.This unique position puts it among the big international energy players, but also means costly investments BY JEAN-PIERRE SÉRÉNI Jean-Pierre Séréni is a journalist and former director of Nouvel Economiste, Paris At a glance Capital: Doha Area: 11,586 sq km Type of regime: monarchy Population: 1.5 million Percentage of under-25s: 34% Percentage of foreigners in total population: 86.5% (incl. 500,000 Indians; 350,000 Nepalese; 160,000 Filipinos) Gross domestic product (GDP): $98.3bn (2009) GDP per capita: $69,754 (2009) Unemployment: 0.5% (2007) Adult literacy rate (over-15s): 95% (2009) Literacy rate among 15-24-year-olds: 99% (2007) Life expectancy: 75.3 years (men); 77.3 years (women) Sources: World Bank; United Nations Q atar’s diplomacy since 1995 seems to have run counter to Thucydides’ maxim: “The strong do what they can, and the weak suffer what they must.” Qatar has demonstrated that even small states can have a foreign policy. The transformation of the Arab regional system to the detriment of its larger states has enabled smaller countries to take the initiative, with the tacit approval of the great powers, especially the United States. Egypt’s signature of the Camp David accords in 1978, Saudi Arabia’s appeal for US troops in 1990 and Iraq’s defeat in 1991 significantly reduced these states’ claim to the status of regional leader. Forced to retreat within their own borders and emphasise national identity and sovereignty over transnational Arab identification and solidarity, they have opened the field to other players. In this context, the editorial position of the satellite TV network Al-Jazeera, based in the capital Doha, has allowed Qatari foreign policy to shape transnational Arab sentiment. Its approach, which mixes pan-Arabism, Islamic sensitivity and liberalism, has ensured Al- Jazeera’s success and popularity. The Doha authorities have turned this into diplomatic leverage. But this media influence conflicts with ambiguities in the emirate’s foreign policy, which Al-Jazeera has highlighted. When the prime minister and foreign minister Sheikh Hamad bin JaberAl-Thani appeared on the show Bila Hodoud (Without Limits), its presenter, Ahmad Mansour, summarised his activities in plain language: “For many observers, Qatar’s foreign policy lacks clarity. The country hosts the biggest US military base outside the United States, yet it also has privileged relations with America’s enemies in the region, such as Iran and Syria. When it had diplomatic relations with Israel, it was also receptive to leaders of the Islamic resistance movement Hamas ... It has been reconciled for two years with its big sister, Saudi Arabia, and has now begun squabbling with the Egyptian regime, the largest Arab state ... In today’s broadcast, we will try to understand the foundations of Qatar’s foreign policy, to see for whose profit you play your part ... and which powers allow you to hold this position” (1). These policy fluctuations were illustrated by the deterioration of diplomatic relations between Qatar and Saudi Arabia in 2002. Relations later improved and, on 6 July 2008, hit a new high with the signing of an accord determining the exact position of the border between the two countries, an accord that was somewhat favourable to Qatar. In return, the Saudi opposition disappeared from Al-Jazeera’s screens (2). The Qatari minister openly acknowledged that the media battle between the countries had had a political dimension (3), and declared there was no longer any dispute between them. Secret US embassy cables released by WikiLeaks revealed that Al-Jazeera modified its coverage of events several times to conform to Qatar’s diplomatic line (4). But the alignment is far from systematic, and the mechanism ensuring the station’s success is a triangular interaction between Qatari foreign policy, Al- Jazeera journalists and Arab public opinion. Public opinion is not only taken into account, but prioritised over governing Arab elites, who feel the network’s popularity intrudes into their internal affairs and usurps their ability to communicate with their citizens. Al-Jazeera derives its legitimacy from its professionalism and its role as a media relay for Arab opposition movements. The Arab voice it represents puts a permanent pressure on governments, which they can no longer ignore. Moroccoisaninterestingexample.Al-Jazeera opened a regional office in Rabat in November 2006 to broadcast a daily news programme specifically aimed at the Maghreb. Officially, its presence was supposed to prove Morocco’s liberal approach to freedom of expression. But in October 2010 the office was closed down, chiefly because of the amount of screen time given to opposition movements, especially Islamist ones. To everyone’s surprise, two days before the constitutional referendum of 1 July 2011, the minister of communication, Khaled al-Naceri, who had led a vitriolic campaign against Al-Jazeera (5), gave it permission to continue working in Morocco. In Egypt Al- Jazeera became the media relay of the revolution in February 2011, in spite of the closure of its office on Tahrir Square. When the Mubarak regime shut down the internet, it was Al-Jazeera that disrupted that communication strategy. Al-Jazeera’s regional influence can be seen in the way that it can impose on Arab leaders the idea that its presence on their territory is less costly than its absence. Where it is banned, it is usually also boycotted by official representatives and transformed into a media relay for the opposition. This can unbalance relations within the media framework as the Egyptian and Libyan examples demonstrate. There are three main obstacles to fully understanding the links between Al-Jazeera and Qatariforeignpolicy.Thefirstismethodological. To analyse the foreign policy initiatives of Qatar using the sociologist Max Weber’s model of a rational and bureaucratic nation-state is to dislocate them from the network that Qatari leaders have patiently created, and also from ideological and clientelist loyalties, among which national allegiance is the least important. To consider Al-Jazeera a normal media outlet is to disregard its political dimension, as a substitute transnational political sphere (6) that energises all national political spheres in the Arab world. The second obstacle is ideological: the refusal to see Al-Jazeera as an Arab phenomenon established in Qatar that transcends the logic of the state. The third is psychological, as can be seen from the embarrassment often caused by the atypical conduct of Qatari leaders. How does supporting Arab revolutions serve the interests of the local dynastic regime? Or defending Hamas against Israel but also against Fatah? These are concessions made by leaders to the Arab journalists they employ, and to public opinion. They are the price Qatar has to pay for sending warplanes to Libya or hosting Israeli leaders in Doha. Sheikh Hamad bin Jaber Al-Thani told his Egyptian interviewer that Al-Jazeera was a problem for the government and that Qatar would be prepared to sell it: “We were offered $5bn two years ago” (7). Possibly true. Or possibly not. Translated by Tom Genrich (1) “Qatar’s foreign policy”, Bila Hodoud, 24 June 2009; www.aljazeera.net (2) Robert F Worth, “Al-Jazeera No Longer Nips at Saudis”, The NewYork Times, 4 January 2008. (3) Mohammed El Oifi, “Le face-à-face Al-Arabiya/Al- Jazeera: un duel diplomatico-médiatique”, Moyen-Orient, Paris, June 2010. (4) “WikiLeaks cables claim Al-Jazeera changed coverage to suit Qatari foreign policy”, The Guardian, London, 6 December 2010. (5) “Mustapha Alaoui [sic] est la chaîne Al-Jazira”, Wabayn.com, 23 November 2010. (6) See Mohammed El Oifi, “The Al-Jazeera effect”, Le Monde diplomatique, English edition, May 2011. (7) Bila Hodoud, op cit. What to do about Al-Jazeera? Al-Jazeera has great influence in the Arab world, now in ferment.And it is able to embarrass Qatar’s government by contradicting its diplomatic moves BY MOHAMMED EL OIFI Mohammed El Oifi is a political scientist Continued from page 1 From oil to business tourism Ally of the United States 1868:  The Al-Thani family takes possession of Qatar, nominally part of the Ottoman Empire since 1538. 1916:  The emirate becomes a British protectorate. 1940:  Discovery of oil; exploration starts in 1949. 3 September 1971:  Qatar proclaims independence. August 1990:  Following the Iraqi invasion of Kuwait, the emirate allows international coalition troops led by the US to be deployed on its soil. 1991:  Territorial dispute between Qatar and Bahrain over the Hawar Islands. June 1992:  Defence agreement signed with US. June 1995:  Khalifa Bin Hamad Al-Thani, in power since 1972, is toppled by his oldest son, Hamad Bin Khalifa. 1996:  Satellite channel Al-Jazeera created. May 1997:  Doha stock market opens. November 2001:  Fourth ministerial meeting of the World Trade Organisation (WTO) takes place in Qatar. March-April 2003:  Qatar hosts the central command of the US forces in the Gulf during the military campaign against Saddam Hussein. 29 April 2003:  A new constitution, the first since independence, is approved by referendum; it comes into force in 2005. 19 March 2005:  A car bomb outside a British school in Doha kills one and injures 12. 2 December 2010:  The emirate is chosen to host the 2022 FIFA World Cup. BRUNOBARBEY/MAGNUMPHOTO