Why Qatar boycott could be a boon for Asian countries

The Saudi-led quartet is not stopping third parties from doing business with Qatar, creating business opportunities – by land, sea and air – from India to Singapore

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The blanket blockade of Doha may benefit some of its Asian trade partners. Photo: EPA

Published: 10:47am, 25 Nov 2017Updated: 10:47am, 25 Nov 2017

There’s a silver lining for Asian countries in the six-month old crisis in the Persian Gulf that pits a UAE-Saudi-led alliance against Qatar. That is as long as Saudi Arabia and the United Arab Emirates shy away from attempting to harness their financial muscle to shore up lagging international support for their diplomatic and economic boycott of the idiosyncratic oil- and gas-rich state.

Asian nations, including India, Pakistan, Sri Lanka, Bangladesh, Indonesia and the Philippines, whose nationals populate the Gulf’s labour force, have already reaped initial benefits with Qatar, eager to put its best foot forward, significantly reforming its controversial kafala or labour sponsorship regime that required workers to receive permission from employers to change jobs or, in some cases, leave the country.

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Qatar recently became the first Gulf state to introduce a minimum wage, albeit criticised by human rights groups for being about US$200 (HK$1,560) a month – well below what labourers can earn in their home countries.

It has also sought to improve workers’ rights and committed to improving their living conditions.

Foreign construction workers in Doha. Photo: EPA

Qatar was under pressure to reform the kafala system long before the crisis erupted, but the dispute with its neighbours – who have accused Qatar of sponsoring terrorism, an accusation it vehemently denies – strengthened its interest in being seen as doing the right thing.

The UAE and Saudi Arabia, along with Egypt and Bahrain, insist that Qatar unconditionally break its ties to mostly Islamist political groups, including the Muslim Brotherhood, adhere to Saudi and UAE foreign policy, reduce relations with Iran, close the Al Jazeera television network, and accept monitoring of its compliance. Qatar has rejected any infringement of its sovereignty and called for a negotiated solution.

The closing of Al Jazeera is part of the demands by the Saudi-led alliance. Photo: Reuters

The boycott as a result of its refusal to accept the demands has forced Qatar to restructure trade relationships, diversify sources for goods and services, create alternative port alliances, and recalibrate the strategy of its national carrier, Qatar Airways.