Questions raised as Qatar capitalises on Brexit
Promises of Qatari investment that go unfulfilled are likely to place a financial burden on both Qatar and Britain.
A question of timing. British Prime Minister Theresa May (R) greets Qatari Prime Minister Sheikh Abdullah bin Nasser bin Khalifa al-Thani during the Qatar-UK Business and Investment Forum in Birmingham, on March 28th. (AFP)
2017/04/02 Issue: 100 Page: 10
London - Qatar’s pledge to invest $6.2 billion in the United Kingdom was immediately followed by logistical questions from British politicians and economists about the outlay.
Doha announced its significant investment plans at the recent Qatar-UK Business and Investment Forum in London and Birmingham. Questions over the investment’s viability were immediately raised after Qatar failed to meet previous financial pledges.
Britain’s Financial Times published a report warning that Qatar was not always a reliable investment partner. “Previous promises of Qatari investment in UK infrastructure have not always materialised,” the newspaper said.
In 2013, Britain and Qatar discussed investment proposals reaching $10 billion, including in the Hinckley Point nuclear reactor and the Thames super-sewer. Both projects went ahead with no Qatari investment.
Even when Qatari investment has come through, many projects have been mired in complications and delays. Doha’s investments in other British infrastructure, such as the Chelsea Barracks project in London, have also drawn criticism. London’s Evening Standard newspaper described the project as “one of the most protracted and controversial property sagas of recent decades”.
Qatar’s investment in London’s high-end Harrods department store has also faced public criticism. In January, demonstrators blocked doorways and set off smoke bombs, protesting the store’s withholding of service charges from the staff. Several British unions criticised Harrods’ policy of keeping money that would normally go directly to the waiting and kitchen staff at Harrods’ cafés and restaurants.
Economic analysts in Britain questioned the timing of Qatar’s announcement, which came in the same week that the British government triggered Article 50 — a 2-year process to leave the European Union. With Britain’s path to Brexit unclear, and with the existence of promised trade deals that can only be officially negotiated after the exit from the European Union, some wondered about the effects of Qatar’s promised investments.
Critics said the pledge, which is being portrayed by the British government as a major post-Brexit victory, could cause further political instability and division in the country at a time when Britain is dealing with calls for a Scottish referendum on independence.
The announcement is generally thought to reflect Doha’s political agenda. In a time of major transformation in the international sphere, Qatar is seeking to secure closer financial ties with Britain and Russia, they said. Qatar is also reportedly approaching the Trump administration on finance and investment matters.
However, Qatar’s attempts to finance its foreign policy objectives is likely to fall short, particularly given the nature of Qatar’s promised investment, which does not represent a major component of the British economy. Promises of Qatari investment that go unfulfilled are likely to place a financial burden on both Qatar and Britain.
British government statistics indicate that Qatar is United Kingdom’s third largest export market in the Middle East and accounts for $43.5 billion of existing investment in Britain. Bilateral trade is valued at more than $6.2 billion per year. In 2015, British exports to Qatar totalled $3.23 billion, with Qatar exports to Britain at $3.35 billion.