The Qatar Blockade: A Reflection

To all my friends and relatives: thank you for all your love, care, prayers and concerns.  We are all well, safe and enjoying food like always in Qatar. There are no empty shelves in the grocery stores and everything is on routine. We have food and lots of it!  

To everyone who is wondering what is going on: I am writing at a time when Qatar is facing a blockade from the neighboring GCC countries; Saudi Arabia, UAE, Bahrain and Egypt.  On June 5th, the 12th fasting day of Ramadan, the country woke up to the news that Saudi Arabia, UAE, Bahrain and Egypt are cutting ties with Qatar. Qatar stands accused of funding terrorism and meddling with the internal affairs of the four neighboring countries. Soon thereafter other countries followed suit: Yemen, Maldives, Mauritania, Eastern Libyan government, Senegal and Comoros. Others such as Jordan downgraded diplomatic relations with Qatar. Kuwait and Oman stayed neutral with Kuwait leading the mediation efforts to resolve the crisis.

At the time, everyone thought that like the rift in 2014, this conflict too will resolve itself. So the closure of land border, air space and sea will really not last that long.

But matters took a different turn.

The conflict evolved and saw announcement from Saudi Arabia, UAE and Bahrain calling their citizens to return from Qatar within 14 days and for Qataris to leave these countries and head back to Qatar.  On the other hand, there were reports that the grocery stores’ shelves are empty as people hurried and stocked up on necessities like water, milk, chicken and rice.

Since June 05th, the crisis hasn’t abated and the political and economic blockade continues. The 13 demands list issues by the four Arab states: including shutting down Al Jazeera, scaling down relations with Iran and shut down the Turkish army base, stands rejected by Qatar. The mediation efforts to resolve the crisis continues from US, Kuwait and Oman.

As the crisis continues and evolves, what have I learned from the current blockade?

A crisis in any form, in any area, whether personal or professional, not only brings changes in life, but also, changes one’s perception and thoughts on various matters.

Qatar is a country where I was born and live to this day. It is my home where I’ve had my beautiful childhood and teenage years. Whenever asked where I’m from, my answer is Qatar (followed by an explanation in a few seconds that I’m Pakistani, but was born and raised in Qatar).

The crisis when it began was a shock. The first thing coming to mind was the 1990 Gulf War scenario. The fear, the anxiety and the confusion all at once raced simultaneously in mind. We, the family, were here in Qatar then and now. We didn’t leave because there was no question at all leaving my dad behind alone. As mom says, “we stay together and  go through every single thing together”.

But in times of political and economic crisis, there are always human costs involved. Qatar was no different. According to Qatar’s National Human Rights Committee (NHRC) “at least 13,314 people were directly affected by anti-Qatar measures” with the violations including family separations, right to travel, education, work, freedom of opinion, residency and ownership. It sent shivers down my spine. I realized how we take family relations and friends for granted. We don’t even think what if , one day, they are all taken away from us. It made me highly grateful to be with my family and to have relations in my life.

The blockade via land, airspace and sea meant that many goods would no longer be available.  Products like Almarai milk, butter and other goods from Saudi, UAE and Bahrain would be unavailable during this crisis. The initial scenario where the stores faced empty racks was true because people panicked and ensured that basic necessities like rice, chicken and milk were available at least for children. Qatar government assured the residents that it had taken measures to ensure that normal life routine continues in the country and there is no need to panic. Turkey and Iran both countries sent food both via plane and sea.

What amazed me was how as consumers we are all highly adaptable to situations. We teach and study in economics that given the change in factors, consumers substitute from one good to another. In times of crisis, that holds to be absolutely true. We didn’t have Almarai milk, but, we bought Turkish milk (and are amazed how actually good it is!). I love Dandy yogurt (made in Qatar), but Turkish yogurt is good. We, the consumers, quickly shifted our preferences to other brands, which makes me wonder when this crisis is over would we ever return to Almarai milk and yogurt?

Prices did spike as expected. Now as goods arrive via sea, the prices will start to go down.

I also highly appreciate mom’s small vegetable garden here. While there was a shortage of mint and coriander leaves for some time, we were enjoying fresh mint, tomatoes and chillies from our Mama Khan’s little vegetable garden 🙂 (she even gave fresh mint leaves to her friends!) The idea of a farm-house really is not that bad 🙂 Maybe in future, I might go for a farm-house than a city life (just a thought).

The critical lesson learned in this crisis is: leadership,patience and tolerance.

The Qatar government continues to bear all the costs ensuring that normal life in Qatar continues for all the residents. And indeed, the normal life continues.

Bahrain and UAE banned people from publishing expressions of sympathy towards Qatar. Sympathizing with Qatar in UAE and Bahrain was a cyber crime, with the offenders facing fines of up to $136,000 and up to 15 years of jail term. While the boycotting countries’ media said a lot on social media, Qatar government requested all its residents to take the higher road by not insulting or saying anything negative about the boycotting countries and their leaders and to express their opinions in a peaceful manner on social media. This is tolerance and what we have seen here is a real life example.

This is true leadership!   Every one has the right to their opinion and there are always agreements and disagreement. Successful is the one who is patient, listens to others and presents arguments in a peaceful, constructive and respectable manner. The Qatari leadership is a prime example of this.

Despite the blockade from neighboring countries, Qatar did not expel their citizens and assured them that they are welcome to stay (even when it could have taken the same path).  Despite the tense environment, we see patience and the leadership continuous, non-stop effort to resolve the crisis through constructive dialogue. It has won the people’s hearts and support! The “Tamim Al Majd” (meaning “Tamim the glorious”) is viral. From car stickers to murals to posters on residences, the strong support and love is evident. Its’ in the air! It brought everyone together under one roof. It has strengthened the unity of a nation.

The crisis has taught me strong positive lessons. I always am grateful for things, but now, I’m highly grateful for the small things in life which we take for granted. I have many times thought the in today’s time values don’t matter. Wrong. Values, how you conduct yourself in life and how you treat others does matter for they form real human connections that are not broken easily. I have learned to be hopeful, even in tense times and remain optimistic.

I am thankful for everything in life.

Unfolding the Brexit

“UK votes to leave EU” – the glaring headline that graced my Facebook news feed on Friday 24 June 2016. The Brexit has happened and chaos follows the financial markets worldwide.

The shocking result stunned the political establishments worldwide. Hysteria took over as the shock reverberated through the financial markets across the global economy. According to Time magazinethe pound sterling slid dramatically against the dollar……lost about 12% of its value against the dollar in the course of 6 hours, marking the steepest plunge on record”

The result has shocked the global economy and many predictions have begun in the wake of UK departure from EU. It is a historic and an unprecedented event. For UK to leave European Union after 43 years is no laughing matter. While the media, analysts, financial and political figures discuss the fallout of the result, it is important to note that in the time of economics crisis, any policy decision in haste has the potential to further complicate a tense situation. In times of economic chaos, it is critical to watch how the financial markets unfold and let the market take its full course. Economies act very differently. During crisis, political, economical and social issues could become a toxic cocktail, which could have  either desirable or disastrous results for all.

What is required at this time is to understand the underlying currents that gave way to the Brexit and the stakes now involved with the result. Some thoughts to consider.

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This is not the first time for European Union to face a crisis. Before European Union was formed with Euro as the currency, the inception of the idea had dealt with hard-core feelings of the member countries’ fearing loss of sovereignty and voice should European integration went ahead. The integration went ahead and benefits realized were larger than the costs. However, the underlying faults (political resentments, different political and economic motives of member states) remained, especially, as Germany was seen the power player in the Eurozone. The nationalistic seeds were always present.

The US financial crisis of late 2008-2009 cracked open the faults within the EU. The Greek financial crisis unraveled and shook the Union at its core as Euro came under threat. Four years ago, I had written a post on Greek crisis and how the future of the Euro zone is bleak. At the time then, the fear of Greece exiting the Euro was very much real as there was a prediction that the exit would be catastrophic as the crisis would spread to weaker economies such as Italy, Spain, Ireland and Portugal and these economies will also think of leaving Eurozone. The very existence of Union was under threat. There was upheaval in the economies as the austerity policies took effect.  The political resentments resurfaced as Germany was reluctant to help out Greece on  such a massive platform. The German population believed that Eurozone will be better off if Greece were to exit. The same sentiment also existed on the British side, although, it was mute. Greece continues to reel not only from the conditions of the bailout, but also, from the policies it has had to take to get its house back in order.

On the other side, the Middle East crisis began to unravel in full force as ISIS took over key cities in Iraq and Syria while Libya and Tunisia continued to be politically unstable. The mass refugee exodus from these countries  due to terrorism became the migrant crisis of Europe. To this day, more and more migrants arrive in Greece and Italy only to find their way and travel to other European member countries for a stable and secure life. Germany, Netherlands, Sweden, France became hosts to refugees and so did Britain. The Eurozone crisis, the migrant crisis and the stand with Russia over Ukraine became a deadly combination.

As the European Union faced these scenarios, Britain faced its own set of problems. Scotland’s independence referendum in 2014, economy facing recession, surging immigration, higher tuition fees and students protests – the bitter cocktail that politicians are now facing. The surging immigration gave way to fears of loss of identity. At the EU level, it was the loss of sovereignty with Brussels seen as the  ultimate power. On the other hand, the austerity economic policies slowed economic growth, causing resentments among the population that faces the challenges of unemployment and higher prices.

Under such circumstances, it is not surprising to see countries taking protectionist measures, whether in the form of limiting trade or immigration. The scenario was similar to what had occurred during the US Financial crisis, where many countries opted for protectionist trade policies. In such times, protecting one’s own interests and national security becomes a critical agenda. Thus, to hold referendum in such a background was only bound to lead to such a result.

So now that Britain has voted to leave EU, what next?

UK Prime Minister David Cameron

Some interesting points to note are:

  • UK Prime Minister David Cameron has resigned and so far, Article 50 of the Lisbon Treaty has not been invoked despite the EU leaders calling for Britain to speed up the process.  The EU leaders want the process of Brexit to begin, but UK will take time. Firstly, the resignation of the David Cameron means there is a political void that needs to be filled, that is, a new prime minister must come in to take the lead on Brexit process. For the new prime minister, this task could be the death of their political career for good.  Secondly, perhaps, but it seems that the opposition had no plan in the line should the Leave campaign win and under the present circumstances, some critical questions must be answered even before Article 50 is invoked for e.g. the status of Britons working in other EU states, new trade deals and the kind of relationship UK will want with EU in the future after the exit. Clearly, UK will take time much to displeasure of EU, to think thoroughly on these matters and needs a “captain that can steer the ship” effectively.

 

  • Currently, it now seems many voters who voted for the exit are backpedaling. The reports that after the vote, there was a spike in the Google search for “What is EU?” is alarming. It places a question mark on the knowledge of the voters on what it actually meant to leave or remain in EU. Secondly, it is widely claimed that it was the older segment of the population that caused the Leave campaign to win, effectively shutting out the voice of the young generation who voted to remain in EU. Thirdly, with key leaders of the Leave campaign backtracking their statements could be indicative that the Leave campaign was based on misinformation and even deception. With these developments, it would be interesting to see if there could be second referendum on Remain or Leave EU again under the circumstances. This is bearing in mind that the pound sterling has slid against the dollar and Moody’s has already downgraded UK economic outlook from stable to negative, indicating that UK not only faces uncertainty, but also, will face negative consequences for its economic growth.

 

  • Then there is Scotland and Ireland with the possibilities of their own referendums on the plate. With Scottish Prime Minister Niclo Sturgeon announcing the plan for second independence referendum (Scotland voted to remain in EU) and with Ireland unification referendum plans, UK stands not only to lose EU, but also, Scotland and Ireland that could potentially alter the economic and regional picture. The possibility that referendums (if credible) could act as deterrent remains to be seen.

 

For the time being, the UK economy will face challenges, but only in the short run. In the long run, there is a possibility that the shock could actually lead the economy towards recovery as such is the nature of economics. Economic theory could point towards one way, but, in reality it could go the other way. On the political end, things could take an ugly turn should the referendums of Scotland and Ireland go ahead and the results are the opposite. That could unleash another wave of shocks to the global economy.

However, the crack within the European Union is wider now. The political discussions around Brexit will not be easy.  Brexit has effectively paved the way for other member states to call on their own referendums (France, Holland, Sweden and The Netherlands have already had a call to hold referendums on remaining or leaving EU). With weaker economies still reeling from the austerity policies effects, such economies will re-think their stand on remaining within the EU, thus putting the whole union and the Euro at stake.

According to American economist Nouriel Roubini,  “Britain’s decision to leave the European Union (EU) could be the beginning of the disintegration of the bloc of countries or the United Kingdom” 

But could it be disintegration for both EU and UK?

 

Mother Nature – The Biggest Challenge of the Year 2010?

Volcano Eruption

‘Pacific Submarine Volcano Issues ‘Big Burp” (CNN)

According to CNN, the volcano lying under the sea merely exhaled. ‘The vent, lying 1,000 feet under the surface, issued a cloud 40,000 reaching feet in the air’ (CNN).  If  ash cloud reaching only 40,000 feet in the air (and mind the volcano was in sea) was a burp then what would an active eruption be?!

Mother Nature is definitely not smiling this year.  The year 2010 is witnessing the worst disasters ever and one is only taken aback by the magnitude of these disasters.  First, the Haiti earthquake that literally devastated the country claiming 200,000 lives. Then, the Chile earthquake of the same magnitude occurred but with lower loss of human lives. As if this was not enough,the Icelandic volcano erupted causing global chaos. Flights were cancelled, airports throughout Europe were closed due to the ash cloud, passengers were stranded all around the world not knowing when they will return home and airlines suffered the losses estimated to be at billions.  The impact didn’t stop here for it added to the woes of the European economies that are now tackling the debt and fearing the contagion of the Greece crisis could spillover to other euro countries.

But it did not end here.  The Deepwater Horizon Oil Spill in US claimed 11 lives and is continuously leaking oil which has caused havoc on the Louisiana coastline. Another report by CNN claims that a 6.1 magnitude earthquake hit Costa Rica Monday night but no damages have been reported. In addition to his, the man-made disasters are not far behind. The raid on Freedom Flotilla by Israel forces claimed 9 lives (although there are conflicting reports that the numbers are higher) leading to worldwide condemnation of the strike.

With such scenarios being on the TVs continuously,the question is

Where in 2010 is the world heading?

In the present times, such kind of natural disasters are wreaking havoc not only on the environment, but also, on the societies and economies.

The global economic recovery is weak and policy-makers definitely are facing challenging times ahead of them. With debt crisis looming in the developed world, natural disasters do have the capacity to pressurize the economies and prolong the crisis. The European economies not only face challenges in terms of their debt, but,  a strain is now being felt in the unity of the Euro zone.  Many believe that the handling of the Greece crisis has displayed the conflicts within the Euro members and therefore, the Euro will not last long as a bloc.

On the other hand, US which is facing a tight situation with regards to its fiscal situation after the bailout of its financial sector cannot afford any other disasters.  The oil spill of the Deepwater Horizon has placed an immense pressure on the state due to loss of jobs in the fishing industry of Louisiana. The effect on one industry will multiply through various channels and consumer spending power will get affected.

Loss of jobs because of globalization, the financial meltdown and now because of oil spill will have its own effects on the society. Consumer spending power is hit and with people losing jobs, finding another job is difficult. These difficulties end up affecting relations and the moral fabric of the society.  And in such times, to stay positive and keep on fighting becomes extremely difficult.

One hopes that Mother Nature will have mercy and will be forgiving in the year ahead. But till then, it is also time for us to rethink our ways and actions and try to build a better world for the upcoming generation.