Qatar: towards the lifting of the Gulf Cooperation Council Blockade

On January 5 th 2021, the Gulf Cooperation Council (GCC) held its annual summit in Al-Ula, Saudi Arabia, with the special attendance of Qatar’s Emir Sheikh Tamim bin Hamad Al Thani . Three and half year into the GCC (Saudi Arabia, the United Arab Emirates and Bahrein) + Egypt embargo on Qatar, the strained partners seem to be set for a reconciliation – clearly a positive development that will reduce tensions in the region. This GCC move towards the resolution of the diplomatic impasse and the ongoing economic blockade on Qatar (Jun.2017) – that resulted from assumptions of th e latter financing terrorist groups and holding close ties with regional Sunni rival, Iran – comes at a time when a shift in the US foreign policy in the region is anticipated under the new Biden administration , notably concerning Iran. Indeed, the new US administration had evoked its will for a possible reopening of nuclear talks with Iran. The Kingdom of Saudi Arabia, the leader of the anti-Qatar coalition, was the first to act on the embargo lifting direction, acting on January 4 th the opening of its air, land a sea borders with Qatar , a decision followed by all Bahrein, the UAE and Egypt. The GCC summit concluded with the signature of a “solidarity and stability” agreement, other GCC members the United Arab Emirates and Bahrein putting forward their cautious stance towards a normalization. In this context, as of January 20, Egypt and Qatar agreed on reestablishing diplomatic relations making a step forward to the blockade end. Yet, Qatar does not seem in a rush to normalize its regional relations. Against all odds, its economy proved incredibly resilient to the regional embargo. Following the initial support of key partners Turkey and Iran , the energy dependent Qatari economy managed to diversify offering the small Gulf state the opportunity to gain political autonomy. Following a 1.5% GDP contraction in 2017, Qatar’s GDP was of 1.2% and 0.8% in 2018 and 2019 respectively and it is set to outperform its regional peers in 2020 with a moderate GDP contraction of 4.5% (vs.-5.4% and -6.6% for Saudi Arabia and the UAE respectively) resulting from the double Covid-19 and low energy prices shock, to pick up to 2.5% and 3.9% in 2021 and 2022. Discussions and negotiations pointing to the close end of the GCC-Qatar dispute adds to the positive momentum of geopolitical prospects for 2021 in the Gulf region .