Posted on September 15, 2017

The Gulf crisis which seems to be permanent will force executives, bankers, investors and foreign political decision-makers to reconsider their Gulf approach, Bloomberg reported.

With officials invited from Iran, Kuwait and Oman for the opening of the new Hamad Port on September 5, the event sends a defiant message: Qatar won’t be confined by a Saudi-led embargo and you’re either with us or against us, the report said. A London-based Middle East and North Africa analyst at the Control Risks strategy firm Allison Wood said: “Qatari businesses in particular will prefer to use new trade routes and partners that avoid the UAE and Saudi Arabia. “Multinational business will also think more carefully about how they approach the GCC and the way they set up their operations and investments across the GCC.”

Bloomberg added that the crisis could potentially cost hundreds of millions of dollars in future contracts. Some foreign banks that serviced Qatar from Dubai are looking at setting up offices in Doha and handling clients in Oman and Kuwait from there, two bankers said. Already some are sending staff from offices in London, New York and Hong Kong to meet with Qatari clients because it’s getting harder for Dubai-based bankers to travel to Qatar or because some Qatari clients are refusing to deal with people from Dubai, they said.

Qatar’s banks, meanwhile, are keeping track of which foreign partners have maintained business with them and which ones have scaled back lending. The central bank wants to draw up a list that may be used when deciding who to give future business to in Qatar, according to three bankers briefed on the matter. “Trade and financial links have been weakened and are unlikely to be revived even if the political row is resolved,” said Farouk Soussa, London-based chief economist for the Middle East at Citigroup Inc.

Qataris say they are adjusting to what has become normality. Business is picking up again as new routes, and friends, are found. “Ships that weren’t being used are now being used all the time – the marine business is booming,” said Omar al-Hammadi, a 20-year-old Qatari finance and accounting student who works in his father’s marine business. Qatar has now developed the facilities to refuel and service ships rather than use Dubai, he said. “Businesses have been told to prepare for the long term.”

source: Gulf Times