The skyline of Doha. Jeff Topping / The National
The skyline of Doha. Jeff Topping / The National
The skyline of Doha. Jeff Topping / The National
The skyline of Doha. Jeff Topping / The National

What lies beneath Qatar has a huge bearing on its future


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Qatar is captured in images. A favourite is the new and expanding skyline of Doha, variously described by The New York Times as "medieval Baghdad crossed with Blade Runner" and "a cluster of spaceships about to blast off". The Baghdad connection is never really explained, but that's the point: Qatar is what you want it to be, as long as you have a good metaphor and a picture to back it up. Foreign Policy recently attempted to amend some of these rhetorical flourishes – what it derided as the "rank hyperbole" of much western media coverage of Qatar – but produced its very own. The Sheraton Hotel, the go-to diplomatic meeting spot and 1980s-era landmark on Doha's redeveloped Corniche, was likened to the bar scene from Star Wars, "with French paratroopers strolling by as djellaba-clad Darfuri rebels and western oil executives sip tea in the hotel's towering lobby".

With its newness, wealth and diplomatic attempts to be all things to most people, Qatar is compelling. What seems most impressive (and perhaps most familiar for anyone who has spent any amount of time in this part of the Arabian Gulf) is the nation's quick ascent from "a penniless swatch of sand and rock inhabited by nomads and fishermen", in the words of one of those recent New York Times articles. The impression of such descriptions is a place
without history. But was it really so different, the spaceship skyline aside? And who were those nomads and fishermen?

Allen Fromherz's history of Qatar is a corrective to so much breezy coverage that describes pre-oil Qatar as no place at all. While it is at times not the liveliest account – if readers are more drawn to descriptions of skyscrapers than tribal politics and the Arabian Gulf's lost pearling trade – Qatar: A Modern History is still a much-needed and informed one. Doha may be built on sand by some of the world's largest known natural gas reserves, but Qatar is not simply its capital's "image of rapid change and progress projected to the outside world", Fromherz writes. The recent deadly fire at Doha's Villaggio Mall, a prominent, upscale hub for Qatar's expatriate population, is an awful reminder of that reality. Taking a longer view, the internal structures of Qatari society that existed long before the advent of hydrocarbons still remain, so much so that "some of what seems to have changed so quickly has not, in fact, really changed much at all."

An American professor who spent a year teaching at Qatar University, Fromherz wants to revise what many think they know about the small Arabian Gulf peninsula, beyond the “disorientating” and “feverish” recent physical changes that often awe outsiders but obscure the durability of social, political and tribal dynamics that constitute the state.

Power may be “unmistakably concentrated in the Emir [Sheikh Hamad bin Khalifa Al Thani]”, Fromherz writes, but it is hardly assured. Internally, it depends on an informal pact with Qatari citizens, the same arrangement “that has cemented the people to their leaders for centuries”, in which political authority is handed over in exchange for the distribution of wealth. In centuries past, that compensation came from the pearling trade, which singularly dominated Qatar’s economy much like oil and natural gas do today and were also at the whim of foreign markets. Before oil, Qatari rulers’ revenue was almost solely based on pearls – taxing ships and taking a cut of their profits.

Tribal politics, family intrigue and patronage, however, don’t account for the state’s contiguity and independence, which relied on Qatar’s historical alliances with the region’s dominant foreign power to guarantee protection.

In 1868, Muhammad bin Thani boarded a British warship to agree to a list of demands presented by the British agent in the Arabian Gulf: abandon piracy and end a feud with the Khalifas of Bahrain. The first formal recognition of Qatari sovereignty by the British, the agreement was comparatively late for the region. The sheikhs of the Trucial States, along with Bahrain, signed their first treaty, pledging peace in exchange for access to ports in the Arabian Gulf and Indian Ocean, in 1820.

The 1868 agreement elevated Muhammad bin Thani above the rival sheikhs of Qatar, with the might of the British navy behind him. But the agreement also shielded Qatar from Bahrain. The previous year, Bahraini ships, aided by Abu Dhabi, destroyed much of Doha and Wakra, the culmination of feuds over control of Qatar’s pearling villages (population about 5,000).

A generation later, in 1916, Muhammad bin Thani’s grandson, Sheikh Abdullah bin Jassim Al Thani, boarded another British warship to sign a new deal with Britain’s imperial representative. The Anglo-Qatari Treaty formalised Qatar as a British protectorate, joining the Trucial States, Bahrain and Kuwait. For Britain the area was vital for Indian trade routes and, later, oil. Securing the Arabian Gulf’s allegiance was an imperial necessity, dictated by the likes of Lord Curzon, viceroy of India. Undoubtedly, Muhammad bin Thani and his descendants played haughty British interests off waning Ottoman power to consolidate authority against rivals on the peninsula. Yet Fromherz concedes that the current power of the Emir and his family “has no fundamental historical precedent outside of British interference”. The 1916 treaty made Qatar the domain of Al Thani. If not for the British, another prominent family on the peninsula might have risen to prominence – or Qatar could have been absorbed by one of its neighbours, most likely Saudi Arabia.

Most of all the British agreements created the kind of political rule that continues today. The Anglo-Qatari Treaty enshrined Sheikh Abdullah and his family as Qatar itself, legally inseparable. In their effort to find reliable political allies, the British eliminated rivalries and empowered the Al Thani tribe internally while forcing them to cede their foreign affairs to the British government.

When the guarantee of British protection ended with Qatari independence in 1971, a new guardian was needed. In stepped the United States. American diplomats claimed to not want to be the imperial replacement, but Cold War containment, the Iranian revolution, and the Soviet invasion of Afghanistan led to American dominance in the Gulf. The Iran-Iraq war and Saddam Hussein’s invasion of Kuwait only fortified America’s position. Since 2003 the Al Ubeid air force base outside Doha has been the regional headquarters of US Central Command, from which the Iraq war was coordinated. The nearby Camp Al Sayliyah houses the largest depot of American military equipment in the Middle East.

US security guarantees, unlike British ones, have not come with forfeiting foreign policy. Qatar’s diplomatic mediations are well-known: pick a recent regional conflict and it has been involved, most recently in endorsing military intervention in Syria against Bashar Al Assad. But mediation is not simply about raising Qatar’s international profile. Being the hakam – the traditional mediator of tribal disputes – buttresses the Emir’s legitimacy at home, Fromherz argues, as well as Qatar’s security by balancing outside powers.

Curiously, Fromherz focuses so much on Qatar's politics and regional dynamics that he understates oil and gas. Qatar, he says, is more than "an empty container into which oil and progress are poured", before producing a vague description of the country's colossal reserves: they matter, but as "a characteristic and a
catalyst, not a primary and independent cause". Perhaps, but just as the ruling family owes its modern political origins to British treaty protection, its economic might is tied to what is under the sand and water off Qatar.

After all, the oldest generation of Qataris still remembers the “years of hunger” from the 1920s through to the 1940s, when pearl prices collapsed and the peninsula’s population fell to 16,000. The eldest of the Al Thani family might also recall Sheikh Abdullah, the Emir who in 1935 was forced to take out a mortgage on his house to cover a debt of 17,000 Indian rupees. But later that year he signed the first oil concession. His signature alone was worth 400,000 rupees, along with an annual, personal stipend of 150,000, which soon doubled.

Frederick Deknatel is a freelance journalist who has written for The Nation, the Los Angeles Review of Books, and other publications.

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

Libya's Gold

UN Panel of Experts found regime secretly sold a fifth of the country's gold reserves. 

The panel’s 2017 report followed a trail to West Africa where large sums of cash and gold were hidden by Abdullah Al Senussi, Qaddafi’s former intelligence chief, in 2011.

Cases filled with cash that was said to amount to $560m in 100 dollar notes, that was kept by a group of Libyans in Ouagadougou, Burkina Faso.

A second stash was said to have been held in Accra, Ghana, inside boxes at the local offices of an international human rights organisation based in France.

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