Qatar, a natural gas-rich country in the Gulf, makes significant investments abroad thanks to its financial power. Although Qatar is a small country geographically, it has a large sovereign wealth fund that has a substantial influence on global markets. Today, Qatar holds shares in the world’s most important stock markets, largest automotive companies, and most prominent financial institutions.

Qatari Investments in a Changing Economic Environment

Qatar is one of the leading countries in exporting liquefied natural gas (LNG). As the largest LNG supplier to Europe, the country has a significant share (between 45% and 67%) in the LNG imports of Poland, Belgium, Italy, and England. After Qatar, the U.S. comes second and Russia third in LNG exports to Europe.

Qatar manages capital accumulation through the Sovereign Wealth Fund (Qatar Investment Authority, QIA). While Qatar’s investments generally exhibit a more long-term trend, in certain investments gaining prestige comes into prominence as a primary motivation since the latter is an important source of political legitimacy and credibility in the international system.

In addition to its investments in popular sports clubs around the world, it is particularly noteworthy that Qatar will host the 2022 FIFA World Cup and it has already spent more than $200 billion for this purpose.

According to 2019 data, Qatar made foreign direct investments worth $44.78 billion.

Qatar has achieved a significant growth in global investments in recent years and has considerably increased its foreign stock investment. According to 2019 data, Qatar made foreign direct investments worth $44.78 billion. Out of more than 80 countries in which Qatar has invested, the share of the EU is 34% whereas the rest of the Gulf countries (GCC) make up 24% of the investments.

The Increasing Share of Qatari Investments in Western Countries

In the last 20-30 years, Asian and Middle Eastern investors have increased their investment power in the global economy. In this environment, where the focus of the world economy has shifted from the West to Asia, Western countries pursue an array of strategies to attract investments from Asian and Middle Eastern investors.

For example, it is reported that a number of European countries such as the U.K., France, Italy, Greece, and Germany are competing to attract Qatari capital and are trying to establish close ties with Qatar in the field of energy. At the EU level, cooperation with Qatar is perceived as a strategic partnership.

The QIA has substantial investments in different sectors around the world. The fund has an investment of over $400 billion in more than 40 countries; $30 billion is invested in the U.S., $40 billion in the UK, €25 billion in Germany, and €30 billion in France. The QIA has become the largest shareholder of the London Stock Exchange with a 10.3% share.

The QIA also has considerable real estate investments in strategically important Western cities such as London, Paris, and Washington D.C.

During the 2008 global financial crisis, the QIA purchased shares in Barclays, Credit Suisse, Porsche, and Volkswagen, which are among Europe’s most important companies. Then, it invested in Deutsche Bank, which could not overcome financial difficulties after the global crisis.

The QIA also has considerable real estate investments in strategically important Western cities such as London, Paris, and Washington D.C. Apart from this, it should be noted that there are many Western companies doing business in Qatar. For example, more than 850 companies from the U.S., 700 companies from the U.K., and 330 companies from Germany operate in Qatar.

A few years ago, Qatar signed a strategic dialogue agreement with France in the field of security, energy, and economic cooperation. In 2008, then President Nicolas Sarkozy introduced tax exemptions on earnings for properties purchased by Qatar in order to attract Qatari capital to the country. Following this, a lot of real estate in Paris, including luxury hotels and prominent historical structures, were purchased by Qatar.

On February 14, 2021, Turkey announced that the PKK (Partiya Karkeren Kurdistan, Kurdistan Workers’ Party) had executed 13 Turkish citizens, who had been kidnapped some years ago and kept in a hideout in northern Iraq. The PKK is designated as a terrorist organization not only by Turkey but also by the United States and the European Union. In fact, the terror group has earned this designation for committing innumerable deadly attacks across Turkey since the early 1980s.

The cold-blooded execution of 13 people in the hands of their captors created an uproar in Turkey. Many felt the same fury as Suleyman Soylu, Turkey’s Minister of Interior, who clearly put this rage into words: “Let this nation and our martyrs spit on our faces if we do not catch Murat Karayilan [the military leader of the PKK] and cut him into a thousand pieces.”

Despite the emotions running high in Turkey, no country in the Gulf condemned the PKK nor did they send condolences to the Turkish people or expressed solidarity, except for Qatar. In a statement issued by its Ministry of Foreign Affairs, Qatar strongly condemned and denounced “the killing of 13 Turkish citizens” and sent its condolences to the families and the Turkish government and people. Thus, Qatar proved once again to be Turkey’s closest ally in the region.

Yet, upon closer inspection even Qatar’s statement appears far from satisfactory from a Turkish perspective. This is so for two reasons. First, the statement does not name the PKK as the perpetrator of this atrocity. Second, the statement reiterates Qatar’s policy position that rejects “violence and terrorism” and thus implicitly describes the act as an act of terrorism. But, then, the statement adds, “whatever motives and causes” were behind it. The statement, therefore, implicitly suggests that at least “some” motives or reasons might be behind the act.

Overall, the Gulf states are apathetic towards Turkey’s PKK problem. This apathy has two sources. One is historical. There is a general negative view shared by many Arabs, if not all, of either the Ottoman past or the modern Republic of Turkey, or both. As academic research documents, one line of argument suggests that the Ottoman rule was simply exploitative and repressive, and hence the root cause of the contemporary backwardness of the Arab world.

In another line of argument, contemporary Wahhabi-Salafism has accused the Ottomans of straying away from religion or even corrupting it with many religious innovations. The only societal group that held a more positive view of the Ottoman past was the Muslim Brotherhood. But the group was harshly critical of the modern Republic of Turkey for abolishing the Caliphate in 1924 and for other secularizing reforms.

These broad arguments have been shared and propagated by different influential groups in the Arab world, and seem to have deeply shaped the public discourse about the Ottoman past and the Republic of Turkey. The overall negative view of both has created an almost unquestioned sympathy especially among the Arab ruling classes and intelligentsia towards all ethnic groups who had once been or are still under Turkish rule, in general, and the Armenians and Kurds, in particular.

There is no systematic survey of these classes’ views on the PKK. But it is not difficult to imagine that the general antipathy towards the Ottoman past and the Republic of Turkey can turn into a sympathy towards the separatist Kurds and the PKK.

This is visible in the media coverage of PKK-related incidents. Even the coverage of the PKK by Al-Jazeera, the Qatar-based news outlet, is disappointing for Ankara. In fact, TRT World, Turkey’s state-owned international news outlet, once critically noted the similarity between Al-Arabiya (Saudi Arabia-owned) and Al-Jazeera in their coverage of Turkey’s operation against the PKK in Syria.

Al Jazeera’s coverage of the most recent PKK execution was in fact no different, describing, for example, the PKK militants as “Kurdish fighters.” Given that the media is heavily state-owned in the Arab world, the media’s coverage of the PKK illustrates the general sympathy of, at least, the Arab ruling classes towards the PKK.

The other source of the Gulf states’ apathy towards Turkey’s PKK problem is political. Turkey had great relations with all Gulf states in the 2000s to the extent that the Gulf Cooperation Council declared Turkey as a strategic partner in 2008. But, this changed with the Arab Spring. Turkey embraced the Arab Spring and developed cordial relations with the democratizing post-revolution governments in Egypt, Tunisia, and Libya. Saudi Arabia, the United Arab Emirates (UAE), and Bahrain became, on the other hand, status quo powers and distanced themselves from Turkey.

The same fate befell on Qatar, which also embraced the Arab Spring like Turkey. In the aftermath of the military coup in Egypt in 2013, Turkey and Qatar faced a severe regional isolation and in order to break out of this isolation, they developed a strong bilateral relationship. Showing the strength of these bilateral relations, Turkey resolutely stood by Qatar when Saudi Arabia, the UAE, Bahrain, and Egypt cut their diplomatic relations with the country and imposed a total blockade on the emirate in June 2017.

The blockade lasted for three-and-a-half years and in the succeeding years Turkey’s relations with Saudi Arabia, the UAE, and Bahrain reached historically low ebbs. Turkey taking a clear side in a specifically Gulf crisis added further strength to the already existing apathy Saudi Arabia, the UAE, and Bahrain felt towards the PKK problem.

In some governmental circles that apathy might even have turned into a sympathy towards the PKK. In fact, soon after the Gulf crisis broke out, according to a pro-government newspaper in Turkey, namely Yeni Şafak, officials from Saudi Arabia, the UAE, and Egypt, met with the YPG, which Turkey considers the PKK’s Syrian branch. Yeni Şafak even published a photo of the meeting where a portrait of Abdullah Ocalan, the PKK’s founder, was hanging on the wall. A few months later, a Saudi minister, Thamer al-Sabhan, visited Raqqa, which was then under YPG control. Then, in August 2018, Saudi Arabia pledged $100 million for stabilization projects in the territories under YPG control and announced that it made the payment in October 2018.

Of course, the appeal of the YPG for Saudi Arabia and the UAE lies in the organization’s strong relations with the U.S. We should not forget that the YPG emerged as the U.S. partner in the fight against DAESH (ISIS) in Syria and as such received generous financial and military support from the U.S. The rise of the YPG alarmed Turkey so much so that it has so far undertaken three major military operations in northern Syria.

The good relations between former U.S. President Donald Trump and Turkey’s President Recep Tayyip Erdoğan helped Turkey’s efforts. But it is still unclear how the new president, Joe Biden, will address Turkey’s concerns with regard to the YPG’s continued presence in northern Syria. It seems logical to expect that the Biden administration will increase U.S. support for the YPG given the strong pro-YPG and pro-Kurdish sentiments in Washington D.C., alongside the anti-Erdogan and anti-Turkey sentiments that are also running high.

In this context, the Gulf states, which heavily rely on the continued military and diplomatic protection of the U.S., took the least risky path and have turned a total blind eye to the most recent atrocity committed by the PKK – the execution of 13 Turkish citizens. Qatar proved to be the exception in the Gulf by virtue of its strong relations with Turkey. Yet, Qatar’s cautious statement reflects not only the general apathy of the Gulf states towards Turkey’s PKK problem, but also the highly cordial relations between the U.S. and the YPG.

After three and a half years of paralyzing strife, the blockade of Qatar was brought to an end ahead of the 41^st Summit of the Gulf Cooperation Council (GCC), turning the page on perhaps the darkest period in the union’s four decade history.

The diplomatic breakthrough was heralded by the arrival of Sheikh Tamim bin Hamad on a Qatar Airways flight to Al-Ula, Saudi Arabia. In an astonishing scene given the acrimony of the past few years, Sheikh Tamim was greeted and embraced on the tarmac by Saudi Crown Prince Muhammad bin Salman—widely considered one of the two main architects of the blockade along with Muhammad bin Zayed, the crown prince of Abu Dhabi.

Despite the geniality on display between the two Gulf leaders, however, it is difficult to mask that the reconciliation is both limited and fragile. Ending the blockade does not resolve the underlying frictions between Gulf states that led to the crisis in the first place.

Moreover, the absences of Muhammad bin Zayed and the King of Bahrain from the summit given this year’s heightened importance, has led some observers to speculate that rapprochement with Qatar was a Saudi-led initiative that the other partners to the blockade perhaps felt less enthusiastic about bringing to an end without achieving concessions from Qatar.

Indeed, the only publicly-acknowledged requirement of Doha was to drop all pending lawsuits against the blockading countries in international fora. In other words, nothing that preceded the rift itself.

That being said, it is difficult to argue that reconciliation was not a win-win for the entire GCC. While the Gulf body was never a model of effective multilateralism, restoring unity offers mutual benefits for all its members, as well as its foreign partners who have had the extra burden of navigating its fractured politics since June 2017.

Normalizing ties within the GCC allows for the resumption of cross-border cooperation and coordination at a time when all six members face a confluence of challenges on political, economic, security and public health issues.

No GCC member, for example, is immune to the severe downturn in global energy prices, the Covid-19 pandemic, or the potential outbreak of war with Iran and its consequences. Addressing complex challenges like these will always be more effective as a united bloc.

Fragile and limited: Will conflict return? 

Discord among states in the Arab Gulf is common, often stretching back generations and tied to tribal rivalries and territorial disputes. Yet the acute tension between Qatar and its neighbors developed in the mid-1990s, when Sheikh Hamad bin Khalifa took control of the state in a bloodless coup against his father.

In 2014, a significant diplomatic rupture occurred between the same GCC members (minus Egypt) that was only brought to a close after nine months of Kuwaiti-led mediation. At issue was Qatar’s support for revolutionary forces, especially Sunni Islamists who were making significant gains amid the upheaval, as well as its positive relations with regional powers Iran and Turkey, all of whom Saudi Arabia, the UAE and Bahrain felt threatened Gulf interests.

When Donald Trump visited Saudi Arabia shortly after becoming President of the United States in 2017, the Saudi-led axis felt it had received a green light from the new American leader to dramatically escalate the pressure on Doha and, perhaps, bring it to its knees once and for all. However, with the help of Turkey, Qatar was able to survive the initial shock of the blockade, ward off a potential military invasion, and steady itself in preparation of a long, drawn out affair.