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When Oil Revenues Go Awry

By Claude Salhani | Tue, 26 March 2013 23:12 | 0

By now it is no great secret that the small, but vastly rich oil and gas producing state of Qatar is playing a major role in supporting and financing opposition forces in the Syrian civil war.

The conflict raging now for over two years has seen horrific fighting and destruction of Syrian cities and towns as the opposition continues in their relentless efforts to overthrow the government of President Bashar Assad in Damascus. That can be perceived as either a positive or a negative political move, depending on one’s views.

Qatar’s intervention in regional politics, be it in Syria or in neighboring Lebanon, would have never been possible were it not for the billions of dollars the country amasses yearly from its sales of oil and natural gas. In most likelihood it was Qatar’s foray into Lebanon’s political morass several years ago when it tried to intervene in support of the Lebanese Sunni community that dragged it into the Machiavellian world of Levantine politics. More on that in a moment.

Qataris are predominantly Sunni Muslims. Of the country’s population of 2,042,500, more than 77.5 percent are Muslim, mostly Sunni. The rulers in Doha first stepped up to the international scene back in 1990-91, when then US President George H.W. Bush put together a wide coalition of Arab and international forces to force Saddam Hussein out of Kuwait, which the Iraqi leader had just occupied. Qatar dispatched a small force that operated in a zone around the Saudi Arabian town of Khafji where US Marines were the first to clash with Iraqi forces.

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With a GDP of $189 billion according to figures from the Central Intelligence Agency, Qatar has continued to prosper and grow.  That figure for 2012 is up from the previous year’s GDP of $177.8. Revenues for 2012 stand at $62.66 billion.

Qatar has weathered the recent world financial crisis by having the government invest directly into local banks.  Indeed while much of the international community was feeling the impact of the world economic crunch, Qatar went on a wild spending spree, purchasing everything from category one French soccer teams to Swiss banks.

One of the main reasons for Qatar’s increase in GDP was the raise in oil prices and its expanding gas sector, but as the expansion of the gas project neared completion the country’s GDP slowed down to 6.3 percent in 2012.  Still not shabby.

Cognizant that its oil and natural gas reserves, while plentiful are nevertheless finite, the government has been trying to increase foreign investments in non-energy sectors, however, oil and gas still make up more than 50 percent of the country’s GDP.

Oil and gas have made Qatar the world’s highest per-capita income country and the country with the lowest unemployment at 0.5 percent (2012 est.), states a CIA report on the small Gulf nation. Qatar currently sits on some 25 billion barrels of proved oil reserves.  That, according to US estimates, should keep the country going at current levels for the next 57 years.

The country’s natural gas proved reserves are placed over 25 trillion cubic meters. That is about 13 percent of the world’s total, placing Qatar in third place worldwide.

So with all those riches at their disposal why on earth would anyone delve into the murky, backstabbing world of Middle East politics where memories linger and sins are unforgiving?

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The answer may be part out of sympathy for fellow Sunnis who found themselves under pressure in Lebanon, part esprit de grandeur on the part of the Qatari leadership who having achieved financial success wanted to attain political recognition and took upon itself a role typically portrayed by larger states such as Saudi Arabia.

When the country’s ruler, Emir Hamad bin Khalifa al Thani committed his name, prestige and political financial clout in support of a settlement of a Lebanese dispute between Lebanese Shiites and Sunnis, the first backed by President Assad of Syria and the Islamic Republic of Iran (predominantly Shiite) the second by Qatar and Saudi Arabia (both predominantly Sunni) the emir felt personally slighted when the Syrians reneged on the accord. Syria’s Muslims are mostly Sunnis, however the ruling Alawites are an off-shoot of Shiism.)

One thing led to another and tensions quickly escalated with both Syria and Qatar trading accusations and insults.

As the war in Syria began to amplify the Qataris felt they needed to win back some of the political points they had lost in Lebanon. From there on it became simpler by the day to undermine the regime in Damascus and perhaps make a point that a new dawn was breaking over the Levant and it was high time to accept those changes.

The danger of course is that while many may see Qatar’s intervention in a positive light in view that the opposition is fighting a brutal regime, however as the saying goes, one can never play with fire and not get burned.  Time of course will tell.

By. Claude Salhani

Claude Salhani, a specialist in conflict resolution, is an independent journalist, political analyst and author of several books on the region. His latest book, 'Islam Without a Veil,' is published by Potomac Books. He tweets @claudesalhani.

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