Qatar row likely to affect regional economies: Experts

By Bahattin Gonultas and Dilara Zengin

ANKARA (AA) - The recent Gulf crisis will likely to have a negative impact on regional economies, experts said on Tuesday.

"Turkish firms investing in Qatar will get harmed but I don't think that it will be much damaging," Ali Semin, a Middle East studies expert from Wise Men Center for Strategic Studies (BILGESAM), told Anadolu Agency.

He, however, said that the Qatari investments in Turkey will not suffer.

On Monday, Saudi Arabia, Egypt, the United Arab Emirates, Bahrain and Yemen cut links with Qatar citing security concerns, in the worst rift in years among major states in the Arab world.

“There might be decreases or increases in Qatar's economic indicators but interruption of diplomatic relations with Saudi Arabia does not mean that Qatar will not survive,” he said.

Turkish exports to Qatar was around $440 million in 2016. A major part of Turkish exports is ships, yachts, electronic products, machines and furniture. Meanwhile, Turkish imports from Qatar in 2016 were $271 million and major part of it is oil, aluminum and plastic products.

Construction business in Qatar, where per capita income tallies almost $130,000, has potential for foreign investors, according to the World Bank and IMF.

In addition, Qatar will invest $200 billion since the country will be hosting 2022 FIFA World Cup.

Qatar draws attention as an important market in regard to Turkish building contractors as they do business valued at $15 billion, Turkish Contractors Association said.

- Trouble in logistics

Istanbul Sehir University Political Science and International Relations Lecturer Muzaffer Sener said that Turkey may have trouble in logistics.

"The most important thing for Turkey is; there will be trouble in Turkey's goods sent to Qatar. Moreover, Qatar's money is flown through European banks," Sener said.

"Since Iraq is an insecure region, there is a problem for Turkish trucks' route. If the trouble remains for long, Turkey's dependence to Iran will increase," he said.

He added that Turkey cannot be "neutral", but can play its role as a "mediator".

Erhan Akkas, a PhD researcher at Durham Centre for Islamic Economics and Finance in Durham University, also pointed out that the Gulf crisis had negative impact on markets and Qatar's stock market experienced a severe fall.

On Monday, stocks in Qatar lost their biggest one-day percentage, 7.3 percent, drop since late 2014, after Saudi Arabia, Egypt, the United Arab Emirates, Bahrain and Yemen severed diplomatic relations with Qatar.

Akkas noted that the crisis, which will lead to trade problems in regional economics, will have a great impact on Qatar’s foreign-dependent food sector.

Qatar is a prominent actor of global finance system with its existing funds and it is also the richest country in terms of income distribution, Akkas reminded.

"Qatar, which holds the world's 9th biggest sovereign wealth fund with $350 billion, makes investments in real estate, banking, automotive and technology sectors," he said.

- Qatar's investment

The fund was invested in Russian oil company Rosneft, the Netherland’s giant Royal Dutch Shell, French oil giant Total, British lender Barclays, Swiss bank Credit Suisse, Chinese agricultural bank, Germany’s Volkswagen and Siemens, the world’s jewelry giant Tiffany&Co and Heathrow airport in London, according to Qatar Investment Authority.

Even lower level of gas and oil prices, Qatar maintained its position as the leader with GDP of $129,726 regarding purchasing power parity.

According to IMF and World Bank, the national income of Qatar, which is holding the third largest natural gas reserves with 2.2 million population, decreased by $3,144 in 2016 from $132,870 in 2015.

Commenting on the possible impact of the crisis on Turkey-Qatar economic relations, Akkas said that Qatar might supply its goods through "friendly countries" like Turkey.

"This situation might increase Turkey's exports to Qatar in the upcoming periods," he said.

"The increase of Turkey's exports to Qatar would relax the country for food products. Also, new exports items, which have not been sold to Qatar before, might be brought into export line,” he explained.

Mustafa Basar Arioglu, Yapi Merkezi building company's chairman, said that Turkish building contractors succeeded in Qatar.

"We don't have an idea about the effects of the latest crisis. We have information that everyone in Qatar looks calm," Arioglu said.

The Turkish company would construct Doha subway with foreign partners.

Yapi Merkezi says on website that Doha subway, whose length is 300 kilometers (186.4 miles), will have four lines and 100 stations. The construction is planned to be completed in Aug. 2018.