November 4, 2015 / 9:35 PM / 3 years ago

Wielding riches, Qatar seeks to deepen U.S. ties, protect regional clout

DOHA (Reuters) - Qatar is hoping big investment and trade deals with Washington will help restore its position as a Middle East power broker after charges of World Cup graft, labor abuse and links to militants damaged its standing.

U.S. Secretary of State John Kerry (L) talks with Qatar's Emir Sheikh Tamim bin Hamad al-Thani (C) before their meeting at the Diwan Palace in Doha, August 3, 2015. REUTERS/Brendan Smialowski/Pool - RTX1MTDK

The country, adept at using finance as a form of “soft power”, also wants to reverse what it sees as waning U.S. interest in Gulf Arab states and ensure U.S. rapprochement with Iran does not shift it from the center of Middle East politics.

Once the enfant terrible of the Gulf Arab dynasties, Qatar has toned down a traditionally assertive foreign policy in the past two years, chastened by setbacks in Egypt and Syria, after helping bankroll Arab Spring revolts.

Its prestige has been clouded by allegations of poor labor rights, alleged corruption over the 2022 World Cup and strains with some fellow Arabs over its ties to Islamist groups.

But Western governments see Qatar, maverick though it be, as a potentially significant regional mediator because of its ties to Islamists around the Middle East, a role that may well become more valuable if moves to end Syria’s civil war gather pace.

Its gas riches also mean its value as an economic partner remains undimmed, a point Qatar has been emphasizing most recently with its main non-Arab ally, setting aside billions to deepen ties with the world’s biggest economy.

At the launch of a U.S.-Qatar Economic and Investment Dialogue in Washington in October, Deputy Secretary of State Tony Blinken said Washington’s partnership with Qatar was “absolutely essential and fundamental” to American strategy in the region. The U.S. was determined to help the Gulf states defend themselves from new and emerging dangers, he said.


“The U.S. and Qatar are partners economically just as we are in the security sphere,” said Blinken, adding that Qatar plays an outsized diplomatic and strategic role and is a “very significant” source of foreign capital.

He was speaking after the Qatar Investment Authority (QIA), one of the world’s most aggressive sovereign wealth funds, announced it pledged to invest $35 billion in the United States over the next five years.

The QIA, which helps manage the country’s energy-generated wealth through a traditionally Europe-based portfolio, said it had opened an office in New York to “better access new and existing investment partners”.

On the trade front, Qatar has agreed to deals worth more than $20 billion in total from U.S. companies like Raytheon Co, Lockheed Boeing in the past two years.

“Qatari investments are not purely financial, but carry with them a political aspect,” said analyst Ghanem Nuseibeh of Cornerstone Global Associates.

“The Qataris are trying to tell the Americans ‘look our relationship is about more than just politics… it’s holistic it involves other sectors, this investment is to compensate for any political rifts or disagreements with the Americans.’”


Those strains have included disagreements with Washington over the Qatari approach to conflicts like Libya and Syria — U.S. politicians have voiced alarm over Doha’s ties to Islamist armed groups seen in the West as militants.

But Qatar says it is precisely because it is on good terms with a wide network of contacts — although not with terrorists, it says — that it has value as a partner and was able to mediate in disputes and wars from Somalia and Sudan to Lebanon.

Qatar prides itself on being able to convene a bewildering array of big name guests, a more complicated feat in other Arab Gulf states like Bahrain and the United Arab Emirates where sectarian politics and anti-Islamist policies have led to blacklisting.

Home to the biggest U.S. military land base in the Middle East, and campuses from six top U.S. universities, Qatar also hosts delegates of the Afghan Taliban and Palestinian Hamas, among other Islamist groups. U.S. First Lady Michelle Obama was in Doha on Wednesday to promote schooling for girls.

“The Middle East is a complex region with complex alliances and politics: We believe there is a critical need for a country that can facilitate open dialogue,” said a senior Qatari official. “The goal is to try to finally open up dialogue and communication between groups that for too long have refused to talk and instead focused on violence.”


“Qatar is working hard to play that role – and we believe it will benefit the U.S. to be a part of that dialogue.”

Some Qataris remain wary of U.S. assurances that it remains a good ally. They worry that America’s strategic interests in the Gulf have been affected by a cautious detente now under way with Tehran, and may not always be matched with a willingness to commit manpower and guarantee its security.

“There is this perception that the U.S. is no longer playing the role it used to in the Middle East,” said a former Qatari official, referring to President Barack Obama’s policies.

“Obama is pulling back at a time when others, like Russia and Iran, are moving in and becoming more hands on. Of course America must think about its future and its allies in the region, that’s normal… but we must think about our future too.”

By devoting billions to U.S. investments, Qatar is not only showing Washington that there may be a benefit to doing business with Doha even if they disagree politically, diplomats say, but also buying itself room to maneuver.

Those disagreements prominently include Syria.

At the U.N. General Assembly in September, the emir, Tamim bin Hamad, offered Qatar as a venue for a “meaningful dialogue” to repair rifts between Gulf Arabs and Iran.

He also voiced frustration with Syria peace efforts, in comments diplomats said appeared aimed at lackluster U.S. support for the Syria opposition. He described as “a major crime” the failure of the outside world to end the conflict.

While Qatar has been among the most ardent opponents of President Bashar al-Assad, its lax controls on suspected financiers of rebel groups gained it a reputation in Washington as a place of “permissive jurisdiction” for terrorism financing.

Doha has tried to counter the criticism by assisting the United States, in 2012 helping win freedom for journalist Peter Theo Curtis, who was held in Syria, through extensive mediation.

It agreed to supervise the activities of five Taliban leaders released from the U.S. detention facility at Guantanamo Bay and flown to Qatar as part of a trade for Bowe Bergdahl, a U.S. soldier held hostage for years in Afghanistan.  

Qatar’s channels to Islamist groups America is unable to reach, analysts say, make it hard to shrug off as an ally.

Editing by Yara Bayoumy, William Maclean and Philippa Fletcher

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