Amid Arab boycott, Qatari economy pays the bill of supporting terrorism

Shaima Hefzy

The Qatari economy paid its tax stance in support of terrorism over three years, which is the age of the Quartet boycott announced by the Kingdom of Saudi Arabia, the United Arab Emirates, the Kingdom of Bahrain, and the Arab Republic of Egypt in 2017.

In 2017, the four countries imposed a diplomatic boycott on Doha, due to the latter’s support for terrorism, and Qatar’s failure to adhere to the 12 items demanded by the four countries, on top of which it stopped supporting the terrorist Brotherhood.

As a result of economic pressures on Qatar, the pace of external and domestic debt increased at great rates, in light of the accumulation of debt burdens year after year, and in a manner that depletes the huge monetary wealth.

According to previous estimates of the International Monetary Fund, the proportion of external debt to Qatar as a percentage of GDP jumped to 106.7% at the end of 2019, compared to about 101.1% in the previous year, while it declined to 98.3% during the year 2020.

The volume of external debt increased during 2019 by 25.34% year on year, estimated at 39.64 billion riyals ($ 10.99 billion), to reach the highest level ever.

According to the data released by the Qatar Central Bank, the country’s external debt in 2019 recorded 196.040 billion riyals ($ 54.373 billion), compared to 156.400 billion riyals ($ 43.379 billion) in 2018.

The data show a notable jump in Qatar’s external debt in the past 16 years, to almost 12 times, by 1245.41%.

During 2019, debt issues increased; This caused the local government debt to rise to about 133.25 billion riyals ($ 37 billion), and it represents the outstanding balance of bills, bonds and sukuk issuances in recent years by the end of 2019.

The outstanding debt is distributed to bond issues with a value of 83.7 billion riyals (23.2 billion dollars), which will start to be repaid as of next year, and its period extends for the year 2029, while the existing balance of Islamic bonds is about 46.5 billion riyals (12.9 billion dollars), in addition to a stock balance of 3 billion riyals (832 million).

During the past period, the Qatari markets suffered an accelerated decline in the availability of liquidity, especially foreign ones. This prompted the Ministry of Finance and Qatar Central Bank to go to the international debt markets to provide liquidity.

During 2018 and 2019, Doha issued the largest single value of international bonds in its history, with a total value of $ 12 billion per issue, which is issued by the country’s Ministry of Finance, and is not registered in the books of the Qatar Central Bank.

With the Arab boycott entering its fourth year, the Qatari economy faces a tremendous level of losses, high inflation, the flight of foreign investments and the transformation of major companies from the massive gains of unbearable losses, in addition to the economic repercussions of the emerging Corona Virus crisis “Covid 19”.

The solution to the Qatari financial crisis with the entering of its fourth year will be conditional upon its observance of the principles stemming from the Riyadh 2013 and 2014 agreements, and its serious commitment to combating extremism and terrorism, preventing their financing or providing safe havens for them, stopping all incitement and hate speech or incitement to hate or violence, and refraining from interfering in internal affairs For the Arab countries.