To: Secretary of State Hillary Clinton

From: Chad Meyer, Country Desk Officer for Qatar

Re: Recommended U.S. Foreign Policy towards Qatar

Date: October 22, 2012

Overview of Qatar Qatar is a peninsula located in the Persian Gulf. This small country used to be known as a pearling state and has grown into one of the largest oil and natural gas producers in the world. The government is a monarchy and has been ruled by the Al Thani family since the mid 1800’s. The current Emir is HAMAD bin Khalifa Al Thani who took power from his father in 1995. The previous Emir was crippling the economy by siphoning off oil revenues; HAMAD overthrew his father in a bloodless coup and then filed a lawsuit requiring him to pay back the money he had taken from the country. The case was settled and HAMAD bin Khalifa Al Thani stayed in power. In 2001, Qatar settled a land dispute with Saudi Arabia with the help of the International Court of Justice (ICJ). Since this time, Qatar has managed to stay out of the conflicts that have plagued the region as of late. Recently, Qatar has become the world’s wealthiest country in terms of GDP. In 2011, they passed Luxembourg with a per capita GDP income totaling $102,700. The country has plans to continue growth, announcing a plan to invest $60 billion in infrastructure and will host the 2022 World Cup. The country is expecting 18% to 20% growth in the economy as they near the World Cup. This type of growth rate is scary as Qatar has already experienced large inflation rates in 2007 and 2008. Those years, the inflation rate was around 17% and consumers were having a hard time keeping up with the growing country. As of 2011, the inflation rate is at 1.9%, providing a strong outlook for the current economy. Another reason the economy has a healthy outlook is due to proven oil reserves, over 25 billion barrels will allow the country to continue its current output for the next 57 years. Oil and gas account for more the 50% of their GDP, over 85% of export earnings, and 70% of government revenues. Qatar is also fortunate enough to hold the world’s second lowest unemployment rate, 0.4%, making them a strong partner for the future. Natural gas has become a top priority of the country and the government is looking for new ways to invest in this market. Doha, the capital city of Qatar, is the home-base for Al-Jazeera. This media outlet has only increased Qatar’s image in the Middle East and around the world. It has spawned many different channels for different places in the region and has been awarded for covering events like the war in Afghanistan and the Egyptian protests. You have called Al-Jazeera less opinion driven than American journalism.
Security
While being located in a region of unrest due to pleas of freedom from the people in surrounding countries, Qatar has faced little civil unhappiness. Qatar has been the subject of terrorist statements due to serving as a host to USCENTCOM, the United States Central Command agency, and supporting U.S. regional initiatives. The country is stable at this point and there are no immediate threats to national security. The military is small due to the country’s population but seems to be a priority to the Emir. There are currently 11,800 active personnel, 30 battle tanks, and 18 fighter aircraft. In July, $3.5 billion were spent upgrading the Qatari helicopter fleet. 22 Sikorsky Seahawks and 12 Black Hawks were purchased from us, the U.S., to bolster their anti-submarine and maritime patrol force. The Defense Security Agency has said the sale of these helicopters will provide more protection for the United State while, also, improving foreign relations with a friendly country the continues to play an important role in the Middle East. Qatar looks to be a big player in the future of the Middle East because of relationships with many countries, some of whom are not aligned with the U.S. This week, Qatar’s Emir flew to Gaza and gave the country $400 million (US) to repair a failing infrastructure, and to also make a political statement. A UN report from August of this year said that a 141 mile-long strip in Gaza will be unlivable due the country’s economy and out-of-control poverty levels. Sheikh Hamad’s visit is the first since 2007 of any head of state. The country has been cut off from the West and Israel because of Hamas rule. Hamas is recognized as a terrorist group by the U.S. and has Taliban alliances. In a public statement, the Emir proposed that Hamas and Fatah, the ruling party of the West Bank and preferred party because of their more moderate stance, begin steps toward reconciliation. This is a move worth watching from the U.S. and NATO perspective. If the intentions are to bring the sides together, then the U.S. may have found a partner in creating peace in a region that has been dominated by war for centuries. If the intentions are not peace and more support is given to a volatile group with no improvement, the U.S. would have to reconsider its position as an ally with Qatar. Qatar continues to be outspoken about Arab nations finding resolution between themselves and without the assistance of the West. To this end, the Taliban will open a political office just outside of Doha. The Qatari Prime minister says this is an effort to find a solution between the Afghans and the Taliban, a solution that must be talked out. Despite the foreign policy balancing act that Qatar is doing, this country can become a strong ally and deterrent going forward. Their economic outlook and willingness to support new democratic regimes in Egypt, Tunisia, Libya, and Syria is a good indication of their potential to improve security in the region.
Diplomatic Assistance As pointed out in the previous section, Qatar is active in the Middle East and has been an influential partner in the Egyptian, Tunisian, Syrian uprisings. Al Jazeera has covered the “Arab Spring” and brought it into millions of households throughout the region. Many people point to the media as a catalyst that sparked and sustained these revolutions. Qatar, though, is criticized for not having much to show for all of its efforts. Only the 2008 Doha Agreement which ended Lebanon’s 18-month long political crisis is credited. Despite the criticism, Qatar continues to pursue peaceful alternatives and the Palestinian-Israeli conflict has been an issue where they believe progress can be made. Qatar and Israel are not formally aligned but Qatar has supported the Arab League position backing internationally supported negotiations between the Palestinian Authority and Israel. Qatar has stated that their number one priority is to find a peaceful resolution to the Palestine-Israeli conflict. Despite their backing of the Arab League, Qatar does host a Hamas politburo chief, who resides in Doha and engages in his duties from there. While in Qatar, Khaled Meshaal the Hamas Chief, had moved toward reengagement in discussions on Palestinian unity. This change is said to be because of Qatari diplomats promoting Qatar’s preferences but Meshaal has since changed his tune. He says now that “the resistance and the gun are the only real course towards a solution”, a statement that aligns more with the radical Hamas agenda. Although Qatar seems to be a country willing to help both sides of a conflict, they remain consistent in their message of peace being the ultimate goal of the region. The U.S. ambassador to Qatar has said “they are a country that occupies the middle of an ideological spectrum and has doors open on both sides of this spectrum with the goal of creating understanding. They have the resources to accomplish this vision and that is rare”. The United States relationship continues to be solid. After a 1992 defense cooperation agreement, Qatar and the U.S. have coordinated a close military effort. When the current Emir took control in 1995, the U.S. quickly recognized his assumption of power and has saluted his defense cooperation, along with political, educational, and economic reform that has turned the country around. Although Qatari government maintains ties with Hamas and others critical of the Israel, they have provided land for military bases and training, along with strong counter terrorism efforts. They continue to be strong ally and will be a prominent economic partner going forward.
Economics
Booming! Currently, Qatar’s economy is sky rocketing. From 2000 to 2011, GDP has gone up from $35 billion to $139 billion. Oil and gas do provide the government with more than 50% of the revenue but even the non-oil and gas sector reached a 9% growth in 2011. Recently, the Qatar government passed a budget on the assumed value of oil at $65 a barrel. The actual price of a barrel of gas as of October 23, 2012 is $86.99. The International Monetary Fund (IMF) projects a surplus of $16.4 billion and projects surpluses until at least 2015. All of this economic growth allowed Qatar to outbid the United States for the 2022 World Cup and has given them a credible and powerful stance in the world market. The U.S. role is to continue operating in a diplomatic and security role. The largest importer to Qatar is America at 12%, bringing in American Steel. Providing U.S. military contracts and improving the country’s defenses can only continue to grow both economies.

Oil Sector Qatar’s natural resources are the reasons for such a strong economic outlook. Although their 25.4 billion proven oil reserves do not compare to Kuwait, Iraq, and Saudi Arabia (252 billion), they do have the world’s third largest natural gas reserves. Qatar is a member of OPEC and has actually increased their output in the recent years because of OPEC. With oil reserves projected to run out in the future, Qatar has invested money in getting other countries to finance the expansion and extraction of their natural gas facilities. The U.S. is a large contributor, providing over $1 billion in loan guarantees to support Qatar’s continued natural gas production. Qatar has signed many agreements with international markets around the world to export LNG, including the U.S. Liquefied Natural Gas (LNG) production has increased 73.5 million tons since 2002 making Qatar the largest LNG exporter in the world. Recent events have created even more interest in Qatari oil and natural gas imports. Jordanian authorities have already begun to discuss Qatari oil imports as a result of the recent Egyptian insecurity. The future of oil and gas is uncertain but Qatari projections are stable for the foreseeable future.
Islam and Religious Freedom Islam is the national religion and the state adheres to Hanbali school of Sunni Islam. Unlike most of the region though, Islam is not practiced in the same way as Iran, Iraq, or Saudi Arabia, who also practices Hanbali Sunni Islam. Conditional religious freedom is allowed except that non-Muslim religions cannot convert or attempt to convert citizens. The country does recognize many other religions including Catholic, Anglican, Coptic, and Indian Christian churches, among others. In 2005, the Emir donated land for a $7 million dollar Anglican Church and a Roman Catholic Church was constructed in 2008. Unlike many Middle Eastern countries, law is not tied directly to the Quran in Qatar. Alcohol is not illegal and is sold in bars and clubs around the country.
Al Jazeera and Media Freedom Al Jazeera was established in 1996 with a $140 million grant from the current Emir. Al Jazeera has since been funded by the government and has had a hard time producing income through advertising. Many within the Al Jazeera network believed Arab governments were not allowing or pressuring companies not to advertise with the network due to its unflattering portrayal of events happening in their own countries. As the network became more accepted in the region and their coverage became less critical of governments in the region, advertising and other concerns became less relevant. Al Jazeera now has multiple channels including an English language channel available in the U.S. The network has received many awards for covering conflicts not covered by other networks but still receives criticism that Qatar’s foreign policy is behind what events are covered and what events are not. Coverage of the uprisings across the Middle East has been an intense subject of debate in the region. An “Al Jazeera” effect is said to have been created and promoted the rapid spread of political activism. Freedom in the media depends on who you ask. Despite a decree in 1995 lifting formal censorship, many journalists still exercise some form of censorship especially when writing about the Emir and his family. Qatar signed an agreement with ‘Reporters Without Borders’ but due to political pressure the head stepped down in 2009, saying the country never wanted freedom of the press, to speak out without concern for diplomacy or politics. The group, ‘Reporters Without Borders’, is still active within the country though, and in April 2011, appointed a new director-general from the Netherlands. Al Jazeera and the media also cover Taliban recordings and replay videos from the terrorist group. This may be a talking point that the United States can bring up in future talks with the Qatari ruling family. Sanctions on what is allowed by terrorist groups and how it is shown to the Middle Eastern region could have harsh impacts on the Taliban recruiting efforts and glorification image they urn for.
Government and Political Reform The government is run by the Al Thani family, which I have mentioned throughout this memo, and recently has also moved to give some power to the people by having elections for Municipal Council and the National Chamber of Commerce. In 1999, men and women were allowed to vote which marked the first time a Persian Gulf country had allowed all members of society to vote. In recent years though, voter turn-out has been small with the criticism that no real change is created in the country. The Al Thani family has no indications of leaving the monarchy and has every intention on continuing to rule. An heir, Tamim bin Hamad bin Khalifa Al Thani, has already been named and if he were to die, the current Emir has 3 wives and 23 other children. The Al Thani seems to be interested in the idea of democratic rule and even created a constitution in 2003 but it has not been fully implemented. Critics say it is because the family would have to give away some power to the people and at this moment, none of them are asking for it. In conclusion, America’s relationship with Qatar continues to be important because of the location and military cooperation. Their diplomacy within the region could benefit American’s and the global economy if an acceptance of differences can be mediated or initiated by this ally. Qatar is worthy of admiration and close scrutiny in the following years but their efforts to improve a struggling region are what American President’s and Arab’s want to see.
Works Cited

Blanchard, Christopher M. Qatar: Background and U.S. Relations. Rep. Congressional Research Service, 6 June 2012. Web. 22 Oct. 2012. .

CIA - The World Factbook. Issue brief. CIA, n.d. Web. 22 Oct. 2012. .