In 2017, banks were warned that doing business with Qatar would lead to consequences, but now the tide has changed.

With Qatar’s emergence as a major player on the world stage, bankers have criticized the GCC dispute stating it’s bad for business. Initially choosing to chase Saudi Arabia, leading banks are now trying to repair ties with Doha’s financial district.

According to Bloomberg, executives from HSBC Holdings Plc, Goldman Sachs Group Inc. and other global banks are cosying up to Qatar’s finance ministry and sovereign wealth fund.

The report states that while the kingdom remains key for business, bankers regret diverting their attention from Doha, especially after being blindsided when the Saudis delayed the sale of a stake in oil giant Aramco in July.

Banks are never fond of picking sides, but decreasing tensions in this affair provide an opportunity for executives to explore normalizing their activity, said Ayham Kamel, Eurasia Group’s London-based practice head for Middle East and North Africa. The geopolitical context for the Qatar crisis has changed, and at the very least, the crisis will not move in an escalatory direction.

Finance Minister Ali Shareef Al Emadi is a key player in the banking sector’s goal of repairing relations with Qatar. Emadi sits on the boards of the country’s biggest bank, national airline and sovereign wealth fund and is fundamental in repairing damaged relations with the nation.

The repair efforts started in December, when more than a dozen managing directors from global banks descended on Doha for the Euromoney conference where Emadi was speaking. Almost none of those attended the conference the previous year.

In 2017, banks were warned that doing business with Qatar would lead to consequences, but now the tide has changed. Not only has Crown Prince Mohammad Bin Salman’s aggressive foreign policies caused unrest, but his personal involvement in the kidnapping and detention of leading business figures in his own country, and the barbaric murder of Jamal Khashoggi have all led to fears over the kingdom’s future.

MBS has changed the rules of the game in terms of Saudi domestic and economic policy, without much sense of what the new rules are,” said Gregory Gause, a professor of international affairs and a Saudi specialist at Texas A&M University. “That is going to discourage investment. His risk-taking on the international scene is similarly going to cause doubts for international investors.

The Saudi-led siege is not only affecting the kingdom, but is also damaging the UAE. A lot of Qatari business started to be done from London or New York instead of Dubai, the Middle East’s financial hub. The region’s financial sector is being damaged right at the heart, and leading business and banking figures fear that unless the blockade is ended, irreparable damage could be done to the Middle East’s finance industry.

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Author

Omar Hajjar is a journalist based in the UK. An investigative reporter, he has lived in 3 different countries in the Middle East over the past 10 years.

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